Case Study
IT Cost Alignment – Manufacturing and Healthcare Provider
Overview
Our client was a $110 million a year, private national medical device manufacturer and patient healthcare provider with 770 employees, 137 distribution centers and 3 warehouses in the US and manufacturing operations in China, Taiwan, Germany and the US.
Problem
- IT costs approaching 12% of sales
- Insurance and government reimbursements were declining
- 22-year-old custom built legacy EMR system incapable of handling new products
- IT staff had legacy skills and did not know the inner workings of the custom software
- Organization was shrinking but all contracts, hardware, and software were designed for a larger company.
Action
- Developed a cost reduction and operations improvement plan
- Worked with IT leaders to renegotiate all IT contracts
- Enhanced staff’s technical skills and built lite weight apps using Agile techniques
- Initiated a Strategic Outsourcing effort
- Streamlined technical footprint
- Deployed new IT policies to accommodate smaller organization
- Modernized and migrated some systems and data to the cloud to reduce costs and provide scale when needed
Outcome
- Reduced IT Annual Budget by 57% in first year
- Increased number of upgrades from bi-annual to bi-monthly
- Improved user satisfaction with new web frontend and user enhancements
- Applied approach to business supply chain, inventory, manufacturing, and facility management reducing all business costs by a total of 42% in two years