Scott Blanchette got a big nod from fellow IT professionals this spring, when he won the prestigious 2013 CIO Leadership Award at the 10th annual MIT Sloan CIO Symposium. The award recognized Blanchette, senior vice president of IT services at Nashville-based Vanguard Health Systems, for delivering business value and for innovative use of IT. Blanchette's undertakings include joining with other Vanguard Health executives in 2012 to found Hangar9 Solutions, an IT services company that provides infrastructure and computing services to small and midsize healthcare organizations, including Vanguard.
The criteria for winning the CIO Leadership Award include the ability to demonstrate the value of IT services to the people who pay for them. How do you do that? Transparency, and certainly transparency of pricing for services delivered. There's also an imperative to provide a context through benchmarking and other forms of analysis to help educate consumers on what they're receiving at what price points and how that compares to what they can acquire in the open market. There was a clothier when I was a kid, Sy Syms, who said, "An educated consumer is our best customer." I spend a lot of time driving toward that same goal in IT.
Has any Vanguard business unit looked elsewhere for IT services? Yes, and we encourage that sort of exploration because, as a service provider, if I'm not able to provide a service of value at a price point they believe reasonable, I don't want to hold them hostage. We think we're always going to be the most competitive alternative, especially when it comes to alignment with the business and its objectives and strategies.
Has anyone ever gone with an external provider? No, not for our core services.
How do you educate yourself about what the business needs? Unlike a third-party service provider, we're all incentivized around the organization's [financial performance]. So while we run independent or interdependent units, we operate under a singular umbrella organization. The other piece is we're keenly focused on the unique attributes of our different operating units, some of which are hospitals, some of which are clinics, some of which are health plans. We have a diverse portfolio of assets, and we understand them better than others.
How do you improve IT's understanding of the business units? We're fairly central to the strategy development process. We're definitely involved from the beginning in articulating the strategy and the desired outcomes. We're involved in the implementation of services and solutions that help achieve them. And we're part of the rationalization process in the end, when we evaluate our successes and failures as a business and not just a service provider. Being part of that entire continuum is extremely valuable. I think we have a very prominent seat at the table.
How do you make yourself a trusted partner? Delivering exceptional results is central to being a credible partner. You have to understand the business, the opportunities for technology to influence or impact the successes of the business. You have to be sound at executing and delivering results, and you have to have the other tenets you expect -- vision, inspiration and perspiration. But fundamentally it's about ensuring exceptional delivery of positive business results.
What are your biggest technology initiatives at the moment? Initiatives to help drive business growth. We've invested in consumer-directed analytics and a consumer relationship management solution that few others have in healthcare, so CRM and growth-related initiatives are by far our most prominent focal point. The second is around usability and mobility of our systems -- the consumerization of IT, with a keen focus on usability and mobility.
And what's your biggest challenge? The macroeconomic headwinds in the healthcare industry are very challenging in calendar year 2013. It certainly impacts growth, and it just influences the overall general outlook for the industry and that creates a lot of focus and discipline that we really need to be successful during a transition into healthcare reform.
What does that mean for your IT organization? Probably one of the prominent examples would be a focus on rates of return on invested capital. And ensuring that we are only making high-value investments that create some form of quantifiable returns -- either financial or clinical, or hopefully both. And being exceedingly disciplined about that is critical.
You're also founder and president of Hangar9. How has that experience shaped you as a CIO? It's less critical how it's shaped me than it is how we're shaping the organization. We wanted to implement a professional services culture here and emulate the professional services relationship wherein our customers could go buy from any other respectable supplier that's frequently absent from internal IT departments.
What characteristics are typically absent? Establishing some boundaries around a scope of service, agreeing on service levels, and establishing service-level agreements and providing pricing transparency for the scope of services. And the benchmarking piece is valuable for furthering the trust relationship.