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● Think Tank

merge? Experts discuss fi scal, IT fruitfulness. By Rick Dana Barlow

T t

he mere mention of the term “merger” strikes fear and loathing on one side and alternately inspires hope and change on the other among company executives, employees, investors and customers,

as well as spectators. Publicly, the two companies bombastically and confi dently

promote anticipated revenue gains through an increased customer base and improved customer service over time that is reinforced internally by cost cutting and process streamlining in the form of layoff s or staff reallocation and non-profi table service line elimina- tions. As administration, fi nance, operations and corporate cul- tures blend, information technology forms the backbone fueling it all because computers, databases, diagnostic imaging, laboratory and surgical equipment must communicate with one another.

During a merger, what are some of the key hurdles/pain points IT execs have to overcome and why?

Sheldon Newman, Co-Founder, CFO, Executive Vice President, Channel Partner Relationships, ViiMed

I believe the success of mergers of healthcare technol- ogy companies usually centers around the combining of two potentially dissimilar cultures that have great products,

technology, talent and comparably strong markets. Some of the obstacles that need to be resolved are: • Evaluating the talent and determining who the “keepers” are and who just won’t fi t into the combined organizations. T e bean counters will always make the case for savings by eliminating redundancies. But mature, seasoned executives must not trade off solid talent for short-term savings. T e loss of good people will cost far more in the long run. And of course you never should lose the folks with the knowl- edge base that got you to the merger table in the fi rst place.

• Whether to tightly integrate the organizations or be loosely coupled. T ough the right call depends on the facts of the specifi c situation, remember, the latter will promote in- novation and nimbleness without being bogged down by legacy-based technology and short-sighted thinking.

• Relocation of one team. Should one of the organizations be relocated to take advantage of “plant” savings or maintain its original sites to promote innovation without the burdens of conformity?

6 April 2014 The ripe time to Terms like interface and integrate emerge – fi rst as a strategic

initiative but then as a tactical tedium when eff orts are com- plicated, delayed or otherwise fall short of perhaps unrealistic expectations. But that’s business, the business of healthcare being no excep-

tion. Health Management Technology explored the IT challenges and complexities during a merger of two corporate entities – be they two suppliers or two provider organizations (e.g., hospitals, integrated delivery networks, etc.) – and asked a small group of IT executives for their insights on how to succeed.

• Merging cultures and retaining the best of both organiza- tions. Cultures that promote the gold standard for service need to prevail, and aggressive product planning must not be thwarted by the old guard. Most of all make sure that customers benefi t from the combined cultures. S

Steve Matheson, Vice President, Product Management, BridgeHead Software

One key point is critical IT staff retention. Most providers do not realize how dependent they are on their IT staff until a merger. However, IT staff members understand. T ey are all concerned about the security of their positions, especially when there just might be their equivalent in the same position at the other provider. Unfortunately, the staff members with the most marketable skills often take the opportunity to test the job market fi rst, and often they have institutional knowledge that is key to the merger’s IT success. IT staff knows the specifi cs of the application portfolio that


runs the clinical and business operations of the hospital. T ey know the location of all the hardware, especially those servers and network devices that, for example, were temporarily installed in the closet on the 4th fl oor three years ago. T ese staff members are the only ones who can interpret all those Microsoft Visio diagrams that supposedly document every critical infrastructure component. T ey often are the only ones who know the support hotline number and processes you must go through to obtain support for the many IT vendors. I have heard from a number of IT senior execs that they wish more institutional focus, through


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