Rolling with the changes

Hospital information systems vendor Healthcare Management Systems Inc. has had the same overriding market strategy since its formation in 1984. "Our proposition from the beginning was an integrated product for the small hospital market," says Thomas Stephenson, president and COO.

That's why about 80% of HMS' sales include its complete line of clinical, financial/administrative and ancillary information systems. And the strategy has been successful enough to enable the privately held Nashville, Tenn.-based company to be profitable nearly from the beginning, although there have been some years where it broke even, Stephenson says. In 2006, profit rose 29% as revenue increased 15%, he says. The company has more than 500 hospital clients across the nation, most with less than 200 beds.

But market forces compel changes in corporate strategy. In recent years, HMS' customers have been looking for more functionality in clinical systems. The company and its rivals-primarily ...