An Outsourcing Partnership That Had to Deliver — STAT

2013 Outsourcing Excellence Award Winners: Daughters of Charity Health System and Dell2013 Outsourcing Excellence Award BEST TRANSITION: Daughters of Charity Health Systems and Dell.

“We had six months to recreate what we needed to operate our healthcare facilities. For us, the transition really was a critical situation.”

Richard Hutsell, Vice President and CIO, Daughters of Charity Health Systems

 A typical IT transition is stressful enough. But, what if lives were on the line? Such was the case with Daughters of Charity Health System (DCHS) in 2002—an organization that needed a transition delivered with surgical precision —spawning a client-provider partnership that, like patient-doctor relationships, is built on a foundation of communication and trust.

If you’re not familiar, Daughters of Charity Health System is a California-based regional healthcare organization, committed to serving the sick and those living in poverty from San Francisco to L.A.   Back in 1995, DCHS leaders decided to merge with Catholic Healthcare West (now Dignity Health), a larger, Catholic health system. Then in 2002, DCHS determined that the two entities were moving in different directions. To uphold its mission of providing healthcare to the poor, DCHS made the decision to operate independently once again.

To put it mildly, breaking up was hard to do.

“Over the course of six years, we had co-mingled healthcare assets, including data, software, hardware and applications. We even operated out of a single database,” explained Richard Hutsell, vice president and CIO of DCHS. “So, one of the biggest challenges we faced was determining where all of the instances were, who had the rights to the software and how to separate things out.”

To compound the problem, DCHS staff wasn’t given much time to get things done. They could start the separation process in January of 2002 and had to be completely migrated to a new, fully functional IT environment by July of that same year.

“We had six months to recreate what we needed to operate our healthcare facilities. For us, the transition really was a critical situation, “Hutsell said. “We weren’t even allowed to talk to anyone in the current IT department before January, so it was impossible to get much of a head start on what was a monumental, critical project.”

A Transition Requiring Surgical Precision

The prior year, Catholic Healthcare West had contracted with Perot Systems (now Dell) for outsourced IT, rebadging most but not all of its internal IT staff.

“We had a lot of highly customized legacy systems, run by staff with local knowledge,” Hutsell said. “So, we either had to try to hire away the talent and staff up internally, or turn to outsourcing ourselves, ideally with someone who already knew our applications and how we operate.”

After looking at numerous options through a formal RFP process in conjunction with an industry consultant, Hutsell and team decided to go with Perot Systems (now Dell).

“We knew the ultimate goal of Catholic Healthcare West’s original outsourcing agreement was to consolidate IT resources,  so many members of the existing IT support team were nervous about their future. So, by going with Perot, we had the opportunity to pick the best team to work for us,” Hutsell said.

According to Hutsell, open communication from day one was key to get the team working together.

“We made it abundantly clear that our goal was not to reduce headcount but to build a brand new health system that supported our mission of providing care to people living in poverty. That mission really resonated with the Perot staff and executives. It was something they all wanted to be a part of,” he said. “They could see that we were focused on more than just the bottom line.”

Instead of vendor and client, Hutsell made sure that everyone worked as one, cohesive team.

“We worked together to create a community. Instead of a bureaucracy, we created an environment of mutual trust. If there was a problem, we talked it out, instead of pulling out a contract,” he said. “You can’t beat down a vendor and then expect a partnership.”

The Perot Systems’ (now Dell) team responded in kind. Approximately 26,000 man hours later, the team, in conjunction with DCHS associates, successfully separated or recreated some 300 applications and transitioned the organization to its own IT environment.

“Everything was done on time, with very few issues,” Hutsell said. “We were one, synchronized unit focused completely on the end game. It was clear from the beginning that no one was going to let this project fail.”

A Relationship That’s Stood the Test of Time

Seven years later, the relationship was still going strong, with 112 Perot Systems FTEs supporting 4,500 desktops, 350 physical and 800 virtual servers, 5,200 mailboxes, 520 interfaces and 200 applications.

Then came the phone call.

“The CEO of Perot Systems called to tell me that the company had been bought by Dell,” Hutsell said. “My first reaction was ‘Dell is about equipment—what could they possibly know about services?’ I was worried that, all of a sudden, our team would have hardware quotas and that the whole dynamics would change. ”

All of those fears proved to be unfounded.

“The truth is, the relationship is just as strong today. Nothing has changed; we still have the same commitment and partnership. Performance goals continue to be exceeded every year,” Hutsell said. “In fact, in the past ten years, we’ve only had two account executives—and both have been outstanding. It’s been a good, consistent experience—both for us and for Dell.”

An Ongoing Commitment That Extends Beyond the Basics

As the relationship progressed, DCHS leaders have stayed true to their commitment to the Dell IT team in a very real way.

“We try to provide growth paths for our Dell people, so we invest in their ongoing training,” Hutsell said. “For example, we were interested in exploring virtualization, so we paid for a half-dozen of our Dell team to go and learn virtualization. As a result, we’ve been able to implement virtualization early in its development cycle, lowering our costs, while creating career paths for members of our Dell team.”

This example is only one of many ways DCHS and Dell operate as a single entity, not as vendor and customer.

“From the beginning, we’ve worked to erase the ‘outsider’ label typically given to non-employees. For us, there is no separation. Our Dell team is included in all programs and fill certain management roles at our hospitals,” Hutsell said. “As a result, our organization can focus on the mission of providing the highest quality care to the people we serve, without the typical distractions and problems from IT.  And, we get better every year.”

From all indications, it’s a partnership that’s going to be alive and well for a very long time.

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