Virtual Trade Mission: Exploring Opportunities in India May 7, 2009

1. HCA IT Sourcing
Strategy
NTC Virtual Trade Mission
May 7, 2008
Mary Silva Doctor
Former VP, IT&S Strategy & Planning
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© HCA, 2009

2. HCA IT&S Sourcing
Case Study
• Overview of HCA IT&S
• IT&S Sourcing History
• Current Sourcing Strategy –
Flexible Sourcing
• Critical Success Factors
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3. HCA IT&S By the Numbers
Hospitals Supported
Employees – Corporate & Field 3,021
Regional Data Centers 4
HCA
Storage 736 terabytes
CHS
Servers 1,160
LifePoint
MEDITECH servers 146 Capella
HCA, 167
Software applications 305 Total: 308
Enterprise-wide email boxes 98,162
Internet email received 37M/month
Other Facilities Supported
Active projects 195
Projects in Portfolio (incl. on hold) 271 Physician
Practices
IT Service Centers 14
Ambulatory
Clinical interfaces to build 25 Surgery Ctrs
Imaging Ctrs
Clinical interfaces to install 461
Other
Outpatient
Ranked 162 on Information Week’s Top 500 Total: 602
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4. HCA Background: Systems Context
Accounts Payable
Financial & Admin Systems
Human Resources Billing & A/R
(Lawson)
Materials
Management
General Ledger
Payroll
Warehouse Management
(Lawson)
(Infor)
Radiology
MEDITECH
Physician Portal (PatientKeeper)
Clinical Systems
• HPF
• GE QS
Critical Care
• RAD PACS
• GE MUSE
Laboratory
• CV PACS
• GE ImageCast RIS
• AGFA HeartSuite • T-Systems
•Perinatal – GE • Empiric
Pharmacy
•Perinatal – Phillips •Neodata
Physician Practice
• GIM Pulmonary • Oncology
(eCW)
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5. For the hospital segment, IT spend is predicted
to be about 4.4% of overall revenue
Source: Values are based on Everest research and multiple industry surveys and
reports
Note: Survey taken in Q1 of 2008 of 1700 respondents. 10% of respondents
were in the healthcare industry, 46% of those were from hospitals
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6. HCA IT&S is also a Sourcing Provider
Background
Historically, IT&S has provided IT services to
non-HCA businesses. The strategy has been
effective in offsetting costs through two
streams of revenue - software as a service
and professional services.
Customers
• Community Health (former Triad)
• LifePoint
• Capella
• Signature
• Additional non-affiliated/divested
facilities
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7. IT Outsourcers’ Market Share by Hospitals
Number of Outsourced North
American Organizations
HCA
Perot Systems
Competition in IT
outsourcing in hospitals
is also dominated by
Perot Systems which
operates in 160 of 300
outsourced hospitals.
Number of Outsourced North American Hospitals
Source: KLAS “Extensive Outsourcing Study”, September 2008
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8. Strategic Sourcing
• Positioning to better meet
and manage the delivery of
IT products and services in
the context of increased
demand.
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9. IT&S Sourcing Past and Future
2010
Today Next Wave:
Staff Retooling
Applications
Development –
New Project (4
Infrastructure Preferred
Management Providers)
Analysis
Staff
Augmentation
(3 Preferred
Vendors)
Legacy
Application
Outsourcing
2000
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10. HCA IT&S Current Sourcing Strategy
• Need to respond to the challenge of
providing new capabilities while
tightly managing costs
• More focused, contingent approach
• Look at specific functions/skills in
IT&S versus broad functions
• Objectives may vary – cost,
scarce skills, technology transfer,
time to market
• Frequent benchmark/comparison
• Maintain flexibility
• Balance demand and supply
• Gain access to broader
R&D/innovation in IT
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11. IT Project Staffing Challenge (2008)
Capacity
Strategies
~1,200k
hrs.
Strategic Partner
Sourcing
TBD
Incremental Staffing
TBD
Embedded Base
Management (40-40-20)
~100 - 200k
Full Staffing
800k
hrs.
Time to Effectiveness
Leverage Existing Staff Introduce New Staff
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12. IT&S Sourcing Decision Framework
What Kind of What Sourcing Options
Work/Project is It? do We Have?
Work/Proj
ect
Sourcing
Decision
• Capacity • In-source
• Strategic Importance • Staff Augmentation
• Risk • Co-source*
• Scarce/New Skills/Technology • Managed Service/ Outsourced*
• Commodity
• Time to Market
• Cost * May be on- or off-shore
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13. IT&S AD Sourcing Partners
Staffing / Delivery Suppliers & Role Capabilities
Project Business Application Data
Developers DBAs
Managers Analysts Architects Modelers
     
HCA / IT&S

    
IBM
 
   
Wipro
   
 
Syntel
 Full Capability
 Unproven or Limited by Capability or Location
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14. Critical Success Factors
• External advice/support/validation
• Partnership perspective
• Dedicated resources
• Solid portfolio and resource
management process and
information
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15. Summary
• Flexible, Strategic Sourcing
Seeks to Leverage the
‘Right’ Resources for Given
Work
• Supports Employee
Engagement while
Providing Access to Best
Resources Available
• Supports the inevitable
Cycles in IT Investment
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© HCA, 2009