Tag: systems integration

Accenture Takes Over from CGI to Salvage HealthCare.gov | Sherpas in Blue Shirts

Obamacare’s “My Bad” moment

You could hardly be surprised when news came out earlier this month that the Obama administration was considering replacing the incumbent HealthCare.gov vendor – CGI Group – with Accenture. By now, the rollout of Obamacare’s (or the Affordable Care Act) much-touted flagship health insurance exchange website, HealthCare.gov, has entrenched itself as a case study in how NOT to implement a large-scale IT system.

With costs incurred inching northwards of US$400 million (at last count) and multi-faceted complications resulting from the ambitious launch across 36 states, the harsh media and public spotlight has laid bare various problems beset the program. Despite having an array of veritable IT service partners (including the likes of Booz Allen Hamilton, CGI Group, and, later on, UnitedHealth Group), the website was plagued by frequent crashes, error messages, delays, and other glitches, frustrating consumers who looked to sign up for a health insurance policy.

Live and learn

Now that the initial hyperventilation and brouhaha over the episode has settled, it is time to evaluate the lessons for service providers and buyers alike. As is the case for any major IT engagement, one can never hold a single stakeholder to take the fall when things go south. Here, there were a wide range of missteps, including disagreements over project leadership, lack of communication between vendors and administration, inadequate testing, underestimation of web traffic, divergence of political ambitions regarding IT imperatives, murky ownership, and an absence of a clear problem-mitigation strategy, which in totality led to the mess the administration finds itself.

As one would expect in a scenario like this, there is no one-size-fits-all strategy. However, to distill the key learning for a large-scale IT project involving various stakeholders with divergent viewpoints, it is essential to:

  • Establish a clear roadmap by aligning technology imperatives with business needs
  • Include clear performance-linked incentives/penalties in SLAs to ensure compliance
  • Institute qualified management with relevant skills to tackle issues at hand (in this instance, Centers for Medicare and Medicaid Services was responsible for the program despite lacking any technical know-how)
  • Ensure convergence between technology and sales stakeholders to maintain cohesion
  • Embrace incremental milestone approaches including betas and testing, which are necessary to tackle niggling implementation issues before rollout

There is an overarching necessity to identify the operational challenges beforehand in order to mitigate post-implementation complexities. With federal IT spending expected to increase, it is essential that service providers and buyers gear up to inculcate predictive thought leadership as the silver bullet to avoid messy reactive measures.

The road ahead

Accenture would seem like the ideal fit for a project of such magnitude, given its proven expertise in the domain – it led the construction of California’s state health insurance exchange, which received positive feedback from stakeholders. Also, this type of a large-scale systems integration engagement is right up its alley, and plays to its strengths. This is reflected in Accenture‘s positioning as a leader across Everest Group’s PEAK matrix for healthcare and life sciences ITO. That said, the company will be under increased scrutiny and immense pressure to deliver given the attention the project has garnered.

Healthcare Life Sciences ITO PEAK Matrix

For more perspective on ITO trends, buyer imperatives, and market opportunities in each of the payer, provider, and life sciences market segments, read Everest Group’s complimentary report on State of the Healthcare & Life Sciences ITO Market: 2014. The report also looks at how the Healthcare and Life Sciences ITO opportunity will pan out in 2014, and provides projections on its growth and market size going into 2020.

Accenture Takes Over for CGI | Sherpas in Blue Shirts

We just witnessed one of the most spectacular examples of where choosing a service provider based on the lowest price can be a really bad idea. The Obama administration’s recent about-face in contracting with Accenture to take over for the incumbent CGI on the beleaguered healthcare.gov website is a vivid reminder that low price doesn’t necessarily end up being low cost.

Accenture is the premier firm in large-scale systems integration. So we have to wonder: Does the Administration wish they had picked Accenture to begin with?

One has to feel sorry for CGI, for the healthcare.gov build and launch is notorious for the government’s role in poorly scoping and poorly managing the project. So it’s likely that any firm might well have come to grief. Still, this is really just a simple story of penny-wise and pound-foolish decision making.

Government procurement decisions tend to settle on past experience and low price. Accenture is the most-respected provider for complex, large-scale SI projects; but as anyone that has bought services from Accenture knows, its expertise comes at a premium. Yet when a project absolutely has to succeed, the price is worth a premium.

Lesson learned and buyers beware!

If you select a service provider based on price and terms/conditions, you may walk right past the company that would be your strongest partner in delivering the results you want. Perhaps even the government now realizes the hazards of low-cost bidding. When it really matters, buy the best.

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