Sy.Med Development, Inc Harvard Case Solution & Analysis

1.0.            Introduction

Sy. Med Development Inc. (SMD) was initially incorporated in 1995 as Medilink Inc. with an aim for “Simplifying Managed Care”. The name was changed in the subsequent year after the investment by State Volunteer (Medical) Insurance Company (SVMIC). In 1998, one of the software clients of SVMIC; FPIC Insurance Group Inc. was acquired Sy. Med and subsequently it realigned itself to focus on licensing and development of software in 1999.It has revolutionized the market with software products like One App, which assists the users in managing care credentials.

Recently, it has been facing some problems, particularly regarding variance in actual and forecasted sales. This report will focus on analyzing the situation of Sy. Med and providing it with some recommendations to overcome these issues.

2.0.            Critical Issues

Some of critical issues identified from the case study are as under:

• Significant variance in actual and forecasts regarding new systems, sales and costs.
• None of the unit of One App MCO was sold
• Limited Staff

3.0 Situation Analysis

The major issue faced by SMD is regarding financial performance in the first two months of 2001. It has seen a high variance in financial results during this period.

• A negative variance of 6 units (66% less than forecast) in new sales
• Sales variance of $74,697 (with 76% variance)
• Operating loss of $43,104 in February 2001 with a cumulative variance of $76,999. Higher costs in most of the head of accounts including operating costs, amortization and marketing due to increase in sales reps

Secondly, it has not been able to sell even a single unit of OneApp MCO until now with limited team of eight. The root problem is the limited number of team members in the company, which makes it difficult for the company to market the products efficiently.

3.1.            External Environment (Part A)

3.1.1.      Market Analysis

The market is relatively new therefore, the competition is not intense and the current market players have different market strategies. Some of the similar products in the market are IntelliCred and IntelliApp (by IntelliSoft), Medsite, PRIVplus, Visual CACTUS and Vistar system. The major competing products according to SMD are Visual Cactus and Vistar, however their target market is different as compared to SMD.

The credentialing service bureaus can be considered as the major substitute providers for the similar service. The service bureaus are third party organizations managing credentials and data on behalf of the providers (physicians).

There were around 690,000 registered physicians with practicing license in the United States as per the Medical Group Management Association. Ten applications are required to be submitted by each physician. The number of physicians may increase each year with new graduates, migrants from other regions and licensed physicians.

1.1.1.      Competitor Assessment

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