Solution: Complete ERP overhaul using Oracle including finance, supply chain and procurement and HR systems
Benefit: Better integration across systems, modern industry-standard practices in place providing opportunities for staff to be able to deliver improved process performance
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Public Sector organizations' IT systems can be a thorny issue to address, often large, complex and limited by legacy issues, they usually function in a best-effort manner that leaves users pining for something better. And often if they work, they are best left untouched.
In the case of the , its Chief Executive and key leaders in Finance and IT decided to take the bull by its horns and replace core systems in a complete overhaul of finance, procurement and HR.
"The previous system was simply antiquated and needed replacing," said Nancy Tse, CFO at the Hospital Authority. "The old systems were fragmented, increasingly difficult to manage and problematic in getting quality information flow."
The process actually began in 2005 when the Chief Executive at that time decided a high priority had to be placed on upgrading the core non-clinical systems at HA. This in itself was a bold move as medical systems that directly relate to patient care typically receive the greater priority. But with the help of who worked with HA to form a strong business case, the project was approved with funding supported by the government.
The HA currently manages a head office, 41 public hospitals and institutions, 47 specialist outpatient clinics and 74 general outpatient clinics. It employs 59,000 full-time equivalent staff and for 2011 to 2012 the HA's recurrent expenditure budget, net of income, was HK$36 billion.
According to Phil Lansley, chief manager (Non-Clinical Systems) who project-managed the implementation at the Hospital Authority, the team went on a global search for possible systems and examples of projects to learn from.
At that time HA had adopted a policy of using packaged software systems for all non-clinical operations and its search ended with the selection of Oracle for the three key modules to be implemented.
Based on an assessment of risks the project was carried out in phases. From 2007 the supply chain and financial modules were implemented in three stages over a 28 month period culminating in the HA Head Office and all seven hospital clusters being placed on the new systems by April 2009. Meanwhile the HR system was implemented in a "big-bang" approach going live in August 2010--as analysis showed that it would be more complex and risky to have the legacy system and new system running at the same time.
"Given the scale and complexity of HA operations and the multiple levels of staff, the project proved challenging," noted Lansley. Oracle also remarked that the HR implementation was among one of the largest single "big bang" HR projects in Asia given the extensive requirements for all 59,000 staff members.
The technology implementation itself was complex, but the management of change proved to be a very difficult proposition to overcome.
"It's always the people that require the most attention with projects like this," said Tse. "Managing expectations was critical so we had to present this as an opportunity for users to make a change."
Helen Wong, the chief manager of Financial Operations and Systems Development, who also played a key role in the implementation, noted how staff will typically recoil in fear when changes are proposed to their workflow and processes but the change in system necessitated the engagement of users to ensure the new system could meet their key requirements.
Tse noted that communications with staff had to be very clear in order to manage expectations. "With a new technology it's easy to offer them a perfect 'rose garden' but to reach there takes time," she said. "Users had to realize we couldn't give them everything at once and they needed reminding what the core goals of the project were to ensure the requirements were realistic." These goals included: Improving information flow between all procurement, finance and HR systems; enabling modernization of key processes; improved efficiency within the HR payroll function; and to ensure an effective system of internal control continued to be in place.
Lansley admitted that being able to roll out everything and have all systems live with no major outage or service disruption was an immensely satisfying and proud moment for all staff involved.
Simply being able to pay the 59,000 staff correctly on the first pay-run under the new system was a major success. Given the size and nature of HA's complex pay structure, this is considered by both the HA and Oracle as the landmark achievement of the project. It has also given the HA an opportunity to redesign and standardize key elements such as the chart of accounts, item catalogues, internal controls and delegation limits. It provides a single source of truth for operational data such as vendor, stock items, inventory, fixed assets, payments, staff, and budgets. Budgets are now managed and aligned at corporate and cluster levels with on-line fund checking for all non-payroll related expenditures as part of the standard process.
Procurement has benefited from the delegation framework that provides automated workflow for procurement approvals with pre-assigned authorities while electronic purchase orders and invoices for payment improve processing efficiency and accuracy.
In rolling out the ERP modules, HA has acquired 14 high-end Unix servers and three new storage servers with 80 TB in capacity. was the provider of the key software as well as being the main systems integrator.
The teamwork that was achieved in pulling this project together was a massive achievement and standout factor in the success of this project," said Lansley.
He noted that at times getting consensus and moving collectively towards the goals was a difficult process. Given that the Project Steering Committee, chaired by the HA's Chief Executive coordinated with leadership teams across HA's seven hospital clusters, there were multiple views and opinions to consider.
Wong, who was heavily involved in collaborating across clusters added: "Imagine the numerous town hall meetings and workshops with up to 100 users, all with strong opinions--through continuous liaison and collaboration, compromised agreements were eventually reached".
The massive organizational change effort should not be underestimated. Change agents assigned to the project communicated through a dedicated web site and scheduled newsletters to over 59,000 staff. Training efforts resulted in over 10,000 procurement front-line users including nurses and purchasing officers being able to successfully use the new application, 600 human resource personnel trained to support the wider HA community, and 500 finance staff across the clusters trained in the new chart of accounts and finance functions.
Most importantly, the implementation has broken down organizational boundaries and has helped promote a cross-functional, multi-disciplinary team spirit that is filtering across the HA, observed Lansley.