it cost transparency with capacity optimization

© Copyright 12/18/2014 BMC Software, Inc1

Capacity Management and Cost Transparency at HCSCWhy the investment?


Rick Kickert, IT Planning Senior Manager

HCSC – Health Care Service Corporation

Cost Transparency withBMC TrueSight Capacity Optimization


Agenda

1. Introducing HCSCA few data points

2. Capacity Management and Cost Transparency at HCSCWhy the investment

3. TrueSight Capacity Optimization at HCSCLesson learned and Best Practices

4. Q&A


Introducing HCSCA few data points

• Founded in 1936 and with more than 14.5 million members, HCSC is the largest customer-owned health insurer in the United States and fourth largest overall, operating through its Blue Cross and Blue Shield® Plans in Illinois, Montana, New Mexico, Oklahoma and Texas

• We provide health coverage through our Blue Cross and Blue Shield Plans and dental, life and disability insurance through Dearborn National

• We are greater than our 21,000+ employees, 60 local offices and state-of-the-art technology, including two Tier IV data centers — the industry's highest reliability level — that provide the speed and data security to meet our customers' current and future business needs

Health Care Service Corporation

http://www.artefaqs.com/Search.php?in=1339021732

http://www.artefaqs.com/Search.php?in=1339021732

AFFORDABLE CARE ACT IS SIGNED ENROLLMENT BEGINS FOR HEALTHCARE MORE AFFORDABLE!

THE INSURANCE INDUSTRY

CHANGED…..WHY?03/23/2010 11/15/2013 TODAY

The Insurance Industry Changed... Why?

https://www.youtube.com/watch?v=sx2scvIFGjE


Our vision

Drive competitive advantage via efficiencies and cost-effectiveness through IT optimization, simplification, and agile

infrastructure & applications

“Provide the lowest cost, most accessible healthcare”


Planned Enrollment – Scenario Example

0

100

200

300

400

500

Historical

Insurance Industry Ad Campaign for change…

0

100

200

300

400

500

Historical

Projected

0

100

200

300

400

500

Projected

Actual

http://www.huffingtonpost.com/2013/11/19/insurance-company-obamacare_n_4303414.html


Planned Enrollment – Scenario Example

0

100

200

300

400

500

Projected

ActualHealthcare.gov website delayed

Constant Re-Planning to adjust for Capacity

needs


needs


needs


needs


needs


needs


needs


needs


needs


needs


Execution Focused

Outcome Focused

Mat

uri

ty

Monitoring

Component View

Business Optimizing

Service view

Performance Optimizing

Workload view

Process Optimizing

Business process viewFire Fighting

***

Outcome Focused

Goals for Capacity Management at HCSC

1. Minimize our risk to production caused by capacity related outages and plan for growth

2. Reduce resource time used to manually collect and correlate data

3. Ensure models are aligned to business expectations and give IT runway to implement changes

4. Minimize future hardware spend by maximizing the utilization of our current investments


Da

ta In

teg

ratio

n

Re

po

rtin

g

Mo

de

ling

Pla

nn

ing

A phased approach to increase maturity and scope

Component

Service

Business

Maturity

Sco

pe

Claims, Calls, Benefits,

etc...

Applications (eIVR,

Portal, etc.)

MQ, Appliance,

Middleware

HW, Network,

Mainframe

Facility Datacenter Efficiency

Starting point is always physical HW usage measurement

Two streams to increase maturity and scope:

Upwards (“classic”): accordingly to ITIL

Downwards (Green IT): to facilities and power consumption

The all-around Capacity solution

4 Step Approach

Starting Point


Phase 1: set foundation for Capacity Management

1) Collected the data about Infrastructure

2) Needed to understand the workloads

3) Align Services with the components and workloads

4) Ready for Scenario Planning!!!


Phase 2: define Cost Models

VisionDrive competitive advantage via

efficiencies and cost-effectiveness through

IT optimization, simplification, and agile

infrastructure & applications.

“Provide the lowest cost, most accessible healthcare”


Phase 3: deliver Cost Visibility

Reports that provide value to different roles:

• Project Managers can track near real-time costs

• Financial planning can use a report to track to budget

• Corporate finance can use reports to ‘shift funds’ and allocate resources


3 5 4

90

160

Infrastrucute Business Drivers Applications

100xIncrease

72xIncrease

40xIncrease

Few metrics about achieved results

3300

Improved Cost

Visibility


Lesson Learned

• Must develop ‘Buy In’ on IT Costs

• Establish Financial Accuracy

• Reporting / Cost of Service / Cost Transparency

• Demonstrate Opportunities & ROI

http://willmarre.com/blog/wp-content/uploads/2013/10/time_to_adapt.jpg

http://willmarre.com/blog/wp-content/uploads/2013/10/time_to_adapt.jpg


TrueSight Capacity Optimization at HCSC

Lesson learned and Best Practices


Lesson Learned – before you start

• Cost Transparency is key and benefits are huge - make sure the business case is well defined and understood by stakeholders and results will became actionable information

• Since Cost Transparency may provide several challenges - it is not just about implementing a solution – it is about company processes and roles

Before you start:


Lesson Learned – start with the end in mind

• Define your cost models before you decide what and how to integrate

• Make sure you can automatically maintain the mapping between the chargable items (servers/devices) and the chargeback targets (tenants/departments)

• Create your internal “how-to”documentation – again it is not just about knowing the product

Start with the end in mind


Lesson Learned – it requires an iterative process

• Keep cost models simple initially –fairness is key more than “truth” – and then make them more complex in case – this should not be a super-detailed accounting effort

• Get feedback from delivered results and observe changes in behavior – are consumption profiles changes by the cost visibility?

An iterative approach


Lesson Learned – product best practices

• Structure the domain hierarchy to reflect your service/tenant hierarchy –this will help you when defining the chargeback hierarchy

• Standardize metrics to make them ‘universal’ for all platforms – this will simplify the cost model definition

• Define your approach to cost models as soon as possible: fixed, allocation or utilization based – or a combination

Best Practices for a solid foundation


Lesson Learned – Cost Transparency is disruptive

• Cost transparency is disruptive – it may cause changes, and cascading change effect (“trophic cascade”)

http://youtu.be/ysa5OBhXz-Q

http://youtu.be/ysa5OBhXz-Q

Thank You.

[email protected]

http://www.linkedin.com/in/rickkickert/


MO

NIT

OR

ING

TO

OLS

Performance Insight

Network Servers

Databases

BMM

DynaTrace

CA Wily

NMONCMM

BMC Atrium CMDB

Quest Performance Analysis

SQL DB2 Oracle

V Center

NetQoS

Tivoli Productivity Center (TPC)

Cisco Prime

BMC TrueSightCAPACITY

OPTIMIZATION

BU

SINESS D

RIV

ERS

EdgesiteVDI Counts

Sentinel83X

Transactions

eIVR Service Calls (IBI,ICI, IMI,IPI)

CVP Call Voice

Platform

CactiVPN counts

Web Trends

Public Site Hits / Visits

RSC Hits / Visits

RSC Business Drivers

BAM RSC / Portal

Producer PortalHits / Visits

eIVR –Ingress

Gateway

Member Liability

Estimation

NetQosApplication Bandwidth

Wily Active Counts / Busy Workers: Public Site, Legacy,

RSC

Real Time Adjudication

Counts

Personnel Counts

NPI Crosswalk Service Call Counts

Webex Ports Utilization

RTIS Mainframe

Transactions

Real Time Benefits

Transactions

AceyusCVP counts

NetQoS Internet Circuit Utilization

EdgesiteAP WEB Counts

Cisco PrimeWifi

Network

ODS DMIHOnline Sales

Channel

What data we collect


Reactive (Fire Fighting)Ad Hoc, Requests (calls, emails), No Predictive Analysis, Data Gaps, No Business Data, No View of Costs

Data Management (Monitoring)Component View, Spreadsheets, Review Data as Needed, Siloed

Performance Management (Optimizing)Workload View, Data Integration, Predict Performance Issues, Trending,

Standardized Toolsets across Technologies, Understand Bottlenecks

Business Optimizing (Service View)Data Intelligence, Service Views, Scenario based Capacity Planning,

Influence usage via Cost Transparency , Service Costing

Process OptimizingBusiness Process View, Report in Business Terms,

Measure Efficiency, Cost Benefit Analysis,

Capacity Management - Maturity Levels


Understand Your Costs

MainframeLinux / AIX /

UnixWintel Storage Network

Mip Memory Memory GB / TB Ports

Understand your Consumption (Monitoring / CMDB / Bill of

Materials)

Software Costs of Operating System

Human Capital Costs of Operating System

Project Costs, Application Costs, Service Costs………


Cost Alignment

• Network• Mainframe

• Storage• Servers

CPU

Memory

Devices

Virtual Devices

Software

Disk

Virtual Tape

Tape

Labor

Replication

Ports

Labor

Plant Equipment

Power

MIPS

Software

Labor

it cost transparency with capacity optimization

Software

bmc software

affordable care act

insurance industry

data points copyright

data centers

data security

hcsc business model

data pointscapacity