Case Study: Achieving IT Transformation for a Leading North American Healthcare System

Executive Summary

With aggressive growth plans and rapidly aging facilities, a multi-billion dollar healthcare system recognized it needed to develop a better, more efficient delivery model for its IT services. The current IT organization dedicated too much time to simple run-and-maintain activities to meet ever-growing business unit demands, and was unable to support an environment in which it could address the looming HITECH Act’s meaningful use requirements. With Everest Group’s assistance, this organization assessed multiple service delivery options, (e.g., shared services, outsourcing, consolidation). The resulting customized solution reduced IT’s ongoing operating expenditures by 35 percent, provided a stable, high-performing platform for new clinical information solutions, and avoided the traditional capital expenditures “hump” associated with these types of transformations.

The Client’s Challenge

Improving the IT services delivery model involved several significant challenges for the healthcare provider including:

• Creating a scalable and flexible IT service delivery model with a cost basis that would adjust as business grew and contracted over time
• Addressing an aging IT infrastructure struggling to meet up-time requirements
• Providing a stable IT environment for its newly acquired enterprise-wide clinical information system
• Overcoming significant ongoing operational expenditures driven by multiple third-party contracts and a group of heavily tenured IT professionals
• Coping with strict bond covenants limiting capital investment expenditures

Insight to Action

With its deep understanding of both the technical requirements and delivery economics of a healthcare provider’s IT environment, Everest Group designed a new IT services delivery model to meet the organization’s desired outcomes and timeframe.

Joint client and Everest Group teams prioritized IT needs, identified the delivery requirements, assessed solutions, and crafted an implementation plan to complement the overall systems transformational roadmap. Part of the solution required the evaluation and design of outsourced infrastructure services, such as those dealing with the data center, mainframes, midrange servers, network, and desktop and handheld equipment.

Everest Group collaborated with the broader organization to identify operational needs, develop the RFP, pinpoint relevant providers, assess solutions, model the operational and financial business cases, and negotiate the final outsourcing contract for in-scope components. Everest Group also aided in redesigning retained services, with a focus on broader governance, demand management, and applications rationalization. This solution set included a redesign of the process, organization, and policies.

Impact

Everest Group’s solution resulted in a significant reduction in both capital and operational expenditures for the healthcare system organization. This was enabled by Everest Group’s research and guidance, which demonstrated to the company the true cost/benefit considerations associated with HITECH Act compliance. The company continues to benefit from a hybrid sourcing and shared services solution, optimized for cost while at the same time retaining in-house expertise. It is an IT environment that not only works optimally today, but is also designed to support the demands of the company’s anticipated ongoing acquisitions and divestitures.