3
Challenges in Transforming Enterprise Technology and Data Management

To the extent that upgrades and enhancements are needed to the existing IT systems of CMS, the goal is to incorporate IT solutions that are superior to the existing systems in cost, performance, and flexibility. In terms of meeting new requirements, CMS may need to develop or implement IT solutions that enable not just technical changes but business transformation as well. The simultaneous pursuit of these goals will be complicated, particularly given the pragmatic complexities of instituting change in a system that must continue to function at scale.1 Moreover, CMS’s present business processes and systems were developed largely on a program-by-program basis rather than on an enterprise-wide basis. Nonetheless, good IT solutions can provide a basis for both IT enhancement and IT transformation.2

The demands for transformation will be ongoing. The complex constellation of legislation and regulation to which CMS must be responsive will present continuing challenges; new rules and legislation prompt frequent updates to systems and processes, and major changes and whole new programs have been called for in recent legislation. Health care reform has accelerated the pace of change, and ongoing legislative activity and the development of regulations suggest that the business requirements for CMS are unlikely to stabilize. Furthermore, a broad trend toward integrated health care will exert further pressure, pushing the entire system toward more integration and affecting the mission, products, and service delivery of CMS. As the agency's mission and service model evolve, business processes will need to change with them. A thorough understanding of future-state business processes and a disciplined way to document those processes are prerequisites to designing systems that successfully meet the multiple challenges ahead for CMS.

1

See Michael L. Brodie and Michael R. Stonebraker, Legacy Information Systems Migration: The Incremental Strategy, Morgan Kauffman Publishers, San Francisco, Calif., 1995; A. Bianchi, D. Caivano, V. Marengo, and G. Visaggio, “Iterative Reengineering of Legacy Systems,” IEEE Transactions on Software Engineering 29:225-241, 2003; and B.M.R.S. Borges, A.F. Vincent, C. Penads, and R.M. Araujo, “Introducing Business Process into Legacy Information Systems,” in LNCS—Business Process Management 2005 3649:452-457, 2005.

2

See, for example, Kate Leggett, William Band, Connie Moore, and Andrew Magarie, Extend Business Process Management to the Front Office to Transform Customer Service, Forrester Research, Cambridge, Mass., October 5, 2010.



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3 Challenges in Transforming Enterprise Technology and Data Management To the extent that upgrades and enhancements are needed to the existing IT systems of CMS, the goal is to incorporate IT solutions that are superior to the existing systems in cost, performance, and flexibility. In terms of meeting new requirements, CMS may need to develop or implement IT solutions that enable not just technical changes but business transformation as well. The simultaneous pursuit of these goals will be complicated, particularly given the pragmatic complexities of instituting change in a system that must continue to function at scale.1 Moreover, CMS’s present business processes and systems were developed largely on a program-by-program basis rather than on an enterprise-wide basis. Nonetheless, good IT solutions can provide a basis for both IT enhancement and IT transformation.2 The demands for transformation will be ongoing. The complex constellation of legislation and regulation to which CMS must be responsive will present continuing challenges; new rules and legislation prompt frequent updates to systems and processes, and major changes and whole new programs have been called for in recent legislation. Health care reform has accelerated the pace of change, and ongoing legislative activity and the development of regulations suggest that the business requirements for CMS are unlikely to stabilize. Furthermore, a broad trend toward integrated health care will exert further pressure, pushing the entire system toward more integration and affecting the mission, products, and service delivery of CMS. As the agency's mission and service model evolve, business processes will need to change with them. A thorough understanding of future-state business processes and a disciplined way to document those processes are prerequisites to designing systems that successfully meet the multiple challenges ahead for CMS. 1 See Michael L. Brodie and Michael R. Stonebraker, Legacy Information Systems Migration: The Incremental Strategy, Morgan Kauffman Publishers, San Francisco, Calif., 1995; A. Bianchi, D. Caivano, V. Marengo, and G. Visaggio, “Iterative Reengineering of Legacy Systems,” IEEE Transactions on Software Engineering 29:225-241, 2003; and B.M.R.S. Borges, A.F. Vincent, C. Penads, and R.M. Araujo, “Introducing Business Process into Legacy Information Systems,” in LNCS—Business Process Management 2005 3649:452-457, 2005. 2 See, for example, Kate Leggett, William Band, Connie Moore, and Andrew Magarie, Extend Business Process Management to the Front Office to Transform Customer Service, Forrester Research, Cambridge, Mass., October 5, 2010. 9

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Like the IT systems of many other federal agencies, those of CMS are based on legacy technologies. Systems based on such technologies and architectures can be notoriously difficult to maintain and update, may not be well positioned for interoperability, and can depend increasingly on specialized knowledge that is ever more difficult to obtain in the commercial marketplace. Although CMS’s IT systems have been remarkably effective in meeting changing requirements over the past 40 years, they were not designed for the kinds of flexibility and ease of evolution likely to be needed to support the emerging set of requirements being mandated to be carried out by CMS. More specifically, past changes to CMS systems seem typically to have been made on a project-by-project basis, as needed in response to specific new requirements and as new funds were appropriated and allocated for the implementation of particular programs. Architectures that facilitate such narrowly focused modifications to IT systems tend not to allow for re-envisioning in the face of change or the implementation of major system- wide changes. Such significant changes typically require reconceived and redesigned hardware, software, and system architectures and will encompass all aspects of system performance, including processing, storage, communication, interface, and flexibility. A major challenge that CMS faces is how to manage the combination of continually new and broadening requirements, an increasingly broad and diverse user population (including providers, beneficiaries, and other information consumers), and a correspondingly ever-more- challenging environment in which security and confidentiality must be assured. Assuming that new architectures will be needed to meet the new challenges that CMS faces, the transition to such new architectures will itself pose a formidable challenge. Specifically, there will be a need for system and software architectures that are sufficient to support existing CMS requirements, flexible enough to support an expected range of future requirements, and robust enough to support the complex transition from the current IT infrastructure to CMS’s future IT infrastructure. In short, new requirements and demands will likely mean that CMS systems need to be modernized in various areas because CMS currently does not use at scale modern IT solutions that are available and that are likely critical to meeting its new requirements (or even to meeting current requirements at new scales). In the committee’s view, reengineering and evolution of this kind are difficult. Although it entails considerable risk, reengineering can be approached in ways that reduce risk. This reengineering might mean that certain hardware and/or software systems would need to be replaced, although mere replacement or “upgrade” is not the goal per se. Because emerging requirements place a premium on flexible approaches to collecting and assembling data across the enterprise, improvements in data management appear to be critical. CMS IT systems have historically been developed to support plan-administration and claims-processing functions and have been implemented program by program, resulting in multiple data stores. In part because of their coarse granularity and location in multiple data stores, the data available today are likely not well suited for tracking health outcomes or conducting comparative-effectiveness research, and significant effort is required to produce needed data sets. Indeed, the most successful private-sector users of IT at comparable scales reengineered their approaches to data more than a decade ago. This reengineering has made it easier for them to modify and change systems to keep up with evolutionary IT changes and new demands, and 10

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to create separate data warehouses that have been effective in managing large and diverse data sets and in supporting broad needs for information that are of a range and scale comparable to what is projected to be needed by CMS for decision support and business intelligence.3 Another factor that will need to be incorporated into CMS’s transformational efforts is the need for experimentation and pilots. Given the mandates of the Patient Protection and Affordable Care Act of 2010 and the pressing need to “bend the cost curve,” significant experimentation with various approaches to developing an efficient, integrated health care ecosystem will be needed. CMS will play a central role here, and it will need to balance its efforts in this area with the need to keep existing programs running smoothly. In general, incorporating flexibility into system and software architectures in the face of change will be critical, as any system developed now is likely to face even more changes in the future. Learning from other large-scale enterprises that have transitioned to new business models will be critical. The rapid change in the political and policy dialogues means that requirements for future CMS systems are not yet known or stable. And yet system and transformation efforts will have to be undertaken despite that uncertainty. Proceeding in such a way inevitably increases risks with regard to meeting requirements, or risks of outright failure as in the case of past procurements by a number of federal agencies as well as by organizations in the private sector. In short, CMS needs to leverage proven IT approaches and solutions that are most likely to be able to cope with ongoing significant advances in IT generally and with rapid evolution in health care IT and policy. 3 Many large e-commerce providers, such as Amazon.com and Hewlett Packard, among others, use this model. (See, for example, Stavros Harizopoulos, Daniel J. Abadi, Samuel Madden, and Michael Stonebraker, “OLTP Through the Looking Glass, and What We Found There,” Proceedings of the 2008 ACM SIGMOD International Conference on Management of Data, Association for Computing Machinery, New York, 2008; and Surajit Chaudhuri and Umeshwar Dayal, “An Overview of Data Warehousing and OLAP Technology,” SIGMOD Record 26(1):65-74, March 1997.) 11