Big Bang Renovations Aren’t All They’ve Cracked Up to be – and Here’s Why.

Big Bang Renovations Aren’t All They’ve Cracked Up to be – and Here’s Why.
Many global healthcare organizations are rejecting the “big bang,” “rip and replace” strategy of the past and are instead opting for strategies that create innovative capabilities for short money in short timeframes relative to anything we have seen in the past.

Over the past few months, several leading consulting firms have released their predictions and trends to watch in 2015. One common trend I’ve noticed is that nearly everyone is reporting an uptick in significant projects to revolutionize the core capabilities of the back office.

Underneath that headline in healthcare is a new approach to core modernization focused strategic transformation that enables product and service innovation at the speed and cost profile of consumer product companies. Many global healthcare organizations are rejecting the “big bang,” “rip and replace” strategy of the past and are instead opting for strategies that create innovative capabilities for short money in short timeframes relative to anything we have seen in the past. Industry lore on replacement of core systems is that they cost nearly $150 per insured member to replace and that it takes four years to migrate business to a new platform. A 1-million member organization is very unlikely to have the staff or funds for this kind of initiative. If they do, by the time the project is over, business models will have substantially changed. A big-bang renovation can never keep up with today’s pace of change.

CIOs are replacing legacy core “back-office” applications with strategic applications that enable new business models and enable business to migrate to new platforms. They are creating outcome-driven technology platforms that are no longer locked into corporate systems. Business partners, employees, and even consumers provide systems and computing power to drive the enterprise. Strategic applications – those applications that meet both core functional requirements and provide a platform for innovation and differentiation – provide the needed balance of content depth, risk transfer, time to value, and innovation are needed for the transition of healthcare systems. This kind of platform can be implemented to deliver value with focus of both time and budget. Strategic applications for sales and enrollment, customer service, and operations enable the healthcare ecosystem to deliver on the promise of personalized care at affordable prices.

Now that is a revolution!