Patient Centricity in Healthcare Outsourcing (Part One of Two)

Bill Huber Blog

Bill Huber, Managing Director – 

It’s no secret that the Healthcare industry is undergoing massive changes, and that these include the solutions that outsourcing service providers are bringing to the market.  Last week I caught up with HCL’s Healthcare head, Gurmeet Chahal to discuss these trends and current areas of focus for HCL.

Bill Huber: HCL has referred to something called “Patient Centricity” in describing its services approach in healthcare. Can you describe what that means in practical terms?

Gurmeet Chalal: As you know, right now, the healthcare industry is undergoing what are perhaps the most dramatic changes of any major sector. HCL looks at healthcare in light of this transformation and sees enormous potential for innovation, with a focal point for that innovation around the patient. We are achieving results by converting technology platforms, capturing and organizing data and providing services that are focused on transforming the insights from the data to outcomes for the patient with the goal of improving the patient’s experience. We believe that this ultimately needs to be done over the lifetime of care for the patient.

Our approach is based on connecting the insights obtained through HCL’s rich experience of working with both payers and providers, along with a heritage of working with the medical device industry, and of course, pharma. Utilizing technology, analytics and services, and leveraging our global scale and partner relationships, we are able to bring clinical insights together. At HCL, our culture is focused on “ideapreneurship”, involving individuals who take accountability on behalf of our customers. Part of this is how we use cross functional teams and have built the “4I” framework which enables us to stitch data into a unified fabric and build an intelligence layer on top through our understanding of business data and analytics. For example, think of a medication adherence strategy. If the patient is adhering to a prescribed medication regime, presumably the patient will benefit through improved health, the payer will benefit through reduced cost of care, the provider will benefit through improved patient outcomes and lower readmissions, and the pharma will benefit through improved market share. The combination of technology, analytics and services makes this possible through enablement of better monitoring, tracking and follow-up with patients and caregivers to improve regime adherence.
In addition to our aforementioned relationships, HCL has its own provider business in India. It comprises the country’s first nationwide networked multi-specialty clinics in affiliation with Johns Hopkins Medicine International. This provides us with our own unique insights that will fuel research that will become increasingly important for providers in the US as the Asian population increases here.

BH: You mentioned your “4I” framework. What is that?

GC: It’s about how you obtain and what you do with the right Information. The four “I”s refer to Intelligence, Interaction, Integration and Insight. So, we have a strong Intelligence layer, comprising patient segmentation, benchmarking, analysis and simulation and the like. Then we have an Interaction layer, which is multi-channel and includes social media, mobile, in person and web. Third, there is an Integration layer which collects and organizes information from multiple sources, including from Pharma, from labs, from providers and so on. For example, through a partner, we have built a platform that enables integration of data from over 160 medical devices in real time. Lastly, there is the Insight layer, which provides actionable care and business recommendations.

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Oracle’s New Sales Strategy: Battleship in a Bathtub?

Battleship in a Bathtub

Jeff Seabloom, Managing Director –

Is Oracle serious about changing its sales culture to a more customer-focused approach? One that helps customers leverage the full suite of Oracle solutions? More specifically, will the software giant abandon what one customer recently described as a strategy of “constant attack” from multiple sales people pitching multiple products?

It’s a tall order. Commission-based revenue chasing is a longstanding problem for Oracle, one that has only gotten worse as the product portfolio has expanded. By its own admission, Oracle has on a regular basis shifted, changed, reorganized and retooled its sales strategy, teams and methods – to the point that the process has become something of an annual rite of spring.

Will things be different this time? Incentives based on a regional and vertical focus can go a long way toward improving the reward structure and reversing the practice of throwing lots of stuff against the wall and seeing what sticks. The Key Accounts Program can also help, but should become a catalyst for the norm, rather than special treatment proffered on a handful of strategic accounts.

On the other hand, the current executive structure and supporting organizations are non-traditional Oracle, and many top sales executives have a background in hardware and, arguably, commodity sales. In the scramble for revenue during the past few years, Oracle has lost many talented professionals who were experts at complex solution-oriented sales and who were true advocates for the company and its vision. The gap left by their departure remains difficult to fill, especially when a culture of commission chasing continues to prevail in many quarters.

Ultimately, while Oracle’s leadership may be well intentioned and committed to driving a more customer-oriented sales strategy, the reality is that this is a very large company with a deeply entrenched culture. Think battleship in a bathtub.

Will RPA Swing the Innovation Pendulum Back to Providers?

Perpetual Motion

Jeff Augustin, Managing Director –

My colleague Mike Slavin recently made some provocative statements to CIO magazine, saying, in effect, that outsourcers were, for a number of reasons, doing a poor job at delivering innovation to clients. Further, Mike opined that many client organizations are reacting to their disillusion by seizing the reins and taking functions related to innovation back in-house.

Pretty harsh words – but the fact is I agree that Mike’s comments accurately reflect today’s reality. That said, I believe a longer-term perspective puts things in a different light. While insourcing may indeed be a viable innovation strategy today, in my opinion that will change, and in the relatively near future. And the main driver for that change will be autonomics and Robotic Process Automation (RPA).

Specifically, every transaction engagement I’m involved in today has an element of RPA, cognitive computing or autonomics. I’m also seeing all the major providers developing impressive – and certainly innovative – proprietary RPA solutions to compete with off-the-shelf offerings from Arago, BluePrism and IPsoft. As RPA continues to gain traction and as these solutions are implemented, disruption of existing service delivery models will intensify, as processes are decomposed and reconstructed to incorporate new digital capabilities, as well as new roles and skill-sets for human workers. Putting that puzzle together is going to require innovation that few enterprises are going to have in-house.

Consider too the business plans of many of the providers, which call for significant sustained growth, but supported by very limited growth in staffing. Clearly RPA has to drive that model, and clearly the commitment to invest and build the knowledge is there.

In this context, while we may be seeing a pause in innovative energy from the service provider community, I suspect it’s the pause that happens before a pendulum swings back full-speed the other way.

For more information on this and related topics, you can download a recording of last week’s “Sourcing Savants” webinar. Sponsored by Horses for Sources and moderated by CEO Phil Fersht, the panel discussion included experts from leading advisory firms who discussed a wide range of issues facing the industry.

What Keeps an Analytics Expert Up at Night (Part II of II)

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In part one of this discussion, Alsbridge Managing Director Bill Huber spoke with Paul Burton, Senior VP and Head of Analytics and Research at Genpact, about how the growing use of analytics is redefining Business Process Management. Here’s a continuation of their conversation.

BH: What are examples of how analytics is changing BPM?

PB: BPO is outsourcing which grew up 15-20 years ago for arbitrage reasons.  The emphasis is shifting to process as a service, which has nothing to do with captives or rebadging.  It is more of a technology and analytics focus, to make it smarter to deliver the same service with less, but having the same group of people.  Customers are coming to ask for capabilities.  The cultural issue is that clients still expect to save money, even if the provider is delivering new capabilities.   In customers’ minds, taking people out of the process should mean freeing up resources to allow for the addition of capabilities.  They expect more for less, and not more for more.

The biggest thing is data. Clients have disparate data systems, CRM, back office banking, GL, finance, and sales.  None of them are ever fully integrated.  The notion of the 90s was building an enterprise data warehouse, but they never really worked.  The reason was that nothing was ever static, and changes to the system were difficult to implement.  The idea now is to leave the source systems alone, as they are what they are.  The new thing which is important is to simply virtualize the data from multiple systems and look at it in a single view, which enables the analyst to query the data for whatever purpose needed to run a report or produce a visualization.  The analyst will pull the query as often as needed.  These days, compute power is cheap, and network is cheap.  Data virtualization technologies are allowing you to pull together the data which used to be hard wired into the data warehouse.  Now analytics can be done near real time.

BH: Can you speak to specific impacts of analytics in vertical processes?

PB: In banking, risk is the big issue, with the need for stress testing, and so forth to satisfy the regulators.  Doing the model isn’t good enough.  Banks need to produce the model and let a third party look at it and then refine the model.  In low margin businesses such as CPG and retail, customer centricity is king.  Margins are low, so analytics enables you to build scale.  In businesses such as high tech and manufacturing, asset optimization is critical.  Analytical insights help to predict, mitigate and optimize repair and warranty costs.  For technology companies, manufacturers, airlines, and oil fields, asset optimization is huge.  It enables these companies to reduces reserves for product liability issues and frees up cash reserves from balance sheets.

BH: How should clients think about the business case for analytics?

PB: Clients need to focus on how analytics will enable a culture change. It’s not sufficient to do some neat math tricks, and it can’t be based on a one-time result. Analytics need to be embedded into business process so results are continuous.  This kind of culture change requires top down support, with C-level executives driving the use of analytics.  The evidence is out there to support the importance of analytics.  The problem is that companies have been spending money and not seeing the expected returns. The only way to spend money smartly is to change the culture so that you are realizing the benefits that you are investing in.

There are some similarities to when companies implemented ERPs.  When companies simply automated ineffective processes, they spent a lot of money with limited rewards. Once they began changing the process, the software became easier to implement and companies started getting returns.  The same thing applies to analytics.

BH: How can advisors such as Alsbridge help to enable more value to buyers of analytics?

PB: Advisors need to develop a view of the world that emphasizes the criticality of culture change. When that is integrated into the advisory services, advisors can play a huge role.

BH: What keeps you up at night?

PB: Not having the right skills early on.  The math and analytics are easy.  It’s the domain skills and business savvy to understand the industry and define the problems that are critical. The other thing that keeps me up is missing a big shift in the industry. Change is constant, and you need to always be aware of new innovations occurring.

BH: Thank you very much!

Three Perspectives on Analytics and BPM (Part I of II)

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The increasing use of analytics is redefining Business Process Management. Alsbridge Managing Director Bill Huber recently interviewed Paul Burton, Senior VP and Head of Analytics and Research at Genpact. Here’s a transcript of their conversation.

BH: Tell me about your background and current role at Genpact.

PB: I’ve now been with Genpact for seven months and am responsible for the analytics business worldwide. We have a global footprint with the majority of our customers located in Western Europe and the US. Our delivery capabilities are also global, with the largest population in India. It’s important to understand that the analytics business is not a traditional BPO business, and has more of the flavor of a consultancy with an industrialization/execution capability. A big part of our delivery is the onshore/on premise team, and we continue to invest in our onshore capabilities to drive analytical skills into the market. We currently have about 6,000 resources in our analytics business.

We have seen three primary views of the world in the analytics business, which shape the strategies that companies take to the market. The first is the pure technology view, taken by large legacy companies in the technology space. Their premise is that analytics is largely driven by better hardware and software. The problem with this view is that the track record of return on investment in terms of the business value of the analytics has been less than what C-level executives had expected. Looking across the market, we are seeing a lot of disappointment with this approach.

The second approach is one taken by pure analytics firms. For them, it’s all about putting more and brighter people in front of the customers, and solving math problems to deliver business insights. The challenge here is that the insights rarely become industrialized and part of the future state business processes utilized by the clients

The third view is where Genpact is. Technology is just an enabler. Clients don’t have math problems, they have business problems. The process component is critical.  Clients want to take insights and industrialize them, to make them repeatable at scale, so that the processes used to run the company become analytical processes. In this approach, self-learning and redesigned and reimagined processes provide a big bump in value realization

Genpact leads with process experts who focus the client on what they are trying to accomplish and how that delivers benefit to the company.  It’s about using the right lens and the right definition, which leads to specific solutions containing applied analytics and technology which are then embedded in business processes. These analytics enriched processes are not static, but rather are “self-aware”; learning evolving, growing, and never the same.

BH: How important is “analytics” to the future of BPM?

PB: Most clients are overtaxed and want a quick solution to whatever problem they are facing.  The perception of a quick fix seems satisfying, but does not yield long term results.  It’s critical to focus on cultural change to embed analytics into core processes that clients use to run the company.

Our objective is to start with domain and process and reimagine them to take a discontinuous jump forward.  The context is that 1) there will continue to be pressure in back office because cost cutting is not going away, 2) there is an increasing need for customer centricity – knowing your customer and market better and in real time.  The business objective through analytics is having a one-to-one relationship with each client even if you have thousands of clients.

In part two of this discussion Paul Burton will discuss what keeps him up at night.

End-of-Contract: Don’t Let the Cloud Opportunity Drift Away

Katherine Rudd Blog

Katharine Rudd, Managing Director –

The end of an outsourcing contract term requires a careful review of existing operations, coupled with an assessment of alternative technology, provider and delivery model options. In today’s dynamic marketplace, you simply can’t assume that what you have in place today will be adequate moving forward.

Consider cloud, where offerings are evolving at an especially frenetic pace, and where end-of-contract represents an ideal time to explore new opportunities. In many cases, service providers are too busy managing to the SLA and operational requirements of your agreements to keep pace with innovation in public and private cloud.

New cloud offerings can deliver major benefits to infrastructure management in terms of cost savings, labor requirements and agility. As competition heats up, most if not all of the major U.S. and India-based outsourcing providers have developed a healthy menu of hybrid, private and public cloud offerings. Brokerage services have matured, enabling clients to use third-party outsourcing providers to procure on-demand public cloud offerings and oversee and manage commercial, operational and technical requirements. Clients benefit by leveraging purchasing power, avoiding lock-in with one provider and offloading day-to-day management responsibility of multiple providers.

Hybrid cloud is generating a lot of industry buzz right now that can translate into big dividends in how you contract with your service provider. Adequately leveraging your existing infrastructure investments, while also taking advantage of agile PaaS and IaaS for growth or specific applications, can be a great way to deliver on a cloud roadmap in a less disruptive way.

These opportunities needn’t be restricted to the end of a contract period. Mid-term can be a great time to do a health check on a relationship to ensure that providers are driving innovation and not sitting on legacy infrastructure associated with high management costs.  Many contracts contain innovation or tech refresh clauses that can provide a window of opportunity to assess possibilities. However, depending on the structure of the agreement, the introduction of innovation may reduce resource requirements and negatively impact provider revenues. So sitting around and waiting for a provider to “offer” you innovation may leave you doing just that – waiting.

Translating Policies into Processes – the Compliance Challenge

David England Blog

David England, Director –

Complying with OCC regulations on third-party oversight clearly represents a clear and pressing priority for banks and financial services firms. So how are they doing?

The good news is that vendor management and sourcing organizations have made significant progress in navigating the tortuous regulatory maze and developing internal policies that align with regulatory guidelines and requirements.

The real challenge, however, is to convert those policies into rigorous and sustainable processes that operate seamlessly and consistently across a number of business units. Specifically, the compliance oversight of any given third party provider must involve sourcing, procurement, legal, finance, contracting, IT, vendor and risk management and often multiple business units – groups that don’t necessarily make a habit of playing nicely together. The gray areas that mark the boundaries between these different units only complicate matters. How, for example, do you determine where sourcing’s responsibility ends and vendor management’s begins? Or, what does corporate vendor management own, compared to what IT or a business unit’s vendor management own? These specific questions only underscores the scope of the broader goal – which is to define all the activities that need to get done, get the right people in place within each department and business unit and then establish and maintain the necessary flows between those disparate organizations.

Achieving that broader goal of alignment, communication and process discipline requires a reconsideration of the traditional role of vendor management. Typically, the vendor management function enters the sourcing lifecycle post-contract, which means that the function most directly involved with ensuring oversight and compliance has had no involvement in determining or understanding what is to be overseen, or in creating a contractual construct to support vendor management oversight and compliance. Put differently, vendor management is playing catch up before the game even starts – and in today’ regulatory climate, that game is becoming increasingly tough with increasingly high stakes.

The solution, of course, is to involve vendor management earlier in the sourcing lifecycle so that the frameworks and communication guidelines essential to effective third-party oversight can be clearly defined and baked into the relationship, rather than tacked on as an afterthought.

For more on Alsbridge’s perspective on third-party governance, download this white paper.

Profiting from Wellness – Pharma Focuses on Channel Strategies and Quantifying Outcomes

pills lying next to a piggy bank. symbolic photo for costs in me

Jennifer Stein, Managing Director –

As healthcare reform increasingly ties financial incentives to health outcomes, pharmaceutical firms face the daunting challenge of developing new channel strategies that address the imperatives of the Affordable Care Act.

For example, which constituent will take the lead to design and deliver programs to ensure patients take their cholesterol medication as directed, and encourage them to follow dietary guidelines to achieve optimal results? This leads to additional questions such as: Which programs are most effective? What’s the positive impact and how does in translate into revenue/savings? Who should administer these programs? The provider? The payer? The pharma company?

Today, all parties are turning to big data and analytics to crack the code of these complex questions, and are scrambling to adapt to the evolving healthcare delivery model.

For pharma executives designing a channel strategy, the question now becomes: how do I find the right mix of service providers that can offer insight into the changing marketplace as well as the relevant big data expertise?

From Alsbridge’s perspective, whatever the market sector, finding service providers with industry-specific expertise and proven capabilities is imperative.   In pharma, and in the case of measuring outcomes, enterprises require service providers who understand metrics and can provide insight into cause/effect correlations.

While looking to transform their channel strategies to adapt to new conditions, the reality is that pharma firms must find ways to service the old model as they create a platform for the new healthcare system.  Today, pharma companies are seeking to partner with Pharmaceutical Benefit Managers (PBMs) to drive the agenda toward patient outcomes. PBMs, meanwhile, want to drive prescription volume and compliance by offering basic training on the proper use of medications.  Strengthening and optimizing these and other partnerships is the next step.

Making the right service provider and channel strategy investments will be one of many deciding factors that make or break pharma companies.  With adherence and outcomes now increasingly entering the economic picture, pharmas have to ask which channel approach produces a better health result – because the answer has a direct impact on the bottom line.

Wireless Carriers Still Willing to Make a Deal

Businessman Holds Out His Hand To Make A Deal

Phil Hugus, Managing Director –

A recent report in CNET concludes that AT&T “wont chase customers” in light of a lull in the ongoing wireless price war. “After a particularly cutthroat holiday period,” the article states, “the carriers are raising fees and paring back on promotional offers.”

While this accurately describes the latest trends in the wireless consumer market, IT executives should take note that the enterprise space is an entirely different beast, both in terms of enterprise wireless contract renegotiation and the impact of the latest trends in enterprise BYOD programs where the wireless providers must work even harder to retain their client base, leveraging incentives where stipends will drive consumer behavior. We are seeing savvy clients signing new wireless deals and achieving 20 percent to 25+ percent price reduction results, along with significant contract term and technology benefits.

From Alsbridge’s perspective, while AT&T has become a bit more conservative in recent months following as they have stemmed the tide of net wireless unit losses to Verizon, they can still be driven to market leading pricing and contracts if properly leveraged. Verizon, meanwhile, is becoming a bit more aggressive in pursuing top-line revenues, again while properly leveraged. While we’re seeing subtle shifts in negotiating tactics, clients can still win with a leveraged approach capitalizing on the best market intelligence and negotiating tactics.

In other words, done right, it’s a buyer’s market.

“Innovation Investments,” Discounts and Monopoly Money

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Monopoly

Jeff Seabloom, Managing Director-

As enterprise technology vendors scramble to gain market share, we’re seeing a significant new trend emerging where customers are offered myriad “discounts” on core products. These are presented under the guise of a wide range of nebulous terms such as “special services,” “training,” “consulting,” and – a new term being used quite frequently – “innovation investment.”

I was recently involved in a negotiation where a major hardware vendor’s premium product – which is never discounted – was offered at a significant mark down. This didn’t seem right, so I did some exploring to decompose the actual deliverables and found that the “free” training and special services that were added as a special deal incentive were in fact charged elsewhere in the contract. And, upon further exploration into what this “training” and “special services” would entail in terms of vendor resources, it was clear that the answer would be, not very much at all.

In other words, the shuffling around of charges created the appearance of a discount, when in fact there was none.

This is all perfectly legal and very common. But the growing use of these “bundles” raises some important issues. The obvious concern is that buyers don’t have an understanding of the entire pricing picture and quote. Perhaps more importantly, this strategy creates an inaccurate representation of the playing field and makes it increasingly difficult for buyers to understand what they’re paying for products and services, and how their fees compare to what the market will and should bear.

Enterprise clients need to take a close look at the details of their agreement terms and demand to know specifically what they are paying for and what they are getting. This includes defining what exactly is meant by terms such as training, special services and innovation investments. That’s the only way to ensure that the incentives vendors are putting on the table aren’t made of monopoly money.