Cardinal Health Revamps IT Organization

The $75 billion-a-year health care company consolidates and restructures its 1,600-person IT operation.

InformationWeek Staff, Contributor

May 19, 2006

4 Min Read

Finally, we incorporated project-management and measurement tools. We developed our first balanced scorecard to set goals as an integrated team, measure our progress, and publish our results. Metrics are collected on operational excellence, financial performance, client focus, and leadership development. We also began to rely on proven process-improvement tools, such as project and portfolio management and IT Information Library methodologies, to integrate this new IT model.

We knew that once we were integrated, it would be essential to have a delivery model for key IT services that were common across the entire company. Without it, we couldn't measure service levels, manage the consistency of experience, or find ways to be more efficient.

To get started, we established a catalog detailing the services Enterprise IT would offer and the levels of support provided. We managed our users' expectations by setting a delivery standard, which typically equates to the number of days it would take to fulfill each request. We also defined service-level agreements for resolution of issues and for availability of critical systems.

When an internal business customer experiences a problem, a case is opened and an expectation is set for when it will be resolved. If the time is too long for the customer, we have a clear escalation process to provide quicker response. For critical systems, we developed availability targets to meet the business needs. We now measure availability from the customer's point of view.

Real Results
This common Service Delivery Model helps us benchmark protocols and work, including equipment orders, managing our help desk, tracking system availability, and even clearing viruses. We now track the work of all 1,600 IT team members to achieve consistency and deliver results, and we've established metric guidelines for them.

Through these operational excellence initiatives, we've seen dramatic results. Service delivery performance improved by 25% during the first four months, driving client satisfaction to 93%.

Fitness Takes Work

Cardinal's path to establishing its common service-delivery model:

We've reduced the number of data centers from 42 to seven, and our eventual goal is two. We've consolidated 15 disparate help desks and technical customer-support groups into one central location; this supports nearly 500,000 annual calls and cases for more than 125,000 customers, such as pharmacists and hospital administrators, as well as employees. These calls now average just 45 seconds and are resolved 79% of the time within the service center. The call-tracking tools were cut from more than 10 to one. We no longer have dozens of desktop hardware vendors and cellular providers--just a few industry leaders.

There also was a fair amount of culture change required. Business units previously had a live support team to "tap on the shoulder" when problems arose. This model was responsive, but it also was expensive, and we had no way of tracking issues to fix the root cause. Now, all service calls come in through our help desk, a major change in the way some of our clients work with us.

While we've come a long way in the past 15 months, we're not claiming victory yet. We have work to do to improve the Service Delivery Model. On the plus side, we have metrics that help us focus on where real improvement is needed. Beyond that, we've just committed to a multiyear migration to a standard, companywide ERP system from SAP; it's a key component of Cardinal Health's ongoing business transformation. We'll use Lean and Six Sigma to drive these efforts.

The IT integration, though massive, is really just a small portion of the One Cardinal Health initiative that began in 2004. Ultimately, it will result in an integrated operating company better able to serve our health care customers.

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