How Executives Can Chart a Path to IT Success After a Merger or Acquisition
Consolidation in the healthcare industry continues to accelerate: 115 transactions were announced in 2017, the highest number in recent history, according to consulting firm KaufmanHall. This means more healthcare IT executives are facing the data and IT challenges that arise from mergers and acquisitions (M&A).
These executives need to find a way to consolidate a complex mix of business and clinical applications such as electronic health records (EHRs), picture archiving and communication systems (PACS), on-premises infrastructure, cloud services and data backup applications. Moreover, they have to do so in a way that delivers the consolidation cost benefits the merger or acquisition was predicated on.
Further, IT teams have to do this while dealing with growing volumes and various types of data — all of which must be fully protected and stored in compliance with data privacy regulations. On top of this, they need to develop an IT environment that enables the use of artificial intelligence and other advanced technologies to activate this data for clinical decision support, population healthcare analysis, precision medicine and other strategic healthcare digital transformation initiatives.
While these challenges are significant, a strong IT M&A integration plan, in combination with a powerful data platform, can enable healthcare IT executives to chart a path to success. Such a plan should feature three phrases:
- Discovery, to inventory all the applications, infrastructure, clouds, backup systems, talent and cultural differences in the new, integrated organization
- Consolidation, in which IT leaders determine which applications, infrastructure, clouds, backup systems and vendors they will be using moving forward, and what type of team and talent they need to manage the new integrated environment
- Activation, in which IT execs ensure they have powerful platform and strong team in place to use their data for future strategic digital transformation initiatives
Successful execution will deliver an integrated IT environment that lowers costs, improves data protection, complies with data privacy regulations and sets the table for future strategic digital transformation initiatives.
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Discovery: A Window into IT, Data and Talent
During the discovery phase of the integration process, IT executives should inventory all IT systems and vendors used by the organizations involved in the merger or acquisition. Integrating two (or more) organizations’ IT systems can be a little like swimming in a pool of sharks: Before getting in the pool, you want to know how many sharks — and what type — are in there.
In conducting this inventory, it’s helpful to categorize whether the systems and vendors are legacy or in production, with the aim of moving away from legacy vendors and systems.
In addition to inventorying all of the IT systems and vendors, healthcare executives need to also categorize all the data — EHRs, PACS, email and files — generated, analyzed, managed and stored by these systems and vendors. It’s impossible to consolidate and manage the data in the combined enterprise if IT teams don’t know exactly what data they have and where it is. While this process can be difficult, today there are data platforms with powerful indexing tools that can help find and categorize this data.
Just as important as inventorying vendors and systems and categorizing data, it’s crucial to map out organizational talent. The best integration plan in the world will not succeed if the right people, with the right skills to implement the plan, are not in place. Because the integration will require a lot of work — and, likely, significant changes in technologies and processes — it will require a team that can confidently drive consolidation and transformation efforts even as obstacles arise.
It’s also important to understand the cultural differences between the organizations now coming together. There are likely to be at least some gaps or differences in culture, and it will be imperative to take a look at how best to overcome these to create a unified organization.
Consolidation: Make the Most of IT Systems and Teams
Next, IT leaders will need to determine which applications, infrastructure and other systems to keep and which to decommission, so they can consolidate systems appropriately. Minimizing the number of vendors an organization works with as well as the number of siloed systems reduces administration time and costs. Moreover, there is no point in keeping legacy systems that do not serve a purpose, other than to keep data needed for compliance purposes available; migrate the data and decommission the systems.
In addition, when it comes to EHR, data management and other systems, it often makes sense to consolidate to a single vendor to simplify administration across the enterprise and realize cost savings through deep discounts for scale. Reducing the number of systems and vendors in the integrated organization can also help address IT talent challenges. Consolidating on certain systems and vendors, as well as using cloud services and other new technologies and services, can reduce the amount of specialized IT talent needed to manage the IT environment.
However, for certain systems, particularly on-premises infrastructure and cloud services, it can be beneficial to have systems from two or more vendors in order to ensure these vendors do not become complacent. Also, in some cases, multiple vendors or types of infrastructure can help to ensure data is located in the right place. For example, even if an organization is pursuing a cloud-first strategy, sensitive data may need to be stored on-premises rather than in the cloud.
During this phase, organizations should also develop and implement data protection and retention policies for the integrated organization. Once integrated, IT teams need to ensure they can quickly recover after a disaster and are fully compliant with current regulations. Finally, having mapped out available talent, in the consolidation phase IT executives will need to finalize the new team structure and talent pool for the integrated organization.
Activation Phase: Lay the Groundwork for Future IT
In parallel to the consolidation stage, the activation phase looks ahead to create an integrated IT environment that can evolve and grow over time. In the activation phase, IT teams should review the larger goals of the organization, especially those specific to the healthcare environment, and consider what strategic digital transformation initiatives — clinical decision support, population healthcare analysis, precision medicine — will realize those goals. In other words, during the activation phase, organizations want to make sure they are consolidating systems in a way that will not just “keep the lights on” today, but set the stage for future initiatives as well.
Key considerations for the activation phase include looking at whether, after the consolidation, an organization will have (or be able to add) the applications, infrastructure and data management platform necessary for strategic digital transformation initiatives. IT leaders should look particularly at whether their current data platform delivers the capabilities necessary for digital transformation. Many digital transformation initiatives — genomics, machine learning, artificial intelligence, population health management, precision medicine, advanced clinical decision support — require the collection and delivery of large amounts of clean data. The right data platform will enable IT to find this data, clean it, and move it where it needs to go to be analyzed and applied. Plus, a powerful data platform ensures these systems do not compromise data protection strategy or privacy policies.
Organizations with M&A integration plans that address the three key phases described above — discovery, consolidation and activation — and use powerful data platforms to enhance their ability to manage data during and after the integration will be well positioned to succeed. Ultimately, by charting a thoughtful path through integration, organizations will be able to reduce costs, enhance data protection, ensure compliance with data privacy regulations and implement strategic digital transformation initiatives. In doing so, the result will be a more empowered organization with a solid focus on the resources and projects that can truly improve patient outcomes.