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The Business of IT
F E A T U R E  
Child Support

  November 1, 2002
  By David Joachim


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  In this article
arrow
Introduction
arrow
Plain Vanilla
arrow
Calculating Returns
arrow
'In a Cave With a Scout'
arrow
On Location, Series II
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Personnel: Susan Hancox
arrow
Personnel: Scott Ogawa
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Personnel: Daniel Nigrin
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Personnel: Kevin Murray

The strategies Children's used in its ERP rollout were based on lessons learned from the hospital's last major IT project, a collection of applications called the Integrated Clinical System (ICS) designed to keep track of patient billing and electronic medical records. The business case for buying that software called for so much customization that the product became almost unrecognizable, says Chief Technology Officer Scott Ogawa.

Project costs went over budget on that project, so the hospital had to scale it back drastically. Today, ICS handles mostly patient accounting and appointment scheduling. The hospital's conversion to electronic medical records is on hold.

Children's difficulty with ICS is a big reason the organization isn't messing too much with the PeopleSoft ERP code. The mandate is to stick with the plain vanilla, out-of-the-box functionality to minimize development and maintenance costs.

This approach has trade-offs, Ogawa acknowledges. Many users have complained that the user interface isn't intuitive, in part because version 8.0 is PeopleSoft's first ERP revision that relies on a browser rather than a full desktop client. Children's could have tried to perfect the user interface and workflow before rolling out the modules, but with that approach, "you have no return for the entire implementation cycle. It's all investment," Ogawa says. By evolving with the application while it's in production, "maybe it's not intuitive, maybe it's cumbersome, but we're running the business."


Perhaps the biggest lesson of the ICS project, Ogawa says, is that big software projects require owners who can be held accountable. "When we went live with ICS, you had all these people involved and all you saw were their palms saying, 'It wasn't me, I didn't choose this, I didn't want to go this way,' " he says.

This time, should the PeopleSoft project suffer the same fate as ICS, the fall guys are Hancox, Nigrin and Chief Financial Officer David Kirshner. Hancox and Nigrin don't even want to think about the consequences of failure. (Kirshner wouldn't comment.)

It's the first such massive project for all the principals. Hancox says she has overseen system upgrades but never for so many departments at once. What's more, the seven software developers on staff had virtually no experience with large-scale enterprise applications, so Children's had to add four more developers and bring in some 20 consultants, says lead developer Leo Judge.

It was this lack of internal experience that tilted power to PeopleSoft and Andersen.

"I think they used a bit of a scare tactic," Ogawa says, "to state, 'if you want to say your IT staff will step up to the plate and do this, we'll put a big disclaimer into the contract to say, fine, all we have to do is worry about the functional side. Your IT people will handle the technical side.'"

This was already months into the project planning--PeopleSoft knew it had won the contract, so it was holding all the cards.

Pressure Cooker

Behind the Scenes
Go behind the scenes with Children's Hospital Boston to see how its top-notch IT department conducts business amid the pressure and clamor of this fast-paced facility. You can read posts from the staffers and even ask them a question or two of your own.

Several Children's executives refer to "artificial" deadlines imposed by the CFO to meet the April 22 go-live date, which itself was produced under pressure from the hospital's executive committee, which approved the $16 million budget and wanted to see returns fast. (About $2 million is budgeted for Phase 2 of the project, which will add benefits administration, employee self-service and some module customization.)

"We were almost implementing the software before we had finalized the contracts with both PeopleSoft and Andersen," Nigrin says. "That was not a good negotiating position. Before you get people working, it's probably a good idea to decide what you're going to pay them."

Indeed, Hancox grew angry when, just a few weeks before the go-live date, she says PeopleSoft refused to sign a guarantee that its software would work as advertised. She says Children's was in no position to force the issue: "They were willing to walk away."

Jamie Wyatt, PeopleSoft's vice president of health-care solutions, says the vendor's policy is to "warrant to our published documentation." But PeopleSoft won't guarantee statements made in a demo or discussion during the sales process, he says, because "that's difficult to manage."

In a way, Children's ended up deferring to PeopleSoft and Andersen so internal stakeholders wouldn't have to take the blame if things went wrong, Ogawa says. As a result, the IT staff was left in the dark about a range of requirements, from helpdesk training to hardware sizing (see "Triage, IT Style").

IT assumed, for example, that Andersen was readying hardware recommendations, and Andersen apparently thought the same of Children's. A scramble ensued in spring 2001 when everyone realized no hardware had been ordered.

"The hardware specs were rushed because IT wasn't involved and then suddenly--bam!--they were in the hot seat," says Ogawa, who adds that Children's probably overspent on the 16 or so servers as a result. "There wasn't enough early planning about architecture."

What happened next tested the patience of the IT department, Ogawa says: The boxes sat idle for more than six months after they arrived in May 2001 because the contract with Andersen was still incomplete.

For its part, PeopleSoft says it provided Children's with written materials that spelled out hardware requirements, albeit generically. Typically, the company says, the customer consults with its preferred hardware vendor and replies to PeopleSoft, which in turn works with the hardware vendor directly to round out the specs (ideally, with customer input and oversight). After the project is fleshed out and transaction volumes are projected, PeopleSoft recommends another round of assessments to "make sure you have the horses to run the race," Wyatt says.

That final interaction never happened. "As the scope of the project changed, Children's didn't revisit the sizing," Wyatt says. "I can't be sure about what happened. Maybe Andersen was saying the initial sizing was OK. But we did offer to come in."

Ronald Goldberg, the BearingPoint managing director who supervised the Andersen team, says it was never his job to determine hardware sizing. "We gave some advice but not a recommendation," he says.

In all, Children's has experienced a "normal level of trouble," Goldberg says. "Every implementation has its share of troubles and quirks." The most important measure of success, he says, is that Children's never missed payroll and never missed payments to vendors.


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