McKesson and Infor Go-To-Market Partnership – What Happens Now?

A couple weeks ago, McKesson and Infor announced a partnership that will have McKesson EIS (Enterprise Information Solutions) offering Infor Cloudsuite as their cloud-based ERP (Enterprise Resource Planning) solution for human resources, supply chain, and financials. What does each party have to gain from this partnership and what does this mean for existing customers of McKesson ERP solutions?

Infor continues to be the dominant player in the ERP space for healthcare providers. Its healthcare applications, previously known as Lawson (and probably always known as Lawson to many of us), have the largest market share with the majority of larger hospitals and healthcare systems. Its closest competitor in the past, Peoplesoft, is now owned by Oracle which is focused on developing and promoting its Fusion product and has released the final version of the Peoplesoft product. Workday, the cloud-only solution that is publicly traded and making significant strives in many industries, has won deals in human resources and financials implementations but lacks a supply chain solution, critical to any integrated ERP deployment. SAP, the largest ERP provider in the world, has a strong presence in healthcare manufacturers but does not provide a supply chain solution well suited for the unique needs of healthcare providers, and therefore has a very small market share.

McKesson, once a strong player in this space, has faded over the years in ERP as they have with EHR solutions. The majority of the McKesson ERP customer base, using the products commonly referred to as Pathways, have been long-time legacy customers. Pathways has not been kept up with modern ERP needs, and it has been many years since I have seen a hospital consider Pathways as a potential solution, but rather it is typically the solution being replaced.

Infor has invested significantly in creating a cloud-based solution, referred to as CloudSuite. However, the existing healthcare customer base typically has an on-premise installation and therefore cloud adoption has been focused on new customers as well as those that are specifically looking to transition away from on-premise. McKesson has not had a cloud offering, therefore it would make sense for them to partner with someone to offer it as an alternative to Pathways.

Infor will gain access to the Mckesson customer base, many of whom are likely considering leaving Pathways for other solutions anyway. In addition, Infor will be able to provide Mckesson’s Strategic Sourcing solution for their customers.

However, it is unclear what that means for Pathways. While McKesson press releases state that CloudSuite is an alternative to Pathways, one has to wonder why Infor would want to expose their solution to someone who is actively selling a competitive solution, and why McKesson would continue to invest in Pathways when it has access to a much more mature and robust solution as a go-forward path for its Pathways customers.

Therefore while it is likely that McKesson will keep Pathways supported and up-to-date with regulatory improvements for the time being, it seems very unlikely that they would continue to enhance it – and inevitable that it will eventually be sunset in favor of transitioning those customers to Infor Cloudsuite. If history is indeed an appropriate predictor of the future, consider that McKesson announced its BetterHealth 2020 plan – in which they announced a focus on Paragon as their EHR but continued support of the older Horizon EHR product. Shortly after that they went back on that commitment and announced they would sunset Horizon in 2018.

Meaningful Use has led to a focus of resources on Electronic Health Records implementations which have led many customers to hold onto their older ERP solutions past their useful life. I suspect that the next two years will see a re-focus to ERP solutions with customers with more modern solutions focusing on upgrades and new feature deployment while customers with older solutions making a change.

Those customers who stayed on Horizon for too long are currently in a rush to implement replacements before the March 2018 sunset date.Customers on Pathways products should likely start the conversation now about their long-term ERP plans and consider if they want to get ahead of any sunset announcement.

If you’d like to receive future posts by Brian in your inbox, you can subscribe to future Healthcare Optimization Scene posts here. Be sure to also read the archive of previous Healthcare Optimization Scene posts.

About the author

Brian G. Rosenberg

Brian G. Rosenberg

For the past twenty years, I have been working with healthcare organizations to implement technologies and improve business processes. During that time, I have had the opportunity to lead major transformation initiatives including implementation of EHR and ERP systems as well as design and build of shared service centers. I have worked with many of the largest healthcare providers in the United States as well as many academic and children's hospitals. In this blog, I will be discussing my experiences and ideas and encourage everyone to share your own as well in the comments.


  • Brian- Thanks, interesting observation and research. While Lawson may have a great share of the healthcare supply chain market, its still an old ERP system! Ambitious, forward thinking health systems and IDN’s are looking beyond these point, monolithic solutions and are embracing cloud and predictive analytics in a big way. Data, both structured and unstructured is still a big problem for most large organizations and inhibits transformation. In our opinion, these large ERP systems don’t support the nimbleness and prediction that is required for transformation. My thoughts on these ERP’s

Click here to post a comment