Enterprise IT Value, a Retrospective

About a year ago, John Glaser was in the hospital. Not an unusual place to find the vice president and CIO of Partners HealthCare System, a Boston-based company that manages 10 Massachusetts hospitals. But this time, Glaser was there to visit his wife. She had just undergone knee surgery and lay in the recovery room, emerging from her anesthesia fog. Suddenly one of her physicians stepped into the room and introduced himself. However, before Glaser could thank him for his work, the physician thanked the CIO for his. He recognized Glaser as one of the primary architects behind the hospital’s provider order entry system (POES), an electronic check-and-balance system that warns doctors when their prescribed medications or tests might cause adverse reactions in patients (see “The Rx Files,” Nov. 1, 2000). This homegrown system, first implemented at Boston’s Brigham and Women’s Hospital in 1993, has demonstrably improved patient care, cut health-care costs and was a 1996 Enterprise Value Awards winner. Partners is now planning to roll it out throughout their entire multihospital system. Smiling, the physician told Glaser, “I just want you to know that your system has really saved my ass a few times.”

How’s that for a testament to long-term value? Technologically, the Windows NT-based client/server system isn’t particularly impressive—not when compared to some of today’s dazzling, state-of-the-art telemedicine systems. But strategically, as a means of improving medical care, POES has no peers. “This is one of those systems that feeds on itself,” Glaser says.

POES is not alone. In taking a fresh look at some of the past award winners, we found several that continue years later to bring noteworthy value to their host companies. Some, like POES, don’t employ bleeding-edge technologies, but still deliver competitively differentiating results. Others, such as SBC Communications’ Easy Access Sales Environment (EASE), a 1999 winner, have grown beyond their parent companies to become industry standards. Then there are those such as Black & Veatch’s PowrTrak information system, a 1998 winner, which continues to evolve with emerging technologies and changing times.

Of course, as the complementary bars of emerging technologies and business-IT collaboration have been raised, some past winners don’t look so remarkable today. Take SINet (which is Schlumberger’s Information Network), for instance—a 1997 Enterprise Value Awards winner. This intranet was remarkable when Schlumberger applied for the award in 1996 and unique when the global manufacturing and technology services company pioneered it in 1985. Judged on its own merits, SINet probably wouldn’t win an award today—intranets are ubiquitous in business now. Yet, the business-IT collaboration that resulted in that system has helped SINet evolve into a business backbone that has brought Schlumberger new efficiencies, cost savings and a new network services line of business. The initial SINet success and its subsequent evolution have helped cultivate a risk-taking attitude among Schlumberger’s top decision makers. “We took two or three risks at the right time, like building [SINet] on TCP/IP in 1992,” says Jean Chevallier, Schlumberger’s vice president of IT. “And we continue to take risks today.”

And what about the people who built or sponsored these award-winning systems? Some, such as former Black & Veatch CEO Jim Adam, have retired. Others, like SBC’s Mark Steinmetz, have moved on to bigger roles within their companies, in part because of their connections to these high-profile projects. And there are even a few—Glaser and State Street CIO John Fiore come to mind—who have become award judges. Glaser, who has been a judge since 1998, says he sees one consistent thread among the winners from all the represented industries: superb management. “Many of these projects haven’t just changed organizations, they’ve changed entire industries,” Glaser says. “In each of these projects you’ve seen people who are quite willing to be bold. They have great vision, great execution, a willingness to undertake a risky endeavor—and they pull it off.” Adaptability is another common trait. The most successful award-winning systems are those that are flexible enough to meet today’s needs while anticipating tomorrow’s. Glaser’s own POES is a good example; it was built to serve a single hospital, but it will soon serve 10 hospitals in the Partners system. This exponential scale-up wouldn’t have been possible had Glaser’s team built the system to serve only Brigham and Women’s immediate needs in 1993.

Bottom line: The hard work doesn’t end with the Enterprise Value Awards ceremony. For companies that want to achieve lasting value, the trick is to build systems that are solid enough to deliver hard results but flexible enough to adapt to technological, personnel and business changes. We caught up with three past Enterprise Value Awards winners—SBC, Black & Veatch and Partners HealthCare—to see how their award-winning systems have weathered the transition from then to now.

SBC Goes Coast to Coast with EASE

SBC Communications

1999 enterprise value awards winner/easy access sales environment

Then: Online sales negotiation tool helped this Baby Bell’s sales reps sell more products faster in an exclusively local telecommunications marketplace.

Now: Last July, SBC became the second regional telephone company allowed into the long-distance marketplace, in part because of its success with EASE.

SBC was always thinking long—long distance, that is. Ever since the enactment of the Telecommunications Act of 1996, which broke the telephone company monopolies, this San Antonio-based local exchange carrier (formerly known as Southwestern Bell) has set its sights on breaking into the lucrative long-distance market. And the way to do it was with an information system built to handle the local marketplace—with EASE.

SBC’s Easy Access Sales Environment (EASE) is an online sales tool that provides data and direction to help the company’s 8,500 service representatives sell more products and provide better customer service. Between 1992 and 1999, SBC invested $34.2 million in EASE, realizing an estimated return of $483.6 million in cost savings and increased revenue. Because service reps were able to see more products faster, SBC’s volume of calls grew from 80,000 to 100,000 per day, the length of the calls was cut by an average of 2.5 minutes, and order accuracy increased from 90 percent to 97 percent. Mark Steinmetz, then SBC’s director of sales operations mechanization and an EASE project sponsor, said the system “doesn’t do away with all the work involved in our process, but it really has simplified it.”

That simplification ended up being a significant competitive edge. In opening up the telephone marketplace, the Federal Communications Commission sought to achieve parity by ordering local carriers such as SBC to share their basic operating systems with new competitors. At the time, SBC was the only local carrier to have a plug-and-play sales tool that could easily be shared with rivals. As a result, SBC in July 2000 became the second of the former Baby Bells to be granted entry into the long-distance marketplace.

When it won the award in 1999, SBC was primarily a regional telephone company catering to customers from St. Louis to San Antonio. Since then, SBC has acquired such rivals as Ameritech, Nevada Bell, Pacific Bell and SNET, effectively giving it a stranglehold on local phone service west of the Mis-sissippi. “We’re roughly three times the size we were then,” says SBC Executive Vice President and CIO Edward L. Glotzbach. To accommodate this growth, SBC depended on EASE. Among the system’s results:

With the PacBell acquisition, EASE was rolled out to 5,000 new service reps who subsequently shaved an average of 7.5 minutes off their service calls.

Since last July, when SBC was granted entry to the long-distance market, more than 1 million long-distance customers have been signed up in Texas—90 percent of them via the Easy Access Sales Environment.

“EASE has met our expectations and then some,” Glotzbach says.

Today, service reps use Enhanced EASE, a GUI-based system that is easier to use, offers more information faster and flashes fewer screens. With this second-generation system, service reps are seeing their calls shortened by an additional 3.5 minutes on average, says Steinmetz, who now serves as SBC’s executive director of mechanization strategy. “But we’re not resting,” he says. “We’re pushing toward a third generation of EASE, one that conducts CRM activities.”

Artificial intelligence software plays a huge role in this next iteration, allowing the system to recommend product suites to customers who have answered a few basic questions about their telecommunications needs. SBC has already piloted this system with some of its new-connection service reps in Texas, and early results include a 10 percent revenue increase.

Since its debut, other phone carriers have imitated EASE and created similar systems. But SBC’s version still delivers competitive edge, its sponsors say, because it was built not just to scale, but to meet the customers’ changing, ever-increasing needs. “What matters at the end of the day,” Glotzbach says, “is how you bundle your products and meet the needs of your customers as they’ve articulated them to you.”

Powrtrak Rolls On at Black & Veatch

Black & Veatch

1998 enterprise value awards winner/POWRTRAK

Then: This proprietary information system, built in-house by Black & Veatch’s IT organization, helped the global engineering company complete projects faster, cheaper and with fewer errors than its competition, accruing an ROI of roughly $21 million from 1983 to 1997.

Now: Black & Veatch has licensed Powrtrak to such companies as Taiwan Power (to the tune of $28 million in revenues), and the IT group that built it has been spun off into its own company, Black & Veatch Solutions Group.

As an engineering company, kansas city, Kan.-based Black & Veatch has always tried to stay at least one step ahead of its competition. Which is why its Powrtrak information system keeps evolving.

When first introduced in 1983, at the behest of former CEO Jim Adam (who has since retired), this construction project database ran on VAX minicomputers and did nothing but pump out raw information such as equipment and drawing lists to network clients. In 1998, when Black & Veatch won the Enterprise Value Award, Powrtrak (then in its third iteration as a client/server app) ran on a core Oracle relational database that performed eight distinct functions, including 3-D modeling and procurement control on a TCP/IP and satellite network that made information accessible to users anywhere in the world. Today, Black & Veatch engineers are at work on a fourth-generation Powrtrak, which will run entirely over the Web and be based on object-agent architecture. People are already starting to think about a fifth-generation Powrtrak that will be decision-centric (as opposed to the current data-centric) and help engineers make construction decisions, not just record them. In other words, rather than have a system that focuses on creating images of construction projects, this next-generation Powrtrak will be focused on the various decisions—pricing, supplying, securing—that are made in a construction project. “We’ll go from the reactive computing we all grew up with to proactive computing,” says Black & Veatch CTO John Voeller, who recently took on the title of chief knowledge officer.

Like Powrtrak, Black & Veatch has changed considerably since 1998. Then, the company was heavily invested in Asian projects, including the $1.8 billion Lungmen nuclear power plant project in Taiwan. Since then, the Asian market has collapsed, and Black & Veatch has retrenched in the United States, focusing on domestic projects. In 1999, the company spun off its IT group; now called Black & Veatch Solutions Group, it is an $80 million company selling IT services to Black & Veatch and other big-name clients.

As the business has changed, so has the nature of Black & Veatch’s engineers and customers. When Powrtrak was first introduced, personal computing was a new concept to many of the company’s veteran engineers, who frankly had grown up believing that data entry was secretarial work. Powrtrak had to be pushed on these people. It has been the younger, more computer-savvy engineers, who have joined the company since, who have demanded more functionality from Powrtrak. Similarly, Powrtrak used to be considered a deal-maker when prospective customers were exposed to the system’s efficiencies and cost savings. Now Powrtrak is viewed as simply part of the package. “It’s not considered unique anymore,” Voeller says. “It’s just an indigenous part of our world.”

Still, even as Powrtrak is now taken for granted, none of Black & Veatch’s competitors has stepped forward with a better engineering information system. “I’ve seen attempts, but I haven’t seen anyone come up with anything akin to Powrtrak,” Voeller says. “Most engineering companies have enough trouble just supporting their e-mail and financial systems.”

Although Black & Veatch has never stayed wedded to any one version of Powrtrak, Voeller believes the system’s core concept has been proven successful. When Black & Veatch began moving to the fourth generation of Powrtrak a couple of years ago, Voeller says, “We had the chance to completely revisit the data content of the database. After 15 years of use, we changed only 5 percent of the data. That told us that if you center a system around your data, everything else can evolve, but the basic business doesn’t change.”

As he envisions the Powrtrak of the future, Voeller knows the system will evolve in ways that can only be imagined today. “There ain’t no single right answer,” he says, “but we’ve been able to come up with a couple of pretty good answers in the past.”

HealthCare System Serves New Partners

Brigham And Women’s Hospital

1996 enterprise value awards winner/provider order entry system

Then: With 162 servers and 4,800 clients, this proprietary information system was considered the biggest health-care client/server system in the world.

Now: This same system now runs on roughly 400 servers and handles 30,000 clients.

When John Glaser is appalled, things happen. Ten years ago, as the CIO of Brigham and Women’s Hospital in Boston, Glaser described hospital leadership as “morally appalled” when they read a survey revealing that 6.5 percent of the hospital’s patients were likely to experience an adverse reaction to wrongly diagnosed medical treatment. One-third of these reactions could have been prevented. The number was consistent with health-care industry averages, but as a Harvard Medical School affiliate, Brigham and Women’s aspired to be better than average. And so Glaser worked with a team of physicians and IS staff members to develop the provider order entry system (POES), a client/server tool that reduces mistakes by flagging potentially dangerous prescription orders and redundant tests. The system increased doctors’ workloads—they had to take time to enter their orders in the system—but it dramatically reduced their errors. By 1996, on an average day, doctors were entering 4,000 medication orders in POES. Twenty-nine of those orders came back flagged for potentially bad reactions, and 320 were marked as redundant.

What types of problems does POES flag? Diagnostic tests that might mix badly with a patient’s prescribed medications, duplicate orders and tests that should be conducted on a strict schedule. The system can even remind health-care providers that recovering patients need to walk around three times a day.

Today, Brigham and Women’s is one of 10 hospitals managed by Partners HealthCare System, a Boston-based integrated health company; Glaser is Partners’ vice president and CIO. And POES remains the company’s best check and balance on doctors’ orders and patients’ treatment. “The technology is a little different,” Glaser says. (Then the system ran on DOS; today it runs on Windows NT.) “But the efficiency of orders has gone up substantially.” At Brigham and Women’s Hospital, serious medication error rates are down by 50 percent, and 3 percent of orders are changed after doctors are given POES suggestions. The architecture that supports POES hasn’t changed dramatically. When first deployed in 1993, it was considered the world’s largest health-care client/server system, with 4,800 clients and 162 servers. Today, it’s an even larger system, with 30,000 clients and 400 servers, and developers are piloting some Web-based systems for future rollouts.

What has changed dramatically as a result of POES is the makeup of Glaser’s IT organization. Ten years ago, there were no physicians in IS. But after initiating the POES project, Glaser began recruiting MDs to deepen his group’s medical knowledge. Today, four of Glaser’s senior managers are physicians. “We’ve seen an enormous revolution in telemedicine, medical imaging and electronic records,” says Glaser, who attributes the success to the collaboration between the two groups. “We have a track record and trust.”

Unfortunately for patients who are treated outside the Partners network, POES remains a proprietary system. Even though Partners licensed the rights to POES to Eclipsys Corp., a health-care technology vendor based in Delray Beach, Fla., Glaser’s own research reveals that only 5 percent of hospitals nationwide have a similar system. Why so few? “These systems are hard to implement, and they can be expensive,” Glaser says. In an era of health-care cost-cutting, IT systems are often the first to go.

Even at Partners, POES hasn’t yet spread from inpatient to outpatient services. And while the 10 hospitals are admitting 120,000 patients per year, they treat more than 2 million outpatients annually. Of these 2 million outpatients, as many as 40 to 50 per day are suffering adverse reactions to prescribed drugs. “That’s appalling,” Glaser says.

But, then, when Glaser is appalled, things happen. Stay tuned.