Optimizing the Business and IT Relationship

A Structured Approach to Implementing a Business Relationship Management Framework

Spring 2009

By Gregg Mohrmann, MPA, PMP; Drew Kraatz, MBA, PMP; and Bonnie Sessa

Note: This article was originally published in JHIM, Spring 2009 edition, Volume 23 / Number 2.

ABSTRACT

The relationship between the business and the IT organization is an area where many healthcare providers experience challenges. IT is often perceived as a service provider rather than a partner in delivering quality patient care. Organizations are finding that building a stronger partnership between business and IT leads to increased understanding and appreciation of the technology, process changes and services that can enhance the delivery of care and maximize organizational success. This article will provide a detailed description of valuable techniques for optimizing the healthcare organization’s business and IT relationship; considerations on how to implement those techniques; and a description of the key benefits an organization should realize. Using a case study of a healthcare provider that leveraged these techniques, the article will show how an organization can promote this paradigm shift and create a tighter integration between the business and IT.

EXECUTIVE SUMMARY

Healthcare providers have had long-standing issues successfully aligning their IT and business units. IT is often separated from business by an invisible “protective” barrier put up by each side. However, focus on aligning the business and IT goals to ensure IT is working on business needs, while partnering for organizational success is proving to be a successful trend in today’s IT industry. The transformation of IT from a traditional technology focus to a business improvement focus will help preserve, enhance and gain more support for its role in delivering services that meet business needs.1

Business and IT alignment is not a new concept. In fact, the term business relationship management (BRM) has been around for many years. However, the BRM term becomes clearer if it is augmented to say business relationship management for technology (BRMT). As economic and regulatory pressures increase and healthcare providers are asked to do more with less, it is increasingly important for IT organizations to focus more effort on successfully implementing a BRMT framework. Forrester states, “IT and business strategy alignment remains a concern of many IT and business executives, yet few organizations have put in place any formal processes or activities to improve it, and even fewer attempt to measure it.”2

This article includes an in-depth look at BRMT and its implementation in a healthcare provider setting. A discussion of key benefits will be included, as well as best practice components, implementation considerations and a review of a case study where BRMT was successfully implemented at a major healthcare provider.

BENEFITS AND IMPORTANCE OF BRMT

Effective execution of a BRMT strategy will more closely align the business and the IT organization. Although these benefits will not fully be realized for years, healthcare providers should not take them lightly, especially as IT becomes more important in the delivery of high quality and effective healthcare services. Below are key benefits that healthcare organizations should realize as their BRMT strategy matures.

Increased business satisfaction with IT service delivery. The business will no longer view IT as an independent organization but as united with IT, as IT closely aligns itself with business needs and objectives related to their strategy and planning for organizational success. Since IT is now in a position to deliver what the business wants and needs and there is transparency to what IT is working on, business satisfaction of IT delivery will naturally increase and lead to additional IT support going forward.

Renewed focus on delivering IT services in line with business strategy. A successfully implemented BRMT framework has at its core the ongoing drive to ensure business and IT plan business direction together. In turn business supports IT initiatives called for to support the joint plan. IT is involved with business up front and through the complete work management lifecycle. While IT manages all types of work the business stakeholders help prioritize and align the delivery of IT services to the overall business strategy.

Appropriate level of controls in place to monitor IT spending and work effort. As a result of a strong and stable BRMT framework, controls will be in place to ensure that proper approvals of spending and work effort are done with both business and IT input, there is transparency throughout the organization as to what IT is doing, and finance will be involved in not only allocating the money but controlling how it is spent.

Increased focus on quantitative and qualitative measures of IT performance. IT has historically focused on anecdotal qualitative measures of its performance. If BRMT is properly institutionalized then IT will work with the business to determine appropriate quantitative metrics that will suitably measure IT’s ability to help the business more successfully execute its strategy. If both business and IT can agree on the metrics and their outcomes, business can get better, more quantitative measures of IT performance that are aligned with business success.

Joint accountability for organizational success by business and IT. One key benefit to aligning business and IT is both parties take ownership of the business direction. IT service will support that direction which helps breakdown the boundaries between IT and business that prevents progress and negative perceptions of the IT organization. IT will feel part of the business success; therefore the organization will support one another’s joint responsibility for the organization’s success.

Effective demand management and forecasting. A well-established BRMT framework will drive the organization toward more effective intake and demand management processes and tools to properly govern the work, report on that work and actually prioritize and deliver it. This helps drive more efficient allocation of spend and resources and demonstrates to the organizational leadership that IT is effectively controlling its resources and managing its money. Better demand management assists with clearer understanding of return on investment, improves upfront and ongoing planning, and helps elicit more executive support for IT.3

Increased transparency and frequency of communication around IT service delivery. As BRMT progresses in a healthcare organization there should be greater transparency and communication regarding what IT is working on for the business and how the delivery of services is being measured. This transparency and communication, built on a single source of truth with specific reporting standards, enables the business and IT stakeholders to see the “whole picture” and operate collaboratively to ensure IT is working on what the business needs within the expectations that the business is setting. Having an IT management and governance system in place to automate this communication and enable realtime transparency is a plus for any healthcare organization looking to implement a robust BRMT framework.4

Improved support and increased efficiency with application and system support. Today, IT often feels that the systems and applications are owned by IT—leaving business out of direct planning and ongoing support decisions. Bringing business and IT stakeholders to the table around the planning, support and maintenance of key applications and systems with joint accountability will ensure that the business is involved in key application and system decisions that help drive business success.

BRMT FRAME WORK BEST PRACTICES

To effectively structure and execute the delivery of true business and IT alignment, the organization needs to focus on establishing a comprehensive best practice BRMT framework consisting of five critical components.

Tightly integrated IT and business strategy planning. Business and IT have traditionally separated their respective strategic planning. The BRMT framework requires that IT and business strategic planning are collaborative. First, the organization should restructure IT and business planning cycles so they are in sync. Second, the organization should have a collaborative strategy team including both business and IT stakeholders. Third, finance and its planning cycle needs to correlate and be in sync with the new IT and business planning cycle. This ensures important initiatives and investments are appropriately funded and supported by finance. Fourth, this new collaborative team should plan for three years out rather than a shorter (often one year) period. Finally, quarterly meetings should be set up to review the execution of this strategy.

Business-focused governance model. If done well, governance of IT services inclusive of projects, service requests and ongoing operations is extremely important in driving better alignment of IT. The organization should switch from an IT-focused governance model to one that is business focused and has direct business involvement on each of its committees. The model should be set up to deal with ongoing issues, help plan the organizational strategy and monitor how IT is delivering on that strategy.

An appropriate structure would include a governance committee at each hospital location to funnel hospital based ideas and plans as well as governance committees for each of the following areas: clinical, business systems (inclusive of finance and ERP) and infrastructure (to ensure that the backbone of the systems is in line with the plan for e execution of the current strategy).

The highest level should include a rollup of the previous two levels to the IT steering committee, which would be more appropriately termed the technology steering committee, and would have the final decision on strategy, plans and execution based on the previous two levels of input. It is essential that each of these committees is co-chaired by both a business leader and an IT leader who have the respect and support of their peers. The CEO and CIO should chair the technology steering committee. The organization will have to understand and buy in to this process through appropriate communication, documentation and reporting. The process will have to be approved and adhered to by the CEO and executive team.

Business-driven portfolio prioritization process. Now that governance and planning are tightly tied to both the business and IT, it is essential that a stable and usable portfolio prioritization process is set up that supports the business direction. First, the portfolio process should mimic all three governance levels so reporting and prioritization can be done at each level. Projects and service requests should be planned and reviewed by the relevant committees for that work, e.g. the clinical advisory committee reviews clinical focused work. Second, the appropriate metrics for prioritizing work need to be in place. Third, the committees driven by the business will need to be empowered to change priorities and report those changes up the governance levels so appropriate decision making can take place. Fourth, it is extremely important for the organization to have a structured prioritization communication and reporting process to provide transparency and feedback.

Strategically placed business relationship managers. Although popular in other industries, the concept of business relationship managers for IT is relatively new in the healthcare industry. Establishing the role of business relationship managers for IT and then strategically positioning those managers to support the business is critical to BRMT success. Initially the role of the business relationship manager needs to be clearly defined. It should be someone who can communicate well, is respected by executives, empowered and is comfortable with both technology and business lingo. Then IT will have to make a decision as to where to place these relationship managers. It is useful to have them strategically placed at key organizational locations where healthcare services are being provided. Next, these managers will need to report to IT but have a dotted line to the business executives they are serving. Additionally these managers will need to have full access and transparency to the reports and communication around work and initiatives pertaining to their location. Finally, these managers will need to have a voice in the appropriate governance committees where work pertaining to their location is planned and reviewed.

IT performance metrics tied to business success and benefits. When designing and executing a BRMT program, a performance metric component is critical. These metrics are a switch from the previous paradigm of IT performance metrics that aren’t specifically related to the way the business determines its success. First, IT will have to work collaboratively with the business to determine which IT measures to put in place. Second, IT has to make sure it can actually measure and report on these new metrics in a viable fashion. Third, IT will have to create a scorecard report that is tightly integrated to what the business wants and the new improved governance structure. Fourth, these IT performance metrics must have both a qualitative and quantitative angle and include key financial metrics that are acceptable to finance.

There are five additional components that should be considered to support a strong BRMT program. These additional components will complement the earlier critical components and will help solidify the program benefits.

Development of an IT process center of excellence. Due to the economic downturn and the increasing focus on IT efficiency, it is becoming more important to improve IT processes, especially those where the business is directly involved. Aligning IT and business should focus on improving processes. Instituting an IT Process Center of Excellence (COE) supported by both parties is a step in the right direction. Process changes can be hosted and supported out of this COE. These process improvement initiatives should be included in the combined IT and business strategic plan.

Placement of an IT marketing and communications manager. BRMT structure is dependent on having good communications management and “marketing” IT. Although not needed at the outset, it will become apparent over time that IT needs a dedicated manager in this position responsible for communications and marketing IT to the business. This individual would most likely report to the CIO.

Implementation of an IT management and governance system. To support all of this BRMT transparency, communication, reporting and governance it is will increasingly become more important to provide real time access to information on IT work supporting the business. Putting in basic IT-MG functionality will help move the organization down the initial IT-MG maturity path and better align the business and IT.4

Institutionalization of application response teams. A newer concept that some healthcare IT organizations are adopting is to form application response teams comprised of IT and business stakeholders. Collectively a collaborative business and IT team provides a much higher level of support for each application and system and helps align the business and IT. Ownership and accountability for application and system success is now shared between IT and the business.

Demand management structure integrated with a talent management strategy. Since the business of healthcare is consistently changing, it is important to understand business resource demands and how to service that demand. A BRMT strategy and program need to have a defined demand management structure and process that feeds HR and resource management with the appropriate data to manage their resources and talent within the organization.

ESSENTIALS TO CONSIDER IN A BRMT IMPLEMENTATION

When planning a BRMT implementation it is essential to consider two critical dimensions: the organizational support and the implementation needs for ensuring that BRMT will be successful.

There are four key considerations that involve having the proper organizational support for a BRMT program.

First, BRMT must be understood, embraced, and championed by the CIO and by key business executives including the CEO, CFO and COO. Without executive involvement and active support, BRMT will be un-successful and will not achieve much momentum.

Second, no BRMT program can work without acknowledging the need for appropriate funding for resource time as well as funding for any appropriate tools and systems to support the program.

Third, the inclusion of the finance organization in the BRMT program from its inception to its implementation and management is crucial. Finance needs to put controls in place to ensure that each BRMT component is appropriately funded, provides the necessary ROI, and achieves the financial benefits it claims. Additionally, finance will provide great perspectives to each BRMT component team to ensure that finance controls, tools, and processes are included in all component processes.

Fourth, it is critical that resources involved in making BRMT successful are involved, committed, driven and aligned around the organizational goals and objectives for BRMT.

Switching focus to implementation needs, there are four key considerations the organization needs to be cognizant of when planning and implementing BRMT.

First, BRMT needs to be planned out and incorporated into business and technology strategic plans. There should be specific initiatives that build and improve what is currently in place. It is important to assess the current state and then plan the “to be” vision and how by executing certain key initiatives the organization will attain that vision. As a second step, the BRMT program should be phased in by looking at each key component in the framework and properly planning a phased in approach that provides incremental successes while climbing the BRMT maturity curve in a reasonable fashion.

Third, in order to appropriately implement BRMT, ensure that key organizational resources, one from the business and one from IT, own each BRMT component from its assessment to its phased implementation. Those two individuals should be well respected by their peers, collaborative and accountable for the success of those BRMT components.

Fourth, make sure BRMT is run as a structured program with each project underneath the program being a specific component. Each of these components needs to have specific, tangible, critical success metrics that can be measured at key points in the implementation and are agreed on by both the business and technology owner for that component.

CONTINUUM HEALTH PARTNERS: EXECUTION OF A BRMT STRATEGY

Continuum Health Partners Inc. (CHP) is a nonprofit hospital system in New York City, comprised of five service organizations including Beth Israel Medical Center, Roosevelt Hospital, St. Luke’s Hospital, Long Island College Hospital and The New York Eye and Ear Infirmary. Combined, these hospitals provide 2,727 certified beds resulting in 1,211,772 ambulatory visits and 124,348 discharges, based on 2006 statistics.

Between 2001 and 2008, CHP outsourced the day-to-day operations of their IT services. In 2008, CHP in-sourced infrastructure, technology and applications related functions, solidifying their internal Corporate Information Services within the organization. CHP corporate IT consists of approximately 280 IT professionals. The department responds to approximately 15,000 help desk interactions and 2,000 service requests per month. This is representative of the efforts in support of more than 200 applications and a robust infrastructure platform to support those systems. In 2008, the organization closed approximately 52 IT project initiatives an additional 60 still actively being managed.

MISALIGNMENT CHALLENGES

There was a significant challenge in getting disparate disciplines and sites to work together toward a common goal from an IT perspective. Even though outsourcing relationships brought some structured processes and governance, major organizational challenges still remained.

IT was not viewed as a partner.
Operational IT efforts were not appreciated as being strategic in nature.
IT was not fully engaged in many project initiatives or was brought in late.
Technology decisions were made without IT involvement including purchases.
Lack of transparency across the organization.
Key IT processes involving the business were not followed.
Lack of direction and commitment in existing committees.
Consistent introduction of unplanned work into an unmonitored IT portfolio.
Reactionary vs. strategy based decision making.
Project scope creep was a common occurrence.
Inconsistent cascade of information between sister entities.
IT service level based metrics vs. clinical and business outcome based measures.

These challenges provided opportunities internally for CHP to mature as a cohesive partnership and operate under one model. The organization needed to focus their efforts on encouraging open dialogue and educating the user community on the breadth and depth of information technology and its intended purpose. As a community, they needed to understand stability, the impact of new technology, and the need for controlled technological change in the environment. The community needed a way to continuously ask, “Are our investments in information systems and technology resulting in the anticipated clinical and business outcomes?” This required a top-down campaign for change with a goal of driving accountability through exposed opportunities and increased transparency and a significant paradigm change that required key processes and controls put in place.

APPROACH AND IMPLEMENTATION

CHP embarked on the effort to fortify the relationship between IT and the clinical and business community. Before embarking on this effort IT and business leadership assessed the current BRMT environment and as a result determined that this effort should focus on three main BRMT component that were to be executed in parallel: focusing on enhancing the current IT management and governance model to become more business driven; placing localized business relationship managers that support the IT and business relationship; and developing IT performance metrics directly tied to organizational success around specific clinical and business outcomes.

Before the three components were designed and implemented it was crucial that IT and business leadership collaborated on the critical success factors for the BRMT program. The following was the list leadership determined.

Accountability for consistent presence from an interdisciplinary perspective.
Revitalized performance metrics focused on accessibility of systems and related technologies.
Clinical and business outcomes on the existing quarterly metric dashboard rather than simple on-time/on-budget performance.
Adherence to standardized processes for initiative intake.
Balancing the needs of the organization, while addressing those of the individual hospitals.
Consistent and sustainable communication from the top down.
Increased satisfaction with IT-service delivery.
Cost and risk avoidance through discussion forums to allow better ROI decisions and business planning.
A consolidated list of work effort that allowed for better demand management of both IT and business resources.
Enhance the IT management and governance model.

As depicted in Fig. 1, disparate committees and advisory groups were reorganized into a three-tiered model. The main focus of this was to create the interdisciplinary committee of executives representing each site. This group was charged with setting the strategic direction for the organization in regards to information and technology management. COMMIT (Committee for Management of Information & Technology) ensures objectives and initiatives defined by the organization are measurable and aligned to support performance goals. The formal charter of this body is to drive balanced and strategic decision-making based on a defined vision and set of strategic imperatives. This committee is strategic in function holding the organization accountable for the overall governance process.

The development of steering committees to bring key clinical and business stakeholders together focused on IT meeting their needs as a community was also important. These committees focus on initiatives presented from the user community via the advisory boards. The Clinical Information Management and Systems Steering Committee defines and recommends metrics to ensure that related initiatives are aligned with the organization’s desired clinical outcomes. This body leverages their expertise in clinical best practices, pathways, and JCAHO IM guidelines as their foundation. Likewise, the Business Information Management and Systems Steering Committee defines and recommends metrics to ensure that business and operations related initiatives are aligned with the organization’s desired financial and business outcomes.

A technology and architecture steering (TAS) committee was put into place to help map the clinical and financial/business strategies of the organization to IT. Through that effort, the TAS committee worked with teams to design recommendations for infrastructure improvements, enhancements, and standards to best support the operation and strategic initiatives defined. The organization typically overlooked the impact or fit of a new technology or system in the existing environment. This committee exists to ensure that items brought through the governance process are technologically sound solutions.

Local advisory boards at each main hospital are forums for information to cascade from strategic bodies to the user community on a consistent basis. These bodies serve primarily to bring the business or user view of technology into the governance decision- making process. The goal is to ensure that there is a community approach to address change and hear opportunities. This group would recommend priorities for the respective site and what those mean to the site’s environment in comparison to enterprise wide initiatives.

Develop IT metrics tied to clinical and business outcomes. IT embedded the concept of balancing decisions based on the organization’s core imperatives into the decision making process. Initiatives are identified to meet defined objectives, and were reviewed through this governance process, prioritized, funded, implemented and monitored. This process focused the organization to move toward common goals while leaving opportunity for innovative solutions to be brought to the table.

Ultimately, through discussion and review, lists of viable recommendations bubble to the top. These recommendations are packaged and presented along with the current portfolio so the organization can see the impact of adding additional initiatives. This was a first step toward introducing prioritization and balancing the portfolio of work defined.

Metrics also were a critical component. As objectives and initiatives were defined, the organization needed to ensure they were aligned with defined objectives and how they would be measured during and after implementation. All three steering committees are polled each month for feedback on the metrics provided and recommendations for additional review or revised metrics to be monitored. For example, as clinical improvement initiatives were identified, programming may be done in the CPOE system to add a rule or alert to trigger action. A metric would be added to the dashboard to ensure that the IT resources expended actually drove clinical improvement. The value proposition of that IT function becomes apparent. A summary of select metrics are presented to the organization’s board of directors on a quarterly basis (Fig. 2), while detailed dashboards are prepared monthly and presented as requested.

Leverage business relationship managers. Due to the new BRMT model the consistency with messaging in all communications was crucial. The organization refocused and standardized the role of an IT liaison to the user community. This role of Business Relationship Manager (BRM) serves multiple purposes but most importantly ensures the consistency of messages and communication throughout the governance process to their respective locations but also acts as a consistent point of escalation. Each of the three major hospitals has one assigned BRM. These individuals coordinate the local IT Advisory Boards and attend the Technology Architecture and Standards Steering Committee. This ensures initiatives presented are heard by all sites, encouraging the sharing of like solutions and lessons learned from the other sites.

OUTCOMES OF THE BRMT PROGRAM

CHP was successful in realigning the IT and Business relationship by reorganizing its governance, performance management and placing key business relationship managers at each hospital location. Specifically, some key outcomes were:

COMMIT members are consistently held accountable by executives for clearly and consistently communicating the vision, strategic plan, and accountability metrics across the organization and at their respective hospital locations.
Business and clinical Steering committees are using their expertise to solidify strategic objectives and identify improvement imperatives for governance consideration. They are also reviewing the results of the work completed to ensure it was appropriate and desired outcomes were achieved.
The Technology and Architecture Steering Committee helps prevent unauthorized purchases of infrastructure as well as implementation of substandard technology.
Restructuring and standardizing local hospital advisory boards gave executives a medium to ensure consistency in communication. BRM’s at each site have helped to eliminate the “Man behind the curtain” perception of IT. There is a trustworthy and educated face to put with the function.
Bringing both the positive and negative perspectives to the table ensured the committees were balanced and had realistic representation of the user community. By the time change was being communicated, it had already been debated, negotiated, and solidified by these committees that now represented the organization.

LESSONS LEARNED

Each level of the reorganized BRMT structure is charged with submitting opportunities for improvement or lessons learned as soon as they are realized. During the first few months many adjustments were made to the process to improve efficiency and communication. There are a few important guidelines to keep in mind:

Do not assume. Try not to assume that the community and leadership understand what information is available and how things work. Ask them if they need explanation before inundating them with reports and data, ask -what is truly important to them and the business.

Communicate, communicate and communicate. In this type of effort clear, concise and consistent communication is key.

Understand your audience. There is often a delta between what executives want to see and need to see.
Flexibility and change. Have a plan and stick to it, but listen as you move through the implementation. Be transparent, share the concerns or opportunity presented back through committees to see if a course correction is warranted. Business Relationship Managers all operate under a standardized model but the model is not black and white. The individual BRM’s may have different boundaries and expectations set to respond appropriately to the culture of their respective sites.

Know who your champions are. Try to understand who your champions are early on, they will be your early adopters and will be critical to the success of the overall governance process. Likewise, you should identify who might be resistant to the changes being made and start your campaign early with them by involving them up front.

IMPROVEMENT CONTINUES

The structure is now in place allows CHP to leverage an interdisciplinary approach to strategic planning and decision-making, exactly the initial outcome desired. However, as with any significant change or restructuring, CHP’s story has not ended. There is continuous review of the BRTM model. Committee participants and structures are reviewed annually. As BRMT matures, steps are being taken to more tightly integrate the IT and business strategic planning process through collaborative capital budgeting and the development of three- to five-year strategic plans, an ITMG system is being fine tuned to support project management, reporting and the prioritization process and the organization is still continuing to position itself to work toward its ultimate goal of working toward a business-driven prioritization process to optimize the portfolio of initiatives.

CONCLUSION

BRMT will continue to be an important topic for CIOs especially considering the current constraints in the healthcare industry. Healthcare organizations will need to continue to adjust their alignment in a positive fashion between IT and the Business as needs change and can by consistently evaluating their BRMT maturity through metrics and satisfaction surveys. If IT focuses on the business and is collaborative, the partnership between Business and IT will remain positive and the focus will be on increasing efficiency, doing the right things and maximizing the organizational success in achieving its objectives.

AUTHORS

Gregg Mohrmann, MPA, PMP, is a Principal at Aspen Advisors, a strategic healthcare provider advisory firm.

Drew Kraatz, MBA, PMP, is the Director of Implementation Management Systems Strategies and Support at Continuum Health Partners.

Bonnie Sessa is the CIO of Continuum Health Partners.

REFERENCES
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2. Symons C, Cullen A, Worthington B. Synchronizing strategy and the IT portfolio: doing the right things every time. Forrester Research. July 25, 2008.
3. Mohrmann G, Schlusberg C, Kropf R. Demand management in healthcare IT: controlling IT demand to meet constrained IT resource supply. JHIM. 2007;21(4):56-63.
4. Mohrmann G, Kropf R. IT management and governance systems and their emergence in healthcare. JHIM. 2007;21(1):33-39.