I don't know this one made the round on our list. - balu raman Oh the drama unfolds. McConnell resigns in protest.
http://www.newsobserver.com/business/story/1005330.html Allscripts, Misys combining It's unclear how many would lose jobs when the medical records companies merge Tim Simmons, Staff Writer Two Triangle companies with about 1,000 employees combined announced a merger Tuesday, despite warnings from John McConnell, the entrepreneur who ran both businesses, that the union is flawed and will lead to significant job cuts. The merger involves Misys Healthcare Systems of Raleigh and Allscripts of Cary. Misys is a British subsidiary that produces software used to keep track of the financial side of doctors' offices. Allscripts, which is based in Chicago, makes software that helps create electronic patient records. Officials from both companies were effusive about the merger, saying it will make the new company -- Allscripts-Misys Healthcare Solutions -- a dominant player in the rapidly growing market for electronic medical records. But McConnell, who made millions by creating the forerunners of both companies, said he resigned his position on Allscripts' board of directors Monday evening because the merger wasn't needed and will inevitably trigger layoffs. "I think both companies are weaker today," said McConnell, who said he thinks Allscripts was already on pace to be a dominant company. "I think it's going to be a big challenge merging the two businesses. And I personally hate to see all the jobs that will be eliminated. The company talks about all the synergy savings. Wall Street calls it synergy. I call them people." Allscripts President Lee Shapiro and officials from Misys said they appreciated McConnell's efforts and insights but disagreed with his conclusion. Shapiro said it's an excellent time for the companies to merge, given growth in the market. "It is no longer a question of if physicians will use these electronic health records but a question of when," Shapiro said. "This merger gives us a customer client base of 150,000 physicians. It changes the game." It isn't clear how many workers might lose their jobs. Based on projected annual savings of at least $20 million, analysts said 200 jobs or more could be eliminated in an industry that spends about two-thirds of its budget on salaries. Shapiro said far more research is needed about duplication between the companies before specifics about the work force are known. The companies duplicate expenses in areas such as marketing, travel, administration and facilities, but he said it was inappropriate to estimate possible job losses on the day the merger was announced. Vern Davenport, general manager of Misys Healthcare Systems, said that some overlap was inevitable in the merger but that ultimately the company would add more jobs than it loses in the short run. "There's a tremendous commitment to both businesses across the Triangle, and you'll see that continue," Davenport said. "And as the company grows, my expectation is that there will absolutely be job growth." *Two companies' roots* Misys, which McConnell founded in 1982 as Medic Computer, struggled financially before it reorganized its operations in the past year. That included the sale of two parts of its business, which left it with no debt while maintaining a database of 110,000 physicians. Many of its customers are part of small practices. It employs about 700 people. Allscripts has grown dramatically the past two years but still has only 40,000 physicians in its database. Many of its customers are from large practices. It employs about 325 people. McConnell joined the Allscripts board in 2006 after he orchestrated the sale of A4 Health Systems to the company. At the time, he was chief executive of A4, having joined the company a year after selling Medic in 1997. What Misys gains from the merger is a growing partner. What Allscripts gains is a list of customers almost three times larger than its current base. As part of the give and take of the merger, Misys will hold a majority of board seats, and Allscripts' management team will remain intact. *'Will drive us forward'* Glen Tullman, CEO of Allscripts, called it "a major cross-selling opportunity that will drive us forward in the years ahead." McConnell said that he hopes the leaders of the two companies are correct and that the merger succeeds. But he said he feels strongly that the merger was unnecessary for Allscripts and potentially painful to employees from both companies. McConnell said that although he expects the company will continue to have a strong presence in the Triangle, he noted that its headquarters will move to Chicago when the merger takes effect in about six months. As a key player in both businesses, he also questioned whether the merged company can expand as rapidly as executives want. "It always looks easier on paper," he said. "But as a public company, you better make it or you're in trouble. I hope they make it." --------------------------------- Never miss a thing. Make Yahoo your homepage. [Non-text portions of this message have been removed]
