By Raj Elangovan, Associate Director, Oracle Solutions Practice, Cognizant
Waves of consolidation are sweeping the healthcare industry, as companies seek to embrace new value-based care models, improve patient outcomes, drive economies of scale, develop sustainable cost structures, and thrive in an increasingly competitive industry.
EmblemHealth, based in New York City, is no exception. The non-profit healthcare insurance company with $10 billion in revenue has been driving growth and value with strategic acquisitions and affiliations with regional healthcare providers and payers.
Integrating big organizations in any industry can be a tough assignment. In the case of EmblemHealth, the combined entity had to navigate a complex patchwork of legacy enterprise systems, most of them running on highly customized on-premise systems. Although EmblemHealth and its subsidiaries and affiliates were officially “merged,” key corporate systems like finance, HR and supply chain were still running on different platforms. There were different sources of data and therefore no single source of truth.
As a result, EmblemHealth and its subsidiaries and affiliates were challenged to work in unison. Managers did procurement and invoicing in one system, and account reconciliation, book balancing, and budgeting on another. There was no easy way to get a 360-degree view of an employee. And getting reports and analytics for the company as a whole was difficult. To add to the complexity, the company’s core finance system—an early version of PeopleSoft—badly needed an upgrade.
All of this made our job at Cognizant more complex. A long-time partner of EmblemHealth, Cognizant is responsible for running a vast majority of the company’s business systems. Looking at EmblemHealth’s post-merger situation, we evaluated whether to pursue a series of complex upgrades and integrations or execute a bigger transformation—namely, moving the organization’s entire infrastructure and its enterprise applications to Oracle Cloud.
The bolder proposal made more sense; consolidating systems in the cloud could enable significant cost savings and open a range of opportunities for transforming the organization and creating new value for members. In the process, we could refresh EmblemHealth’s technology stack and move to a truly future-proof cloud.
The Cognizant team started the transformation by helping EmblemHealth update its financial chart of accounts and core work structures. These would be shared by all three businesses and eliminate disconnected business workflows. Getting the company’s work structures and chart of accounts set up right would be key to the success of the whole project, and the basis for consolidating a range of business processes across HR, finances, enterprise performance, and supply chain management.
By the end of the first phase of our project, we moved most of EmblemHealth’s enterprise operations to a single, integrated Oracle Cloud, replacing an intricate mix of legacy vendors and onsite-managed applications. In total, more than 20 Oracle Cloud modules were rolled out across the combined company.
You might think that a project this ambitious would take years to implement. Not at EmblemHealth. Early on, we made the decision to do a big bang approach, targeting go-live in just 11 months. By moving quickly and implementing solutions concurrently, stakeholders felt it would limit the transition and minimize distractions to a narrow window. Most importantly, EmblemHealth could realize business benefits that much sooner.
There were a few skeptics to win over. Some were concerned whether we could do the necessary application and vendor integrations and user testing in so short a time. We did a lot of upfront work convincing the senior executives of the plan’s feasibility, conducted multiple architectural reviews, and made sure our teams were executing on each part of the implementation in parallel. You could say we divided and conquered.
Do we recommend a big bang implementation for all enterprise cloud transformations? Not always. But for companies like EmblemHealth that operate within a single legislative framework and use the same currency, the advantage of a doing it all at once presents a favorable risk-reward proposition. It certainly made sense for EmblemHealth, and the results speak for themselves.
Today, EmblemHealth is simplifying and standardizing all of its legal entities on a single cloud that leverages a full suite of Oracle products—ranging from human capital management, talent acquisition, ERP and enterprise performance management, to supply chain management, analytics, and more. It was a groundbreaking project, with EmblemHealth becoming the first healthcare payer anywhere to implement the full range of Oracle Cloud solutions as part of a single big bang transformation.
Although it’s early in its transformation, EmblemHealth is primed to see tangible improvements. Its financial processes, for example, are becoming increasingly automated and efficient as all three organizations move to a common financial platform and adopt industry best practices for tasks such as expense approval, procurement, and budgeting. In HR, everything from compensation cycles to goal-setting are becoming standardized.
The company now has a unified reporting platform along with powerful capabilities for drilling down into the finest details of its operations. And it has replaced disjointed workflows with seamless, end-to-end processes—from requisition to journal entry, for example. The budget allocation process has become more efficient on the new cloud system, accelerating the monthly close cycle by more than a day.
EmblemHealth businesses expect to see savings from consolidating business processes—possibly adding up to as much as $700,000 per year or more—in addition to 30-35 percent IT savings in the next five years. Meanwhile, our teams at Cognizant are continuing to collaborate with EmblemHealth to fine tune new cloud-enabled capabilities, such as automated invoice processing using optical character recognition technology. Our shared goal is to eventually reduce manual processing by as much as 60 percent or more, generating more savings and speeding the vendor payments process.
Ultimately, EmblemHealth hopes that by consolidating in the cloud, it will not only save money but be able to leverage the savings and efficiencies to help improve the health of its 3.1 million members. If it succeeds in doing that, then its transformation will be more than worth it.
Want to learn more about EmblemHealth’s big bang consolidation? If you’re coming to Modern Business Experience in Las Vegas next week, we’d love for you to join us at our March 21 session, "EmblemHealth’s Journey to Value and Innovation," or visit with Cognizant at the event.