IBM Anounces Certification in Cloud Computing .. Huh?

IBM first announced a competency center in Cloud Computing, then a Certification over the past couple of weeks.  Well, I guess the old Druid Priests of Mainframes should recognize the resurrection of their old God TimeSharing.  Here we are, back and rested from the Breast of Gaia, Greener than Green (Drum Roll Please…….): Cloud Computing!  (Cloud Computing quickly adjusts his costume makeover to hide Ye Olde TimeSharing’s wrinkled roots)  Yes! here I am fresh, new, exciting, Web 2.0, Chrome Ready!  With me are the only guys (Big Smile from IBM!) who can Certify and Consult in My Mysteries…. IBM!

The more things change the more they stay the same, but this pushes the Great Hype Engine to a new high (or low..ha ha ha).  I can understand IBM wanting to jump on the Cloud Computing bandwagon, but are we really ready for a certification?  No one is really sure what is in the Cloud, or how it operates, but IBM is ready to lock it and load it.  Yep, they are Certifiable! (ha ha ha!).  While one can admire the desire to define and take a stand on Cloud Computing; this is one topic that requires a bit more “cook time” before full scale avarice takes hold.

Cloud Computing to too “cloudy” and “amorphous” to define today.  While expertise and advice is required, there needs to be more independent vetting and best-of-breed component level competitions.  Full solution demo platforms need to be put together to elicit ideas and act as pilots.  Case studies need to spring from these efforts as well as early adopters before an organization bets the farm on a Cloud solution.  The existing ERP platforms did not come into being overnight and these solutions have an element of their interdepency and complexity (Rome was not built in a day!).  All of the elements of backup, disaster recoverability, auditability, service level assurance, and security need to be in place before there can be a total buy in to the platform.  The reputation of Cloud Computing does hang in the balance, all that is required is one high visibility failure to set things back for potentially years (especially given the current macro environment).

Above all at this stage, a certain level of independence is required for evaluation and construction of possible solutions.  Evolution mandates independent competition (Nature Red of Tooth and Claw, Cage Fighting, Yes!).  Maturity brings vendor ecosystems and the all consuming Application Stack, but not yet.  More innovation is required, we may not even have heard of the start-up who could win this game.

Building a Collaborative Enterprise: Twitter (Part 2)

This is the second post in a series of posts covering collaborative tools that can make an impact on your business. If you’re new to Twitter, I’d suggest you read part 1 first.

Why Twitter?: Internal Collaboration

Honestly, many of the very creative ways Twitter can be used as a real-time communication platform probably haven’t been invented yet. Here are some creative ideas we came up with using an internal poll on our Sharepoint site:

• Server or systems uptime monitoring and alerts (tying into Twitters excellent SMS capability with major cell phone carriers)
• Corporate workflow integration and notifications – new business notification / blasts, integration with development workflow, etc.
• Events planning and communication – for companies that sponsor annual users’ group meetings, setting up a dedicated Twitter account to communicate details and updates to attendees

Enterprise Use

Especially for large companies, something like Twitter can even take the place of other solutions (such as Office Communications Server), or (as in many companies I’ve seen) public IM services such as Yahoo or AOL. IM services that function outside the company may present serious security risks, including exposure to vicious worms or malware.

Companies such as Yammer and Present.ly are springing up, providing Twitter-like services running for private intra-company enterprise use. These provide the benefits of Twitter, including collaboration and greater dissemination of information, while retaining privacy that enterprises mandate.

While the market for corporate Twitter-like products is still in flux, examining the options available should be an important part of your enterprise collaboration strategy. With recent management changes at Twitter, it is highly likely that Twitter will be introducing a for-pay Enterprise service in the near future. Twitter CEO Evan Williams recently stated that

There is commercial value, not just personal value [to Twitter]

Integration

Twitter provides a very rich series of web services that can be used to integrate Twitter accounts with many existing back-office systems – both for receiving incoming tweets (imagine your Twitter feed integrated with salesforce.com, for example), and for outgoing tweets (imagine integrating QuickBase or Microsoft Dynamics to drive marketing campaigns). The Twitter web services can easily be integrated into existing Java, .NET, or Ruby on Rails infrastructure.

Downsides

Because Twitter is a realtime mass communication mechanism, gaffes can hurt you very quickly, since bad or inappropriate twitstream content will assuredly ripple through the as Internet fast as possible. Additionally, Twitter serves as a very rapid sounding board for poorly vetted social media ideas by aggregating feedback from thousands of users or consumers.

A very recent example of this from November 15-16, 2008 was the very strong consumer backlash to Motrin’s new advertising campaign. Immediately after the advertising campaign was released, negative comments on Twitter began piling up, causing Motrin to decide to pull the ad from its online media campaign.

On many corporate blogs, and certainly traditional “press release” communications outlets, content is reviewed, re-reviewed, and approved many times over before being released for public consumption. Part of a corporate Twitter strategy should include a good understanding (and documentation) of rules of engagement and proper Twitter etiquette, since a traditional review process would be cumbersome and reduce the “immediateness” of responses.

Name Squatting

With the uptick in corporate attention being paid to Twitter, “Twitter squatting” is starting to be noticed by corporations. Much as “domain squatting” happened in the early days of the Internet, Twitter squatting could be potentially either damaging or expensive for companies that don’t own their name. Twitter doesn’t yet have an official policy of releasing names to trademark holders (unlike, for example, domain squatting); however, they will release “inactive” accounts, and I’d bet they will have a policy on this issue very soon.

Should You Twitter?

In the current highly-connected and collaborative business climate, companies must have a social media strategy. Companies must understand all of the major social media platforms and identify how they will bring value to the business.

Twitter has provided a unique service, and many companies, especially ones that deal with B2C services, should consider a strong Twitter presence.

Next in our series of blog entries covering collaborative enterprises: Facebook.

Designed to Sell, Corporate Edition

When contemplating which business units or product lines to put up for sale in today’s challenging market, it might be wise to borrow some tactics from  the real estate market. It really comes down to three important guiding principles in planning a divestiture as part of your deleveraging strategy:

1. Know your market – cultivate target buyers to avoid a fire sale. Identify players looking for complementiarity in products, services or customer base.

2. Model the outcome on your going-forward financials – freeing up cash may be top of mind for everyone, but we all need to think past the current crisis and understand what the impact will be on sales and profitability going forward. If you don’t have a business intelligence toolset in place already, you may have difficulty in achieving the type of agile scenario modelling that is necessary here. Infoworld is reporting BI as a key spending area in the recession, specifically for determining profitability.

3. Know where to invest, or “design to sell.” – there may be secondary benefits, above and beyond a divestiture’s products, services, and customer base. Specifically in the technology architecture, especially if the business unit is on its own (instead of shared corporate) platforms. Ancient mainframe technology is like the walnut panelling and avocado shag carpeting lurking in the basement. Customized applications with their big in-house support teams are like the pink stucco patio and poolhouse a proud homeowner showcases, causing the buyer to race down the road to the next listing. Call in the design team, these could be good spots to begin a corporate makeover, as they are very likely to increase the value of the sale.

On the flip side, things like collaboration tools and  business process management suites are like the well-appointed master suites and media rooms that can help a buyer warm up to the sale. In addition to things like a lean operating architecture, these technologies help make a divestiture an attractive asset for buyers looking to build out a platform company.

Is this the end of M&A as we know it?

Part of me says, “Oh please, let’s hope so!” — for more than a decade we’ve heard constant complaints about deals that don’t reach their full potential, and watched the same sort of mistakes being made over and over:

• the hoped-for synergies that are never really defined
• the integration or transition plan that’s 3000 lines long but gives no one a clue about where the effort actually stands
• no coordination of business and technology plans during integration or transition
• the blanket assumption that a move of the acquiree’s business to the acquirer’s systems and processes are always the right choice

There’s no doubt about it—deal volume and total deal value is down year over year from 2007. Credit market woes are pushing buyers to move away from senior debt toward riskier mezzanine capital. Common sense would tell you that if you’re taking on more risk, you’d better be vetting out risks earlier in the deal timeline, yes? Valuations are coming into line due to market conditions, so there’s not so much need to use due diligence to position for negotiating advantage during valuation discussions (but hey, it never hurts to strengthen your position during negotiations, right?) But, given the additional risk you’re taking on with the mezz financing, you’d better have a clear idea about what your IT spend needs to be in year 1. Pre-close is the time to ferret out those orphaned releases, costly overly-customized environments and low-productivity in-house custom IT development shops. Find them, redefine them, and build a tight cost model so you don’t take on any more risky debt than necessary.

Gloom and doom, we can’t shake it these days—it feels a little like we’re living through Ragnarok or at least Fimbulvetr, the winter of winters that precedes that Destruction of the Powers, doesn’t it? Many assets are being put on the block these days as part of a vast global deleveraging battle. Who couldn’t use a few valkyries on the team, to help choose among these slain assets the most worthy and heroic and carry them off to the Valhalla of value creation?

Difficult days for all of us, these. Let’s remember the great Norse legend does end on an up-note, though — after the great battle, the world resurfaces anew, fertile, with a bright future. Even in these uncertain times, there’s much you can do to either position the assets you plan to put on the block, or to prepare for the success of future acquisitions. More about both topics in future posts.

The Fog Has Engulfed Us Captain! What Do We Do?

The current business environment reminds me of being socked in a fog bank in minutes, after being on a pleasant summer sail.  The entire episode puts the pucker factor meter in the red zone.  One minute clear sun and nice breeze, the next you can’t see your hand in front of your face.  Your other senses become more acute  — suddenly you hear the splash of the waves on the rocks you cannot see (funny I didn’t hear that a minute ago).  The engines of power boats are closer, seeming to come at your every quarter (PT109 how bad can it be?).

As you sit in the cockpit with your canned air fog horn and US Coast Guard approved paddle, you think that the portable marine radio you bought will not save your sorry carcass (at least you can get the Coast Guard to retrieve your drowned body as you go down).  You kick yourself for not buying that radar instead of the case of wine as a boating accessory (in fact, you think of downing some of that right now to ease your passing).  What you would not give for just a little visibility.

That’s what running a business feels like right now (makes you want to puke doesn’t it, what fun).  My Kingdom for some Visibility!  Sure, you can see what the others are doing; cut a few heads there, shut a facility there.  Is that the right thing to do?  Are you killing your future seed corn or bailing the water which will sink the company?  Ugh!  In this case, you really wish your company’s reporting could be that radar to tell where and where not to go (sure wish I got that CPM Package rather than that Sales meeting in Napa Valley).  With dashboards, planning and budgeting, consolidation, and operational BI, I would have a much better sense of what to feed and what to kill to take advantage of my competitors coming out of this economic fog (Aye Captain! in the Bay of the Blind the One Eyed Man is Admiral!).  Wishing and regrets won’t get you much, and capital investment at this point seems to be a dirty word (Yep, there it is on George Carlin’s list).

In the case of my sailing experience, the way I dug out of the fog and fear was to dig out the depth finder the former owner left behind and the charts I bought because it seemed like a good idea at the time.  I then proceeded to steer the sailboat in circles matching the readings on the depth finder with the depth readings on the chart based on my dead reckoning of my location (you reckon wrong, you’re dead).  Needless to say it worked, the fog cleared, and I was within a quarter mile of where I should have been (Cool!).  Just straightening out existing corporate reports and cleaning existing data is the equivalent of using the depth finder and charts already on hand (Yes! I know the difference between capital and expense).  In fact, that effort usually saves money by eliminating old unused reports (Oh, I feel so green!).

In any case, take a solid first step by getting those state-of-the-art visibility tools of BI/CPM/EPM when the current problems clear or things become so dire as to require dry dock repairs.  That way, the pucker meter won’t be buried in the red the next time this happens, and it will.

Image courtesy of Herbert Knosowski, AP

Web 2.0 for Insurance Questions and Answers

I wanted to follow-up the IsoTech08 conference and the talk I delivered there on Web 2.0 and Insurance with answers to a few questions that came from the audience.

The full presentation slides are posted on slideshare:

Web 2.0 in the Insurance Organization

View SlideShare presentation or Upload your own. (tags: agent_collaboration agent_engagement)

Questions and Answers:

Q: the new trends in the innovative use of the web seem to give direct insurers an advantage over indirect ones, as they focus a much larger portion of their resources in direct to consumer services and marketing. How can traditional agent centric companies compete?

A: Do you remember the end of real estate agents? When Your Home Direct launched with a website and a 2% commission structure everyone mourned agent based companies. It appeared that agents do provide value and the 2% became 3%, then 4% and now chapter 11. Remax is still going strong…

Agents provide a personal relationship and value that is appreciated by many customers. Companies can empower these agents with the latest tools and technologies that will allow them to provide their customers with the best user experience and convenience that will provide the best of both worlds.

The direct providers like Geico, provide tools but no context or tailoring to the client specific needs. Agents should be provided with a white label set of tools (tools that the Insurer provides but can be customized with the branding, contacts and products that a specific agent provides). When providing a quote, it is not a printed document but a link to a personalized client site with all the details of the quote listed and the ability for the client to make changes and see options. Agents can communicate through messages or live chat and provide all the options and discounts.

The Customer gets a completely customized experience guided by a trusted agent.

Insurers that will empower their agents with tools like these will not have a problem to compete successfully.

Q: It was mentioned that one of the largest hurdles in the successful implementation of social and collaboration tools inside the enterprise is lack of critical mass of users. How can we ensure that we reach the critical mass and what will drive adoption?

A: It is true that for any community to be lively and for any communication tool to be effective it needs to reach a sufficient number of people. There are few ways to help that happen:

• Cultivate the core user group. The ratio is usually 1:9. For every one contributor you have 10 readers and commenters. The contributors form the heart of the community and need to be encouraged and rewarded
• Put collaboration tasks within the line of business. Collaboration and social tools are often considered “above the line” or things you do above and beyond your regular work. If an organization can find ways to put the use of these tools in the regular course of doing business, their usage will become just part of doing your job. Examples can include posting files and not emailing them, soliciting feedback through a forum, not in an email etc.
• Make it the social norm. if key activities happen there, and key executive post and conduct business in the internal social network, it will become the place to be. People will start asking each other if they saw a specific thread or comments and will drive up adoption.

Q: Can you provide an example where Mashups provide a solution that can not be addressed using other existing Portal, BI ,EAI and Dashboard tools?

A: As with any new technology, people are justifiably concerned that the hype is exaggerated and that it is just a fancy term for well implemented dashboards. The new class of tools called Mashup engines try to solve some of the fundamental problems of integrating data from multiple sources and providing it in a visual interface without the need to go though the extensive and expensive effort of actually integrating the applications and their data. By leveraging web services standards, each source of data or data driven service can be assembled quickly and provide unique insights and different way to look at data that was very difficult until now. Here are a few scenarios:

• Dynamic view of the customer. We often talk about a 360 view of the customer with all their claims, policies, history, and in multiple lines of business. A customer mashup can take a customer record as a baseline and pull together a combination of structured and unstructured data with visual rendering. For example, if the client is company X, the company view can include:
  • Company information and price stock
  • Map of company locations
  • List of latest news from news services about the company
  • List of SEC filings
  • Existing policies with their value and renewal dates
  • List of open and recent claims
  • List of recent service calls

  The data comes from multiple sources and can quickly change but the dynamic nature of the mashup, allows sources to be added or removed quickly and for different data to load based on retrieved parameters

Image taken from: http://www.andybudd.com/presentations/dcontruct05/images/zen2.jpg on April 21, 2008.

Building a Collaborative Enterprise: Twitter (Part 1)

This is the first in a series of blog posts focusing on ways to integrate specific collaborative technology platforms into your enterprise.

We’ll do this by examining cutting-edge companies who have embraced collaborative technology, and provide some suggestions as to how these technologies might be applicable in different industries.

If you’re new to collaboration in the enterprise, we suggest you read this post by Edgewater’s Ori Fishler, reviewing McKinsey’s research on “enterprise 2.0″ collaborative technologies.

What is Twitter?

Twitter is a public, free microblogging service. It allows users to publish short — 140 characters or less — updates to anyone who chooses to listen (the Twitter term is “follow”). Here’s a video to explain more succinctly (and humorously!) than I can:

Chances are, your company already has a public corporate blog presence (a recent study says over 55% of companies do). Your corporate blog is probably much like ours, providing insights, expertise, and guidance to your customers and potential customers. Blogs are generally written in an expository, formal style, providing rich and deep content, and an ability to converse through comments.

Contrast this with Twitter, where the 140 character limit profoundly restrains the amount of detailed dialog your can provide to (and have with) your followers. Companies like Southwest Airlines, Dell Computer, and Comcast have embraced this communication mechanism. The Wall Street Journal recently declared that Twitter is going mainstream. Why?

Why Twitter?: External Collaboration

While much of the focus around Twitter has been on enhancing interpersonal relationships, Twitter serves a unique niche for enterprises that early adopters can take advantage of. It is very difficult (or expensive) to get as close to your customers as Twitter allows through other means.

Areas such as customer relationship management, engagement, and marketing strategy are well-served by the opportunity provided through Twitter.

Brand Monitoring

Much like traditional media outlet monitoring, companies are advised to set up a strategy for watching Twitter for tweets about them.

Since Twitter is often a channel for stream-of-consciousness writing, mentions of companies are often interrelated with visceral experiences, both positive and negative. Delving into the subconscious is a savvy marketer’s dream come true!

A nascent industry has appeared with all sorts of tools to monitor companies’ mentions on Twitter, allowing them to be aware of what people are thinking. Smart companies such as Southwest and Zappos have taken this monitoring a step further, to an intervention approach.

“Today, whatever you say inside of a company will end up on a blog.” — Rusty Rueff

Much like blog/website watching services (such as Google Alerts), tweets regarding layoffs, client information, and other sensitive data must be carefully monitored so that information leaks can be identified before they lead to serious consequences (data or confidentiality breaches at worst, PR nightmares at best) for the company.

Customer Service

Twitter allows for a uniquely personal approach to customer service, providing customers with a way to bypass your standard support structure and (at least have the appearance of) talking to a real, live person. Unlike standard support or CRM systems, however, by default all Twitter conversations are public.

This openness allows a company that is willing to invest in well-trained and highly disciplined customer-focused service to shine in a way that was impossible before Twitter. Your concern for, and engagement on, customer issues will be visible for the whole world to see.

Many companies using Twitter for customer service make wise use of the Twitter direct messaging feature to bifurcate between directing responses containing personal information privately to the requester, while directing less sensitive responses as general replies for the public to see.

Marketing

While the ability to drive a rich marketing campaign through Twitter is limited to 140 characters, it’s possible that, by building a robust following through the techniques previously mentioned, you can deliver a strong message to your company’s followers, who are also likely to be your most ardent supporters.

Zappos created great, low-cost buzz when they randomly selected 10 of their 1,000+ followers to receive free pairs of shoes – brilliant marketing strategy targeted at their most loyal fans. Dell Computer Corporation regularly distributes exclusive coupon offers to their followers.

Sales

While there aren’t a lot of good examples of deals being brokered via Twitter, a couple bigger companies are experimenting and have shown marked success.

An Irish insurance company, FBD Insurance, has begun using Twitter to provide auto insurance quotes and other product information to potential customers.

Dell Computer Corporation launched its @DellOutlet Twitter account in June 2007. By the time 1 year had passed, Dell could trace over $500,000 in sales to links clicked through its twitstream.

To be Continued…

In our next post on Twitter, we’ll cover enterprise options, other creative uses, and potential downsides.

Related Links

• Twitter How-To, by Adam Covati

Legacy Modernization: Don’t forge a Jackson Pollock

Well here I am again and “here he goes”, I hear you say as you brace yourself for some off the wall tenuous link. Well this time it is even more fun: Jackson Pollock, creator of No. 5, the world’s most expensive piece of art is back alive and kicking creating wonderful deployment diagrams at an enterprise near you.

Don’t believe me? Quick have a little play with this great web app and see if you can create the chart that you already have in Visio; you may be surprised.  That’s right, just move the mouse around and off you go, you are an online abstract artist or an individual with a serious issue – an ever evolving and morphing enterprise that seems to simply grow.

Alright, let us get serious here for a second.

Over the past decade or even decades we have heard from all the brightest and smartest in the world that Legacy applications were dead, your mainframe was going to keel over and draw its last breath and there was nothing you could do about it but go buy the latest technology and sunset. How did that work out?  Oh yeah, what happened was we all went around adding more and more applications to our architecture without the real stability or payback to ever do the sunset.

Well done to the brightest and smartest, not only was their advice totally wrong and unfounded it came with a heavy price tag: an enterprise more convoluted and costly to run than before with so many places for change that time to market, the holy grail, became longer and more cumbersome.

I have ranted enough……for now.

So what can we do? Well the answer comes with integration, it comes with technology and innovation – I know I know, I said we tried the latest technology and it failed – but we are not talking about wholesale replacement, we are talking about the use of technology to remove the need to sunset – ah ha!!!

Sure there are applications that make sense to re-platform or re-write; if your app changes heavily and would be better served with the ability to extend and integrate readily then yes, let’s take that Cobol app and create the wiz-bang .Net app. However, there are many others where it makes more sense to simply integrate – why try to port a 20 year old admin system that runs perfectly fine? Why not take 5 or 6 of them and represent them on the web with one integrated, low maintenance front end? Can it be done? Of course it can, it was just we were blinkered by the “sunsetters” and I do not mean late afternoon autumn drinks on the porch, which would be a good thing right now.

So what about Mr. Pollock? Expensive art, expensive deployment model……let’s go with Single View – the minimalist approach…..plus it is a lot easier to explain to guests you have over.

Image courtesy of the National Portrait Gallery (http://www.npg.si.edu/)

ICD-10: Apocalypse or Advantage?

With humanity coming up fast on 2012, the media is counting down to this mysterious — some even call it apocalyptic — date that ancient Mayan societies were anticipating thousands of years ago.  However, the really interesting date in healthcare will happen one year earlier. In 2011, per the mandate of Senate Bill 628, the United States will move from the ICD-9 coding system to ICD-10, a much more complex scheme of classifying diseases that reflects recent advances in disease detection and treatment via biomedical informatics, genetic research and international data-sharing. For healthcare payers and providers that have used the ICD-9 coding system for submitting and paying healthcare claims for the last 30 years, it could be apocalyptic without proper planning and execution.  Conservative estimates of the cost of switching to ICD-10 are 1.5 to 3 billion dollars to the healthcare industry as a whole and nearly $70,000 for each doctor’s practice.

Since 1900, regulators of the U.S. health care system have endeavored to give care providers a systematic way to classify diseases so that care processes could be standardized and appropriate payments made. Like many of the world’s developed health care systems, the United States follows the World Health Organization’s (WHO) International Statistical Classification of Diseases and Related Health Problems (ICD) code standard that is typically used internationally to classify morbidity and mortality data for vital health statistics tracking and in the U.S. for health insurance claim reimbursement. In 2011, technically, healthcare providers and payers will be moving from ICD-9-CM to ICD-10-CM and ICD-10-PCS.  To meet this federal mandate, it will be essential that information systems used by U.S. health plans, physicians and hospitals, ambulatory providers and allied health professionals also become ICD-10 compliant. The scale of this effort for healthcare IT professionals could rival the Y2K problem and needs immediate planning.

The challenge is that the U.S. adoption of ICD-10 will undoubtedly require a major overhaul of the nation’s medical coding system because the current ICD-9 codes are deeply imbedded as part of the coding, reporting and reimbursement analysis performed today. In everyday terms, the ICD-9 codes were placed in the middle of a room and healthcare IT systems were built around them. It will require a massive wave of system reviews, new medical coding or extensive updates to existing software, and changes to many system interfaces. Because of the complex structure of ICD-10 codes, implementing and testing the changes in Electronic Medical Records (EMRs), billing systems, reporting packages, decision and analytical systems will require more effort than simply testing data fields – it will involve installing new code sets, training coders, re-mapping interfaces and recreating reports/extracts used by all constituents who access diagnosis codes. In short, ICD-10 implementation has the potential to be so invasive that it could touch nearly all operational systems and procedures of the core payer administration process and the provider revenue cycle.

A small percentage of healthcare organizations, maybe 10 to 15 percent, will use ICD-10 compliance as a way to gain competitive advantage – to further their market agendas, business models and clinical capabilities. By making use of the new code set, these innovators will seek to derive strategic value from the remediation effort instead of procrastinating or trying to avoid the costs. An example will be healthcare plans that seek to manage costs at a more granular level and implement pay for performance programs for their healthcare providers. In addition, ICD-10 offers an opportunity to develop new business partnerships, create new care procedures, and change their business models to grow overall revenue streams. Healthcare organizations looking for these new business opportunities will employ ICD-10 as a marketing differentiator to create a more competitive market position.

There are three key areas for healthcare organizations wanting to convert regulatory compliance into strategic advantage with ICD-10 remediation:

1. Information and Data Opportunities – Healthcare entities that are early adopters of ICD-10 will be in a position to partner with their peers and constituents to improve data capture, cleansing and analytics. This could lead to the development of advanced analytical capabilities such as physician score cards, insightful drug and pharmaceutical research, and improved disease and medical management support programs, all of which create competitive advantage.
2. Personal Health Records Opportunities – Using ICD-10 codes, innovative healthcare entities will have access to information at a level of detail never before available, making regional and personal health records (PHRs) more achievable for the provider and member communities. Organizations that align themselves appropriately can provide a service that will differentiate them in the marketplace.
3. Clinical Documentation Excellence Program – Developing and implementing a Clinical Documentation Excellence (CDE) program is a critical component of organizational preparedness to respond to future regulatory changes because there could be an ICD-11 on the horizon.

Healthcare organizations need to understand the financial impact that ICD-10 will have on their bottom line and begin the operational readiness assessments, gap analyses and process improvement plans to facilitate accurate and appropriate reimbursement. Without action, a healthcare organization can expect to endure “data fog” as the industry moves through the transition from one code set to another. Now is the time to choose to gain the advantage or procrastinate on the coming code apocalypse.

Keys to Successful Divestitures

There’s no doubt about it. A well-crafted TSA (Transition Services Agreement) can make or break a divestiture. In a recent review, Deloitte describes some of the key elements of making a fast break. Shrinking the interval between Day 1 (Financial Close) and Day 2 (Full Separation) is a priority goal of a successful transition. To achieve a short timeline, it’s crucial that IT decisions be made as soon as possible, even before Day Zero (the day the deal is publically announced).

While the Deloitte approach provides a reasonable framework, I think we can add some additional perspective based on our own experience in this area.

1. The acquiring company or PE firm should recognize the fact that the IT resources within the business unit to be carved out are not likely to possess the strategic vision and leadership to create a target architecture and craft an accelerated transition plan.

2. The internal transition team needs skilled coaching and leadership to effectively “turn the tables” on the former parent organization. Think  about it: the IT resources you are bringing over with the divestiture have been taking orders from corporate IT. During the transition they must quickly change the dynamic of power and manage their former bosses as service providers.

3. SLAs are important. The Deloitte article minimizes the need for formal SLAs, but it only stands to reason that service requests from divested assets will fall to the bottom of the priority list when there are more pressing internal service requests.

4. Make sure that the agreement specifies the level of involvement from the parent organization’s resources and access to data and information that you can expect during the transition.

5. Don’t pay for what you don’t need, and scrutinize TSA cost drivers diligently. For example, if the parent organization is making an allocation to maintain a highly customized, automated environment that you will not fully use during the transition period, you should negotiate for discounted fees for that particular TSA area.

6. Manage expectations within the carved out business appropriately. Sometimes a little more chaos and pain in the short term is worth it to achieve full separation and transition to a more efficient operating platform.

Experience, negotiation, coaching, strategic vision are all key elements of a successful transition team leader. If you can’t find the right combination of skills within the acquired asset, it’s well worth it to bring in an expert to lead the team during the short but intense transition team.