What sort of investment opportunity does Alcidion [ASX:ALC] present?

There are two types of disruptive technology.

Positive and destructive.

For the hotel industry, AirBnB was destructive.

Uber, and Amazon had a similar impact on the transport and retail sectors.

As a sector, healthcare is not immune to disruption.

Australian company Alcidion [ASX:ALC] falls into the "positive disruption" category.

Alcidion describes itself as a"provider of smart informatics for the safe delivery of care" to the health industry. More on what that means, in a moment.

The last ten years have seen a massive shift from paper records in health care to digital.

On the surface, this sounds great.

But, there are two major issues, and therefore commercial opportunities, due to this growing amount of information.

Much of the information comes in different formats, with software that doesn't communicate with other software programs.

And secondly, just because there is a lot of information, doesn't mean it's good quality information.

In fact, the opposite effect can occur.

Medical staff swamped, not only by increased demand but more test results, more data and the same amount of time to deal with it all, can lead to an increase in errors.

This data growth is the main opportunity Alcidion is targeting, although it's open source approach somewhat addresses the first issue too.

So what does Alcidion do? Meet my Dad Jim.

He is 89 years old and recently passed out, as it was eventually discovered, due to an imbalance in blood pressure medication.

If he'd arrived at a hospital emergency ward, which was using Alcidion technology, it could have presented the emergency physicians and nurses with his prior history at the hospital. It could also provide suggestions on possible injuries, tests that therefor might be appropriate, and then, even book those tests.

On completion of the tests it would send the results directly to the doctors iPhone.

Alcidion operates primarily at an enterprise level and claims to:

• mitigate clinical risk for better outcomes

• reduce costs and improve productivity

• pushes medical intel to the point of care

• and is based around an infomatic style dashboard.

Born out of an Adelaide based, state-focused engineering tech business in 2000, Alcidion now sees itself at the start of a global expansion phase.

Following a hectic 2018 which saw it acquire a number of companies and tech to broaden its offering, it has now integrated all of the value they offered.

Source - Alcidion website.

Alcidion is also cashed up after a November institutional placement of 90m fully paid shares at 18 cps, raising a total of $16.2m.

According to CEO Kate Quirke, this money will go along way to getting the global expansion rolling. I have listed more financials as reported in the Alcidion Quarterly 4C statement, but at this stage, the company had a cash surplus for the period of $136,000.

Given all this, I caught up with Kate Quirke recently to find out what 2020 may hold for Alcidion.

$12.9M revenue already contracted for FY20; 16% increase on Q1 FY19;

• $2.5M of new contracts sold in Q1, adding $1.2M revenue to be recognised in FY20;

• Total sold revenue out to FY25 is $34.0M;

• Strategically important contract signed with Healthscope - first sale to a major private hospital

group of our data and analytics capabilities;

• Cash surplus from operations of $136K for Q1 FY20; representing the third consecutive quarter

of positive net cashflow; and improved cash reserves of $4.4M

This covers everything from patient history to medical imaging.