Roger L. "Vern" Davenport arrived at the Raleigh health-care software company a month ago with a mandate from its London parent company to shape up the business.

Davenport's strategy focuses on increasing Misys' business with doctors' offices, a sharp contrast to the former CEO's ambitions of competing aggressively for hospital customers. His plans include shuffling employees into new divisions and strengthening Misys' products.

A focus on physicians could mean more jobs at Misys' Raleigh headquarters, the birthplace and center of operations for its software for doctors' offices. The company has about 800 workers in the Triangle and 1,900 more around the globe.

The new direction comes after a year of tumult for the company and its employees. After a rapid expansion, Misys recently has faced intense competition and falling sales of its products, which help customers create electronic medical records, bill insurers and manage hospital laboratories. A proposed management buyout fizzled in the fall, a few employees were laid off and the company has had shake-ups in Raleigh and London.

In January, Misys Healthcare CEO Tom Skelton announced his resignation on the same day that the new chief executive of the parent company, Misys PLC, called the health-care division's financial performance "unacceptable."

Davenport's plan to improve the division's finances doesn't include job cuts, he said. But even if he succeeds in adding business, Davenport doesn't envision expanding as quickly in Raleigh as Skelton did. In January 2006, Misys leased 60,000 square feet in a building under construction next door. Skelton planned to hire as many as 300 more employees over several years.

Misys doesn't need the building right now -- and Davenport is not sure when it will -- so he is looking to sublet the space until the company is ready, he said.

But one analyst questions how much of a growth opportunity Misys' new strategy holds.

The company's focus on doctors' practices gives up a high-growth market in hospitals in favor of a "pretty dull" one where it's already a dominant player, said Kevin Ashton, director of equity research at London's Bridgewell Securities.

Ashton said he was surprised to hear at a recent presentation that the hospital business "has essentially been put on ice." He said the parent company's CEO suggested that he would consider selling the hospital business if he received a good offer.

Misys Healthcare lacks a comprehensive product for hospitals, and with a great deal of investment needed throughout Misys PLC, the management might have decided not to devote the resources necessary to develop one, Ashton said. "They've obviously taken the view that ... they can't fight the war on every single front," he said.

Dominating the market

But Davenport says his company's greatest asset is its dominance in the physician market. It holds a 20 percent share of the market.

Davenport said he wants to focus on practices with nine or fewer doctors, a market that is just starting to buy electronic medical-records software.

He plans improvements of Misys' software, including new features and easier-to-use interfaces. The company will promote the connections between its products for doctors' offices, home-health agencies and hospitals, and it will integrate the programs that doctors' offices use so they will work better together.

Misys also plans to better market and expand the services it offers, such as training customers and helping them work more efficiently, Davenport said.

The strategy reorganizes Misys' employees by market -- hospital, physician practices and home care -- rather than by product.

Davenport's credibility and quick action will be important for retaining and motivating employees battered by nine months of uncertainty, said Stefan Slowinski, a software analyst at Societe Generale in London.

Slowinski thinks Misys' strategy makes sense. Taking on large companies such as GE Healthcare, McKesson and Siemens Medical Solutions in the hospital business is riskier than working to gain market share in a business where Misys already has a competitive advantage, he said.

Web-based software, products that help doctors file claims with insurance companies and better integration with hospital technology systems are all opportunities for Misys to control more of physicians' budgets, he said.

Areas for improvement

Misys' business doesn't need rebuilding, Slowinski said, just refreshing.

"It does need to be repositioned and things need to be re-emphasized and products need to be improved and sales strategies need to be improved, but I don't think there's a major necessity to do anything really significant," he said.

Misys' business hasn't been as competitive as it should have been, Davenport said. But he added that he has found a profitable operation, a strong market presence and employees anxious for change.

Davenport is sharing the company's new direction, not only with workers, but with Misys' customers, something the company hasn't done well in the past, he said.

"One of the things we're changing is to let our customers know where we are and aren't going, because they've got a strategy as well," he said.