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IT Cost Transparency with Capacity Optimization

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Learn how Health Care Service Corporation's investment in TrueSight Capacity Optimization empowered their IT organization with better cost transparency. www.bmc.co/TrueSight

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IT Cost Transparency with Capacity Optimization

  1. 1. © Copyright 12/18/2014 BMC Software, Inc1 Capacity Management and Cost Transparency at HCSC Why the investment?
  2. 2. © Copyright 12/18/2014 BMC Software, Inc2 Rick Kickert, IT Planning Senior Manager HCSC – Health Care Service Corporation Cost Transparency with BMC TrueSight Capacity Optimization
  3. 3. © Copyright 12/18/2014 BMC Software, Inc3 Agenda 1. Introducing HCSC A few data points 2. Capacity Management and Cost Transparency at HCSC Why the investment 3. TrueSight Capacity Optimization at HCSC Lesson learned and Best Practices 4. Q&A
  4. 4. © Copyright 12/18/2014 BMC Software, Inc4 Introducing HCSC A few data points
  5. 5. • Founded in 1936 and with more than 14.5 million members, HCSC is the largest customer- owned health insurer in the United States and fourth largest overall, operating through its Blue Cross and Blue Shield® Plans in Illinois, Montana, New Mexico, Oklahoma and Texas • We provide health coverage through our Blue Cross and Blue Shield Plans and dental, life and disability insurance through Dearborn National • We are greater than our 21,000+ employees, 60 local offices and state-of-the-art technology, including two Tier IV data centers — the industry's highest reliability level — that provide the speed and data security to meet our customers' current and future business needs Health Care Service Corporation
  6. 6. AFFORDABLE CARE ACT IS SIGNED ENROLLMENT BEGINS FOR HEALTHCARE MORE AFFORDABLE! THE INSURANCE INDUSTRY CHANGED…..WHY? 03/23/2010 11/15/2013 TODAY The Insurance Industry Changed... Why? https://www.youtube.com/watch?v=sx2scvIFGjE
  7. 7. © Copyright 12/18/2014 BMC Software, Inc7 Our vision Drive competitive advantage via efficiencies and cost- effectiveness through IT optimization, simplification, and agile infrastructure & applications “Provide the lowest cost, most accessible healthcare”
  8. 8. © Copyright 12/18/2014 BMC Software, Inc8 Planned Enrollment – Scenario Example 0 100 200 300 400 500 Historical Insurance Industry Ad Campaign for change… 0 100 200 300 400 500 Historical Projected 0 100 200 300 400 500 Projected Actual
  9. 9. © Copyright 12/18/2014 BMC Software, Inc9 Planned Enrollment – Scenario Example 0 100 200 300 400 500 Projected Actual Healthcare.gov website delayed Constant Re-Planning to adjust for Capacity needs Constant Re-Planning to adjust for Capacity needs Constant Re-Planning to adjust for Capacity needs Constant Re-Planning to adjust for Capacity needs Constant Re-Planning to adjust for Capacity needs Constant Re-Planning to adjust for Capacity needs Constant Re-Planning to adjust for Capacity needs Constant Re-Planning to adjust for Capacity needs Constant Re-Planning to adjust for Capacity needs Constant Re-Planning to adjust for Capacity needs
  10. 10. © Copyright 12/18/2014 BMC Software, Inc10 Execution Focused Outcome Focused Maturity Monitoring Component View Business Optimizing Service view Performance Optimizing Workload view Process Optimizing Business process viewFire Fighting *** Outcome Focused Goals for Capacity Management at HCSC 1. Minimize our risk to production caused by capacity related outages and plan for growth 2. Reduce resource time used to manually collect and correlate data 3. Ensure models are aligned to business expectations and give IT runway to implement changes 4. Minimize future hardware spend by maximizing the utilization of our current investments
  11. 11. © Copyright 12/18/2014 BMC Software, Inc11 DataIntegration Reporting Modeling Planning A phased approach to increase maturity and scope Component Service Business Maturity Scope Claims, Calls, Benefits, etc... Applications (eIVR, Portal, etc.) MQ, Appliance, Middleware HW, Network, Mainframe Facility Datacenter Efficiency  Starting point is always physical HW usage measurement  Two streams to increase maturity and scope:  Upwards (“classic”): accordingly to ITIL  Downwards (Green IT): to facilities and power consumption The all-around Capacity solution 4 Step Approach Starting Point
  12. 12. © Copyright 12/18/2014 BMC Software, Inc12 Phase 1: set foundation for Capacity Management 1) Collected the data about Infrastructure 2) Needed to understand the workloads 3) Align Services with the components and workloads 4) Ready for Scenario Planning!!!
  13. 13. © Copyright 12/18/2014 BMC Software, Inc13 Phase 2: define Cost Models Vision Drive competitive advantage via efficiencies and cost-effectiveness through IT optimization, simplification, and agile infrastructure & applications. “Provide the lowest cost, most accessible healthcare”
  14. 14. © Copyright 12/18/2014 BMC Software, Inc14 Phase 3: deliver Cost Visibility Reports that provide value to different roles: • Project Managers can track near real-time costs • Financial planning can use a report to track to budget • Corporate finance can use reports to ‘shift funds’ and allocate resources
  15. 15. © Copyright 12/18/2014 BMC Software, Inc15 3 5 4 90 160 Infrastrucute Business Drivers Applications 100x Increase 72x Increase 40x Increase Few metrics about achieved results 3300 Improved Cost Visibility
  16. 16. © Copyright 12/18/2014 BMC Software, Inc16 Lesson Learned • Must develop ‘Buy In’ on IT Costs • Establish Financial Accuracy • Reporting / Cost of Service / Cost Transparency • Demonstrate Opportunities & ROI
  17. 17. © Copyright 12/18/2014 BMC Software, Inc17 TrueSight Capacity Optimization at HCSC Lesson learned and Best Practices
  18. 18. © Copyright 12/18/2014 BMC Software, Inc18 Lesson Learned – before you start • Cost Transparency is key and benefits are huge - make sure the business case is well defined and understood by stakeholders and results will became actionable information • Since Cost Transparency may provide several challenges - it is not just about implementing a solution – it is about company processes and roles Before you start:
  19. 19. © Copyright 12/18/2014 BMC Software, Inc19 Lesson Learned – start with the end in mind • Define your cost models before you decide what and how to integrate • Make sure you can automatically maintain the mapping between the chargable items (servers/devices) and the chargeback targets (tenants/departments) • Create your internal “how-to” documentation – again it is not just about knowing the product Start with the end in mind
  20. 20. © Copyright 12/18/2014 BMC Software, Inc20 Lesson Learned – it requires an iterative process • Keep cost models simple initially – fairness is key more than “truth” – and then make them more complex in case – this should not be a super-detailed accounting effort • Get feedback from delivered results and observe changes in behavior – are consumption profiles changes by the cost visibility? An iterative approach
  21. 21. © Copyright 12/18/2014 BMC Software, Inc21 Lesson Learned – product best practices • Structure the domain hierarchy to reflect your service/tenant hierarchy – this will help you when defining the chargeback hierarchy • Standardize metrics to make them ‘universal’ for all platforms – this will simplify the cost model definition • Define your approach to cost models as soon as possible: fixed, allocation or utilization based – or a combination Best Practices for a solid foundation
  22. 22. © Copyright 12/18/2014 BMC Software, Inc22 Lesson Learned – Cost Transparency is disruptive • Cost transparency is disruptive – it may cause changes, and cascading change effect (“trophic cascade”) http://youtu.be/ysa5OBhXz-Q
  23. 23. Thank You. Rick_kickert@bcbsil.com http://www.linkedin.com/in/rickkickert/
  24. 24. © Copyright 12/18/2014 BMC Software, Inc24 MONITORINGTOOLS Performance Insight Network Servers Databases BMM DynaTrace CA Wily NMONCMM BMC Atrium CMDB Quest Performance Analysis SQL DB2 Oracle V Center NetQoS Tivoli Productivity Center (TPC) Cisco Prime BMC TrueSight CAPACITY OPTIMIZATION BUSINESSDRIVERS Edgesite VDI Counts Sentinel 83X Transactions eIVR Service Calls (IBI,ICI, IMI,IPI) CVP Call Voice Platform Cacti VPN counts Web Trends Public Site Hits / Visits RSC Hits / Visits RSC Business Drivers BAM RSC / Portal Producer Portal Hits / Visits eIVR – Ingress Gateway Member Liability Estimation NetQos Application Bandwidth Wily Active Counts / Busy Workers: Public Site, Legacy, RSC Real Time Adjudication Counts Personnel Counts NPI Crosswalk Service Call Counts Webex Ports Utilization RTIS Mainframe Transactions Real Time Benefits Transactions Aceyus CVP counts NetQoS Internet Circuit Utilization Edgesite AP WEB Counts Cisco Prime Wifi Network ODS DMIH Online Sales Channel What data we collect
  25. 25. © Copyright 12/18/2014 BMC Software, Inc25 Reactive (Fire Fighting) Ad Hoc, Requests (calls, emails), No Predictive Analysis, Data Gaps, No Business Data, No View of Costs Data Management (Monitoring) Component View, Spreadsheets, Review Data as Needed, Siloed Performance Management (Optimizing) Workload View, Data Integration, Predict Performance Issues, Trending, Standardized Toolsets across Technologies, Understand Bottlenecks Business Optimizing (Service View) Data Intelligence, Service Views, Scenario based Capacity Planning, Influence usage via Cost Transparency , Service Costing Process Optimizing Business Process View, Report in Business Terms, Measure Efficiency, Cost Benefit Analysis, Capacity Management - Maturity Levels
  26. 26. © Copyright 12/18/2014 BMC Software, Inc26 Understand Your Costs Mainframe Linux / AIX / Unix Wintel Storage Network Mip Memory Memory GB / TB Ports Understand your Consumption (Monitoring / CMDB / Bill of Materials) Software Costs of Operating System Human Capital Costs of Operating System Project Costs, Application Costs, Service Costs………
  27. 27. © Copyright 12/18/2014 BMC Software, Inc27 Cost Alignment • Network• Mainframe • Storage• Servers CPU Memory Devices Virtual Devices Software Disk Virtual Tape Tape Labor Replication Ports Labor Plant Equipment Power MIPS Software Labor

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