IT organizations in diversified companies-particularly those grown through acquisition-wage a seemingly endless battle against unnecessary IT diversity and related costs. Conceived, planned and executed in 18 months, UnitedHealth Group's (UHG) Hercules program proves the complexity can be conquered, while protecting or improving IT's service levels. By creating a standard desktop configuration and consistent management processes, Hercules reduced total cost of ownership to US$76 per month per desktop, from over $240.
The Situation: UHG has grown tremendously through acquisitions. A barometer of the related IT challenges faced: The number of desktops grew from 24,000 to 90,000 in four years, leading to an unsustainable and unsatisfactory level of IT cost, complexity and service.
What They Did: In 2004, with the CEO's support, Alistair Jacques, then SVP of UHG-IT, launched Hercules, focusing it on standardizing and streamlining the processes behind desktop management: procurement, configuration, installation, life cycle and asset management. In addition to this focus on process, two techniques stand out as key to the program's success. Working with finance, IT developed a chargeback model that imposes a premium on nonstandardized desktop configurations: $170 per month versus $45 per month for a standard configuration. This value price encourages business managers to choose the more efficient infrastructure. UHG also reduced costly on-site support by reorganizing it: A central IT team manages high-level support activities, completing 95 percent remotely, while select, on-site end users (often non-IT administrative staff trained by IT) provide basic support to colleagues.
Why It Was Unique: UHG-IT treated desktop management as a business process challenge rather than a technology issue. This approach freed them to employ tactics like non-IT staff for desktop support and value pricing.
The Takeaway: To date, UHG has converted 75,000 out of 90,000 devices to the new standards, delivering $42 million in annual savings. Effectively, UHG can now manage nearly four times the number of end users with the same number of IT personnel as in 2004. All while actually improving-not diminishing-service levels: IT now deploys 99.4 percent of releases, updates and patches in three hours, instead of 65 percent in three weeks.
Rick Swanborg is president of ICEX and a professor at Boston University. A full case study can be found at www.icex.com.
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