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Managing IT as a Business At Integris Health

"IT represents a business within the business" says Avery Cloud, CIO of Integris Health's Information Technology Division. "But in order to function this way, IT has to apply the tools of business to its own operations."

Cloud is an outspoken advocate of transforming IT from a cost center to a value center. He is very clear about IT's critical role in the enterprise and the job of the CIO.

 "The CIO has the keys to the kingdom," he says. "The CIO is responsible for one of the corporation's most valuable assets. The network of computerized applications and systems represents the organization's circulatory system, binding processes together through a constant flow of information. As a CIO, our primary charter is to manage that information, not the machines. In essence, the enterprise is our customer, and the technology solutions we provide are key to the strategic success of the organization."

Cloud practices what he preaches at Integris. The non-profit corporation, founded in 1983, is Oklahoma's largest state-owned health system with 11 hospitals and various rehabilitation centers, physician clinics, mental health facilities, and home health agencies throughout much of the state. With 10,000 employees, Integris is the second largest employer in Oklahoma.

Information and the Competitive Edge

"Healthcare companies, like most of today's enterprise, look to their information management experts to help give them a competitive edge," says Cloud. "About a third of the trillion dollars spent every year on healthcare is allocated to information processing. That's why we view IT as a business - a big business."

Cloud recalls that when he joined Integris several years ago, the IT organization was a development shop. "Running and gunning had been an appropriate mode in that environment for quite some time, but it was time for a change," he says. "The organization has grown so quickly that within IT, quality and customer services were being neglected. We needed more controls, more process and procedures - more bureaucracy in the best sense of the term."

He embarked on a significant restructuring of IT that continues to this day. "I believe that business needs should drive what IT does," Cloud says. "The corporation's organizational structure, strategic goals and operational processes should determine which technologies IT invests in on behalf of the corporation. There is a direct link between corporate strategic decisions and IT. To manage an IT organization with this type of charter, you need the proper tools. And that's why we are implementing Compuware's Changepoint software."

The Integris IT organization evaluated a number of other IT governance and management solutions before settling on Changepoint. According to Cloud, the software matched what he was attempting to accomplish with the restructuring of IT. First, he wanted to transform IT into a business, and needed tools to organize that business. Second, he needed to ensure that all projects reflected corporate strategy. Third, he felt that establishing control over the many projects flowing through his organization - including time and resources consumption - was absolutely essential.

"Changepoint gives us the tools we need to accomplish these objectives," Cloud says. "Every IT project is entered into Changepoint and everyone records the time spent on each of their projects on a weekly basis. In addition, we can also track and control a lot of other variables that impact our performance and bottom line. For example, we now know the amount of time people spend in meetings, in training, or traveling. For example, because Integris is a statewide organization, travel chews up a lot of people's time. Now, by managing our desktops better, we have been able to substantially reduce the time people spend sitting in cars."

Changepoint in the Morning

"When people arrive in the morning, the first thing they do - after getting a cup of coffee - is log on to Changepoint," he continues. "It's the center of their world. They immediately see the projects they are working on, what tasks need doing, and when those tasks are due. Non-project assignments are also recorded along with deadline dates. For my managers and myself, the software has proven to be an excellent management tool to determine if goals and deadlines are being met. The Changepoint software acts as an early warning system that lets us spot and attend to problems before they grow out of proportion."

Cloud says that the Changepoint software's friendly, browser based GUI has smoothed its adoption by IT staff members and other users within Integris. "A few people were cautious at first," Cloud recalls. "They were worried that this was a big brother kind of tool that would always be looking over their shoulder. We didn't force anyone to use the system, but when they saw how effective Changepoint was and how enthusiastically other users adopted the software, their trepidations vanished and they quickly bought in. Everyone who uses the software has found it to be indispensable."

The Integris IT organization is using a full spectrum of Changepoint modules including Engagement and Project Management, Time and Expense Capture, Resource Management, Customer Relationship Management, Individual Performance Management, Billing and Support.

Advanced Billing Algorithm

"We're very proud of our billing algorithm," Cloud says. "Each department gets a basic monthly charge to support their desktop PCs and workstations. We build in an intensity factor - some departments work around the clock, others are on a more routine 9 to 5 basis. We factor that into the algorithm. For requests over and above the desktop fee or for non-budgeted work - for example, if a department wants to put in a T-1 line or deploy a VPN - we estimate the job and then get approval from the department. The final costs - in this case an infrastructure charge - are logged as a pass through items direct to the department. We actually send out invoices. Based on Changepoint reports, the department and top management are able to see the precise hours involved and the value of those hours. It's a pretty elegant solution."

"At present, our chargebacks are handled on an annual basis, but would like to move toward issuing monthly invoices and making internal G/L entries," he says. "This is just one more step in making IT a business within the business."

Cloud said the basic implementation of the Changepoint software went very quickly, but he adds, "I believe in continuous development. This software is functionally very rich and is constantly being upgraded. So, over time, we will continue to add features or subtract features as IT and the company change. We'll never be done - going live with this kind of software is just the beginning. We have an ongoing, continuous plan that stretches out into perpetuity."

ROI and ROV

"At Integris, we tend to look more closely at return on value (ROV), a measure that's harder to quantify," says Cloud. "But ROV can be just as important, and in some cases, more important than ROI. Most of ROV evidence is anecdotal; for example, we know that satisfaction among our internal customers has improved considerably, but I'd be hard pressed to put a number against it. We can calculate with some accuracy the difference between the number of projects that have failed in the past because of the misuse of resources, and the number of projects that fail now. It's substantially fewer."

"We also know that employees are spending fewer hours in meetings and on-the-road," he adds. "I intuitively know there are cost savings, but I'm more interested in building internal customer satisfaction and making sure projects are completed on time and within budget. Our primary aim is to use Changepoint to help our business units meet their strategic goals. It also allows me to tell my management exactly how we used our IT resources to support Integris' corporate strategy. That's the kind of ROV that makes the Changepoint solution essential to our operations."

"Of course, IT governance and management software is just part of the package," Cloud says. "The CIOs charter is far broader. It includes the need to rethink the entire IT model. We have to determine how to automate and streamline all our internal processes in order to allow IT to function effectively as a value added business unit within the overall structure of the corporation".

"CIOs are often like cobblers whose children have no shoes," he says. "Often we don't have the technology tools we need. We have to sell top management on the idea that we must implement automated, sophisticated systems like Changepoint so we can churn out the productivity they want."

"I spend a lot of time being an evangelist, making the most compelling case I can for the importance of IT to the strategic success of the organization" Cloud says. "Tools like Changepoint allow me to show my managers exactly what our contribution has been. It's only through creating a powerful and efficient IT organization that you can meet the needs of the corporation at both the strategic and tactical level."

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