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6 IT outsourcing lessons learned from healthcare.gov's troubled launch

Stephanie Overby | Oct. 16, 2013
The federal government's recent launch of Healthcare.gov is a stunning example of outsourced IT gone wrong. The multi-contractor project has been riddled with issues and should serve as a reminder to any IT outsourcing customer regarding steps to take to ensure a smooth rollout.

Instead, outsourcing customers should seek out service providers with experience in agile delivery methods that can serve as a catalyst for transforming delivery capabilities, says Wright of Pace Harmon, including frequent delivery of tested, working solution components and progress that can be objectively measured.

"It is important to clearly and contractually define compensation rules for outsourcers based on iterative delivery of value and through incremental release cycles," Wright says. "Companies should also carefully vet the outsourcers' understanding of the link between objective progress measures and value to the payments they will receive." Outsourcing customers should walk all providers through these rules prior to contract signing.

3. Make customer experience a priority."It's important to keep in mind the experience of the user when designing systems like the Healthcare.gov Web site," says Adam Luciano, principal analyst with sourcing analyst firm HfS Research.

"This is of paramount importance, and is something that many traditional outsourcing firms may not look at with great depth. A big takeaway from this experience is to try to simplify processes as much as possible and keep in mind the user's experience of the product," Luciano says "Healthcare is complex enough, why do these guys need to add more complexity?"

User experience should also take precedence when it comes to error handling and exception processing. Driving customer inquiries to a service desk via phone or chat is a great moneymaker for the service providers. But if lines are choked or agents don't have the proper information, the result is a horrible customer experience.

"It is much better to establish an outsourcing agreement with incentives for a service provider to deploy tools by sharing in the savings and rewarding behaviors and processes that promote and deliver increased adoption of service functions and features that measurably enhance the customer experience," says Wright of Pace Harmon.

4. Anticipate mistakes. Some insurance providers submitted incorrect information to the federal health information exchange, even posting the wrong rates for their plans. But with poor contingency planning, it's not clear how those errors will be corrected. "Now the question arises, if the error is in the subscriber's favor, will the subscriber be able to take advantage of the wrong rate? If so, who will eat the difference?" says Denis of ISG.

5. Get everyone on the same page. In a multi-sourced environment, like the federal healthcare information exchange project, it's critical to use common metrics across all provider agreements. Such "coordination indicators" encourage cooperation among all parties, says Wright.

"Adhere to common industry terminology and process definitions to the greatest extent possible to avoid incompatible service models and the possibility of critical information or transactions getting lost in translation or stuck in limbo," Wright adds.

 

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