Kaiser Permanentes Rx for Better Projects

Case Study: HMO Kaiser Permanente needed tighter alignment between its software developers and its business goals. A new requirements management system proved to be strong, but effective, medicine.

For most organizations, software development is seldom easy. Projects are often fraught with miscommunication between the information-technology department and the business units. Key requirements may get short shrift or be omitted altogether until the last minute, when both costs and tempers are likely to soar.

Now, one of the nations largest health maintenance organizations is revamping the front end of its development process to ensure a tighter alignment with its business goals. As part of a sweeping overhaul of its software development setup, Kaiser Permanente, the $31.1 billion HMO, has installed new software and processes for defining the business requirements of new systems.

About 700 of the Oakland, Calif., companys 2,000 software developers will be using the development system, which is based on a requirements definition and management package from Borland Software.

Ultimately, Kaisers initiative will tackle not only software design, testing and change management, but also how costs and project length are estimated and the process is measured.

"If there is a change in a projects scope, we want to know the impact down to the dollar," says Aaron Schleifer, project manager for requirements development management at the HMO.

The companys goal is to reduce errors and speed project development by standardizing the way the organizations developers outline corporate needs for new systems.

At Kaiser, which serves 8.4 million members through 30 medical centers staffed by 12,000 physicians, there are a few hundred development projects underway at any given time. Its no surprise, then, that the payoff of a streamlined process with fewer errors and reduced rework can be huge.

Kaiser wont say exactly how much it expects to save, but Schleifer points to an estimated reduction of 40% in project time lines, according to studies from Borland and the Software Engineering Institute. "It is obvious that the business case for a managed software life cycle will yield significant financial gain," he says.

How much is "significant"? Try eight figures. For a large organization with an information-technology budget of more than $1 billion, such as Kaiser, the savings could reach $60 million in reduced rework alone, estimates Matt Klassen, worldwide product marketing manager at Cupertino,Calif.-based Borland.

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