Health Management Technology

The healthcare industry continues to face challenging business conditions. These pressures compel healthcare organizations to seek new tools and technologies that help them optimize scarce resources, so they can drive growth and still deliver outstanding patient care.

Based in Memphis, Tenn., St. Jude Children’s Research Hospital is internationally recognized for its pioneering work in finding cures and saving children with cancer and other serious diseases. Financially supported by its fund-raising organization, ALSAC, and by research grants, St. Jude has 3,100 employees and 60 licensed beds, and serves about 4,700 patients each year. St. Jude also was named the highest ranking healthcare institution on the latest InformationWeek 500, a list of the most innovative users of information technology.

In 2003, our organization was faced with a collection of aging business systems dating back to the late 1980s. Some of them were near the end of vendor support. These disparate systems required numerous manual processes and hindered our ability to improve operational efficiencies. We knew we needed to replace our legacy financial, grant accounting, human resources, research administration and materials management systems soon. But, we also wanted new technology that would provide timely, accurate access to financial and administrative data.

Manual Processes Hinder Cost-effective Growth
Our legacy business software not only required time-intensive, manual processes, but it also lacked the ability to provide online access to reports. To drive our growth plan, we needed to provide timely information to executives as well as the human resources (HR) and financial services (FS) departments. Also, we also wanted a reliable system that would give end-users intuitive, self-service access to key information so they could create reports themselves, without having to ask information technology services (ITS) for the data.

In the area of grant administration, we had traditionally managed our grant portfolio with numerous Excel spreadsheets and other “shadow” systems. This required many hours of manual data entry and made it difficult to track budget status in a timely manner. Instead, we wanted a system that would centralize and streamline grant management by automatically tracking budgets and cost allocations. We had multiple goals for our new business system, but among the key goals were to:

Establish a single data source available to all key stakeholders;
Automate formerly manual or paper-based financial processes, including grant administration and requisitions;
Deliver online, self-service access to budgets, financial commitments and spending reports;
Provide capacity in the administrative and financial system infrastructure to support near-term and long-term growth objectives.

First, we had to consolidate our core business systems on a single Web-based platform.

End-Users, Steering Committee Drive System Selection
This project would be a catalyst for dramatic change in our organization, so it was critical to involve key stakeholders throughout the process and to ensure their buy-in for the implementation’s success. We created a steering committee to oversee our vendor selection process, which included hospital executives. The steering committee created and sent the RFP to the major ERP (enterprise resource planning) vendors. After an exhaustive evaluation, we invited two vendors on site to provide two rounds of system demonstrations for the steering committee as well as key users from the hospital’s FS, ITS, HR and various research departments. Based on these demonstrations, the steering committee and end-user advisors made a system recommendation to our hospital leadership for their final decision.

St. Jude ultimately chose to replace its legacy business systems with the Lawson Enterprise Financial Management, Supply Chain Management, Human Capital Management and Business Intelligence suites because Lawson offered performance improvements in a single, user-friendly system.

Phased Implementation Eases Transition
St. Jude approached the system rollout in two phases to help ensure the project’s success. Phase I included implementation of the new financial and supply chain management applications and ran from June 2003 to June 2004. Immediately following this milestone, we focused on deployment of the system’s self-service functionality from June 2004 to February 2005. This began with a pilot project in several hospital departments and included the requisition self-service (RSS) module and the training of more than 1,300 users.

Running concurrently with the deployment of RSS, we kicked off Phase II of the project in September 2004. Completed in September 2005, Phase II included the HR and payroll applications, as well as an upgrade to the Phase I applications.

Conducted simultaneously with Phase II was the launch of e-Reporting, part of the Lawson Business Intelligence suite, to more than 700 financial users. The e-Reporting implementation began in June 2004 for core users and pilot groups, but the launch and training for the majority of the users of monthly departmental reports ran from August 2005 to January 2006. Combined with the system’s self-service functionally, the e-Reporting application was the final component we needed to empower our users to create and use customized reports to drive betterdecision making.

Today, our consolidated business system runs on a single Oracle database, using the AIX operating system and other IBM hardware and middleware.

Simplified Administration Boosts Results
As with any complex IT project, a comprehensive change management plan and well-timed end-user training were critical. Throughout our phased implementation, our project team and steering committee solicited end-user feedback for all affected departments. Our change management plan also included communicating project milestones and business process changes to our executive team, employees and, most importantly, the system end users.

Our training program started with a core group of power users in each area completing four- to eight-hour classes that addressed their particular department’s needs. As go-live dates approached for each new application, we conducted two- to four-hour training classes for the more casual system users. These classes highlighted process changes specific to end users’ daily activities. We supplemented all of our training classes with Web-based tutorials we developed in-house. Overall, it took about four months to train everyone impacted by the new system.

Since implementing a unified business system, St. Jude has achieved each of its project goals and is now realizing a number of tangible benefits, including:

Reduced the turnaround time on month-end departmental reports from five days post-close to immediately on the closing day. Previously, we had six separate reports that made up the monthly financial package. This package totaled about 4,500 to 5,000 pages. FS created two full monthly packages containing these reports. One full copy remained in FS and the other was manually separated and distributed to the end user community. Now departments and FS can access month-end data online in near real-time.

Reduced requisition approval time by 90 percent. Automated workflows enabled us to reduce the average requisition approval time by 90 percent, from 35 to 3.5 hours. Today, 95 percent of the hospital’s more than 70,000 annual requisitions are approved in less than four hours. In the past, we manually routed paper requisitions through the entire approval process. If a requisition required approval from a vice president or our chief executive officer, it could take weeks depending on their travel schedules. Today, our new Web-based system electronically routes requisitions for approval. So, if an executive is out of town, he or she can still approve a requisition online by accessing our business system via a virtual private network.

Decreased invoice processing time by 75 percent. We have increased the number of requisitions processed and approved via the self-service application from 1 percent to 99 percent. This essentially eliminated all manual, paper-based purchase orders and reduced our overall requisition process time.

Consolidated reporting speeds analysis and decision-making. Today, department managers receive and review “big picture” reports through a Web browser, eliminating the need to create and distribute time-consuming paper reports. Executives also can “drill around” for more details on the transactional data behind each report. This access to timely information helps them analyze key performance indicators and better understand how and where we spend dollars.

The consolidated business system also gives St. Jude a better picture of our overall operations and performance metrics. For example, it enables department heads to accurately track current budget balances to ensure funds are available for priority purchases while avoiding cost overruns. Additionally, the Web-based system has helped us increase monthly usage of electronic financial reports by 44 percent, including month-end accounting, grant checkbook and capital expense reports.

Our unified business system now provides an enterprisewide means for tracking, viewing, analyzing and acting upon key financial information. This equips our management team with the information they need to make strategic cost-management decisions and, most importantly, focus resources on our mission of delivering outstanding patient care.

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Donny Wiggins is director and assistant chief information officer of Information Technology Services at St. Jude Children’s Research Hospital. Contact him at donny.wiggins@stjude.org.