Industry Research
Publication Date: 3 March 2011
ID Number: G00211103
Baylor Health Care System Offers Strong Example of a
PMO's Ability to Help Health Systems Manage High IT
Demand
Vi Shaffer
The Baylor Health Care System (Baylor) has enhanced its approach to IT project and
portfolio management, strengthening governance and helping address the muchincreased demand for IT across the enterprise.
Key Findings
While IT governance and priorities must be driven from the top, decision processes must
be clear and involve key stakeholders and users across the enterprise.
IT governance structures must have reviews at all levels, horizontally and vertically,
within the organization.
Accurate project-related data collection and reporting greatly improve the ability to
estimate and align resources, and track progress.
Baylor benefited from creating ways that project managers can share and reflect on
experiences, loop techniques and lessons learned into other projects, and recommend
systemic improvements.
Providing project management skills and process training to the IT department and the
entire organization has enhanced staff knowledge and improved the ability of business
and clinical staff to work with IT on key initiatives.
Improving internal IT project and portfolio management (PPM) processes alone will not
ensure the success of IT projects. In Baylor's case, the CIO also helped orchestrate a
more consistent approach across its hospitals for evaluating proposed projects.
Recommendations
Focusing CIO efforts to create an effective project management office (PMO) is well
worth the time.
Assess the maturity of strategic planning, governance and project/portfolio management
at least annually.
CIOs should lead IT and enterprise change management efforts to increase PMO and
project prioritization effectiveness over time.
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Run all IT-enabled initiatives through a prioritization and scoping process, but scale that
effort differently based on each project's size, complexity, magnitude of required culture
change and risk.
Educate IT's customers on project management techniques to improve understanding
and communications throughout the governance and delivery process.
Educate vendors on key governance/project processes to help them adhere to the
processes.
Publication Date: 3 March 2011/ID Number: G00211103
© 2011 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
Page 2 of 13
TABLE OF CONTENTS
What You Need to Know .............................................................................................................. 4
Analysis ....................................................................................................................................... 4
Introduction...................................................................................................................... 4
Establishing a New PMO Approach.................................................................................. 4
The Challenge ..................................................................................................... 4
Executing a Multifaceted Plan.............................................................................. 5
Key Steps ........................................................................................................... 6
Results .......................................................................................................................... 10
Critical Success Factors................................................................................................. 10
Lessons Learned ........................................................................................................... 11
PMO Next Steps ............................................................................................................ 12
Recommendations ......................................................................................................... 12
Recommended Reading ............................................................................................................. 12
LIST OF FIGURES
Figure 1. Five Progressive Levels of the PPM Maturity Model ....................................................... 5
Figure 2. Baylor EPMS Within the CIO's Organization .................................................................. 7
Figure 3. Baylor EPMS Organization/Functions ............................................................................ 8
Figure 4. Baylor Information Services Project Governance Overview ............................................ 9
Publication Date: 3 March 2011/ID Number: G00211103
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Page 3 of 13
WHAT YOU NEED TO KNOW
Healthcare's urgent interest in leveraging IT to support and transform patient care quality and
effectiveness demands that healthcare delivery organizations (HDOs) take an enterprise
approach to prioritizing and managing IT projects. The lessons learned from Baylor Healthcare
System's successful approach can be applied by other large private health systems and
government-run shared IT services organizations.
ANALYSIS
Introduction
The Baylor Health Care System is a nonprofit organization that consists of 26 acute care
hospitals in the Dallas-Fort Worth area of Texas. Like many HDOs, the organization has grown
rapidly through a blend of mergers/acquisitions and organic expansion, and operates nearly
3,000 beds with 2,886 physicians on staff and 18,000 employees. The system's total operating
revenue in 2010 was $3.8 billion.
Baylor's IT department has 500 employees, and provides maintenance support for most clinical
and business applications for 14 of its hospitals. Like most HDOs, its major applications are
provided by outside vendors.
Veteran CIO David Muntz became senior vice president and CIO in late 2006, after a brief period
of outsourced management of IT. Early on, Muntz saw the need to strengthen project
management-related functions and brought in several IT veterans who had worked with him
previously. This included Jonathan Overton, who became corporate director of enterprise project
management and quality services. Muntz, Overton, Jill Reeves, manager — project managers,
and Nayan Patel, manager — portfolio management, each contributed to this research.
Establishing a New PMO Approach
The Challenge
The challenge for Baylor's team was to establish a functional enterprise PMO, despite cultural
barriers and prior struggles.
With its rapid expansion — and despite having made enterprisewide decisions around major
applications — Baylor's hospitals operated largely as independent business units. Each had its
own executive structure, each provided funding for its clinical applications, and each related to
the centralized enterprise IT department as discrete customers. Siloed operating departments
had their own well-intentioned IT initiatives as well. Limited coordination among the business
units constrained the organization's ability to leverage or reuse in-common work efforts or to
prioritize. Consequently, the IT department was too often caught in an inefficient "squeaky wheel
gets the grease" syndrome.
Something had to change. Early in his tenure, CIO Muntz laid out the challenge of developing and
deploying a new project and portfolio management initiative. The goal was an IT department that
would oversee all IT project activities, be accepted by the operating business units, create a more
effective approach to planning new IT initiatives and strengthen Baylor's existing talent pool of
project managers. To concentrate the effort, Muntz set an aggressive 12-month time frame to get
it done.
Prior to Muntz's tenure, an outside consultant/outsourcing company briefly managed IT and
developed a project methodology that was very robust, covering all the elements of the process.
Publication Date: 3 March 2011/ID Number: G00211103
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It was good in theory, but failed in execution. It was far more complex than Baylor's readiness for
adoption, as well as project managers' own skills and knowledge. It "looked wonderful on the wall
but was not applied," Overton said.
Gartner's PPM Maturity Model (see Figure 1) has five levels, moving from the least mature —
Level 1 (Reactive) — to the rarely achieved Level 5 (Effective Innovation). This research
concentrates on Level 1 and details the characteristics of this "reactive" stage to help PPM
leaders determine how and when it is appropriate to move up to the next level of maturity. We
should comment that we rarely see organizations stay at Level 1 indefinitely. The cost in terms of
human effort to produce results is generally so high that it proves unsustainable. On the other
hand, when an organization is growing rapidly and in the midst of some significant change, there
rarely is time to invest in anything besides survival. This concept of being buffeted by external
forces and needing to react rather than being merely complacent and/or unenlightened (a
concept some other maturity models seem to hint at) is why we have chosen to designate this
level as reactive.
Figure 1. Five Progressive Levels of the PPM Maturity Model
Source: Gartner (March 2011)
Executing a Multifaceted Plan
To create an effective overall IT demand and supply management process, the IT leadership
settled on a multipronged approach focused on internal IT people, as well as processes and
changes to governance and decision making across Baylor's hospitals.
PMO success requires a focus on three interlocking components:
The enterprise processes for IT project prioritization and support must be formalized
The IT department must focus on strengthening the department's core project scoping
and management competencies
Publication Date: 3 March 2011/ID Number: G00211103
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The intersection of IT and business/clinical management must be equally well-defined,
developed and understood
For Baylor, specific touchpoints were identified to define:
How should the project portfolio interface with strategic planning and budgeting?
What are the best available techniques for improving IT project accountability and
measuring the business value of the portfolio?
How should we best manage the IT-related portfolio of investments beyond their initial
project focus?
How can we establish common project scoring and prioritization criteria across the
enterprise operating units?
What governance and processes for prioritization of project portfolio should be
developed, given the federated business-unit way the hospitals operate?
Key Steps
Early on, IT PPM leaders conducted interviews with directors in the IS department as well as IT
customers in significant business and clinical application areas (e.g., laboratory, radiology and
critical clinical care service areas) to explore pain points, and determine what project-related
services were and would be of value. As a result of feedback and analysis, and to support the
touchpoints, Baylor's key steps for advancing PMO maturity included:
Integrate project portfolio management into enterprise management processes.
With individual hospitals constantly upgrading various business and clinical systems,
there was a clear need for a uniform governance mechanism to get processes aligned
and integrated. The CIO put in place a new enterprise IS governance council, which
involved all the enterprise "C" levels except the CEO. This included the COO, CFO,
chief nursing officer (CNO), chief medical officer (CMO), chief medical informatics officer
(CMIO), CIO and two additional vice presidents from IS. In addition, governance
councils were created at each hospital and corporate function to manage the intake of
projects as well as prioritize them. These councils were chartered to lead efforts in
meeting Joint Commission standards for IT.
Relaunch the enterprise PMO concept under a new "brand" name, including a
reintroduced communications strategy. While the PMO approach is a logical idea to
bring more order and governance to IT-related initiatives, previous attempts to bring a
more-unified approach to fruition under the outsourcer and prior management had run
into obstacles and gotten a bad reputation. This was partly because the enterprise was
not quite ready for a less-federated approach, and partly due to some mismatch of
personnel and process complexity. So, the team felt it was useful to emphasize that this
was a new approach and a major cultural shift that would require handling multiple
aspects of change management simultaneously.
A related important step was to establish a high level of visibility, and to create an identity
that was separate and apart from the earlier attempt. The initiative, which had the full
support of the CIO, was rebranded as the Enterprise Project Management Services (EPMS)
organization even though it was not yet operating at a truly enterprise level. All references
(e.g., graphics and forms) to the old PMO were replaced.
Finalize the EPMS management, roles and staffing to ensure accountability and
continuous improvement. EPMS now has a director (Overton) and two managers (see
Publication Date: 3 March 2011/ID Number: G00211103
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Figure 2 and Figure 3). One manager supervises a nine-person project manager (PM)
staff, a solid team that crosses all the main project domains. The staff includes PMs who
understand new construction and infrastructure, PMs that are strong in applications, and
PMs experienced in both. The team doesn't just work on projects; it also works on
templates and developing/applying best practices. There is a second PM with a fourperson staff for portfolio management functions — including PPM governance and
Planview tool support, two system administrators, a coordinator to receive new requests
and put together agendas/meeting schedules for governance activities, and one full-time
equivalent assigned to data quality/data mining.
Figure 2. Baylor EPMS Within the CIO's Organization
Source: Gartner (March 2011)
Publication Date: 3 March 2011/ID Number: G00211103
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Figure 3. Baylor EPMS Organization/Functions
Source: Gartner (March 2011)
Improve IT project accountability and scoping through data capture and reporting
A second objective was to move project management to a higher level of performance.
IT wanted to ensure strong accountability among project managers and teams as well
as improved scoping of project resources and timelines. The team and its customers
needed better, more-consistent data on what was actually going on, and an effective
reporting mechanism. To set the stage for process changes and improvements, the
EPMS mandated time reporting and set up guidelines for weekly project status updates.
The EPMS had inherited a Planview tool (see "Magic Quadrant for IT Project and Portfolio
Management") but needed to make it more user-friendly. The team first reviewed how the
existing tool was being used, searching for elements and requirements that were common to
all or most projects. Rather than redesigning the tool and getting into heavy-duty
reprogramming, the team simply prefilled any fields that were being ignored or that were
producing confusing and/or unneeded information with a "do not use" default. Later, as the
EPMS matured, new fields were added to gather specific information. Results from the new
fields are reviewed after six months of being introduced to see if they are providing usable
information; those that are not are eliminated. PMs for individual initiatives were not initially
required to use the tool; they could continue to use their own tools of choice for day-to-day
operations. However, over time, all high-level information was captured in Planview.
These proved to be challenging steps, because the culture was not accustomed to this kind
of systemwide accountability. It took six to nine months before time reporting was generally
accepted and capturing the hours of individuals within the department.
Establish a project data stream, and then communicate it consistently and
effectively. IT prepared a Monday morning report conveying the status and progress of
all projects, and a little additional information about each one. This was not designed to
be a major, in-depth effort, but to start keeping all stakeholders up to date in the same
way. The report grandfathered existing, ongoing projects and represented a major
cultural shift because it established an enterprise approach to accountability.
Establish overall project governance. Establishing and gaining acceptance for the
overall project governance system involved setting up a portfolio team consisting of
Publication Date: 3 March 2011/ID Number: G00211103
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managers, technical specialists and analysts, and establishing key committees (see
Figure 4):
The Information Management Communications Council (IMCC)
The Information Services Communication Council (ISCC)
The Information Services Governance Committee (ISGC)
Note: Baylor had a capital committee in place that all projects had to pass through if the
requested capital was greater than $1 million.
The EPMS established a regular Thursday morning meeting with the ISCC. Over time, a
schedule was worked out in which project requests needed to be submitted to the EPMS by
Tuesday afternoon to allow time to work up an agenda and send it out to directors on
Tuesday evening. This gave directors a full day to read the agenda and check with anyone
necessary before the Thursday meeting. A benefit is that this process would reveal sharing
or reuse opportunities.
While the governance process (as shown in Figure 2) shows five approval gates, the ISCC
deliberately began with only two gates to defuse concern that the EPMS initiative was overly
complicating the process. Later, as the EPMS gained acceptance, it expanded the process
steps. This avoided some of the push-back that IT often encounters in these efforts. The two
gates were also at the beginning of the project process, which created a blind spot for all
projects after the initiation phase. The new process now covers the project from inception to
completion.
Figure 4. Baylor Information Services Project Governance Overview
Source: Gartner (March 2011)
Establish information management councils at each hospital. To further enhance
involvement and reduce siloing of IT priorities, Baylor created an information
management (IM) council at each hospital. The president at each facility assigns
members to the council. A key entity executive-level employee serves on each council,
together with decision makers for all the service lines (service line directors operate at
the hospital level), and there is a decision process: Should we proceed with this? Baylor
Publication Date: 3 March 2011/ID Number: G00211103
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Information Services provides each facility with an IS liaison that participates in
decisions for the hospitals.
Results
The goal of establishing a higher-performing PMO and related processes accepted across the
health system was met. The EPMS now oversees, tracks and maintains progress and
accountabilities reporting for more than 170 active IT projects in any given month, encompassing
nearly all IT project activities from large to small.
Baylor was able to leverage its new hospital and enterprise project planning processes to
rationalize its electronic health record (EHR) solution projects from dozens of discrete initiatives
down to two (essentially one hospital and one physician practice initiative), with greater ability to
leverage system configuration and content standardization. This is proving critical to timely
achievement of the U.S. government's EHR "Meaningful Use" criteria.
However, the overarching result was a reliable structure and process toward project
accountability and regular performance improvement. As a result, Baylor is in an improved
position to address the escalating demand for IT services, increase the odds of achieving ontime, on-budget project delivery, and better leverage IT to improve care quality and effectiveness.
Critical Success Factors
Continuing executive support was the most important element for the EPMS effort. Many
individuals who are not familiar with IT management look at project management as
"administrivia," and will push back when asked to supply information. In Baylor's case,
the CIO personally took the lead role as organization change and process champion
with leaders and key stakeholders. The CIO needs to be influential in meetings with
other executives, continue to socialize the process, and bring up enterprise and project
issues that need to be addressed promptly at the top. The project tool is now applied
beyond IT to other strategic initiatives, with support from the portfolio management side
of the EPMS.
A second element of success was the delivery of training and education classes to IT
and all staff about project management and the new EPMS role and process. This has
enhanced project management skills and improved the knowledge and ability of
business and clinical leaders, as well as staff, to work with the EPMS processes and IT
overall.
A third ingredient was structuring EPMS operations so that continuous improvement is
part of its formal responsibilities. Baylor's project management peer group (Project
Advisory Committee) meets once a month specifically to discuss the challenges in
managing projects, and to review methodology and templates, along with tools such as
Planview. This gives the PMs a feeling of empowerment, and provides a forum in which
to discuss issues to address and learn of solutions a colleague has applied or come up
with. This has enabled the expansion of the project tool to non-IT strategic initiatives and
quality in healthcare improvement projects. One person on the portfolio team serves as
liaison to all the executives, capturing information and running reports.
Fourth, all levels of management, PMs and others in IT need to have the opportunity for
input. They must have a voice, though — of course — not everyone's ideas can be
adopted. At Baylor, everyone must follow the EPMS methodology, not just PMs. It also
meant that the training and education were significant to ensuring that roles,
responsibilities and processes were understood.
Publication Date: 3 March 2011/ID Number: G00211103
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Fifth, in looking at PM matches with new initiatives, the EPMS has developed a solid
team that includes two PMs skilled specifically in new construction and infrastructure,
two skilled in application deployment, and two skilled in "everything." Also, PMs don't
just work on projects; they also work on templates and methodology changes. There is
also a project administration and support team under the portfolio manager — one
coordinator who receives new requests and puts together agendas, and a person that is
responsible for data quality/data mining. In addition, Baylor has 64 other staff with PM
roles who are not nested within the EPMS — hence, the importance of the Project
Advisory Council.
EPMS also provides and continues to train Baylor personnel in project management.
Lessons Learned
Because, in Baylor's case, strong PMs were already in place, hiring strong PM-specific
management — combined with investment in processes and tools — was the right
method for improvement. Some health systems are at a more basic level, where
recruiting or strengthening project management talent may need to be the first step.
Establishing a PMO and initiating efforts such as standardized time and project data
collection are change management efforts. They require enough staff to train and
support associates while they learn new processes, and understand the "why" and
"what" of change and items like how to enter the data properly.
Make analysis of successes and failures a regular part of operations; provide time and
resources for improvement, not just for the project.
Data collecting and reporting are key. Therefore, they cannot be overly complicated.
Keep data collection straightforward and as close to foolproof as possible. Keep forms
and templates user-friendly and unambiguous. Monitor all entry fields to ensure they are
producing valid and useful information.
Keep information in reports visually appealing. Make them eye-catching and readable in
10 to 15 seconds.
Be sure to have a tool that is capable of handling finance and resource demand
management. Overly simple tools won't offer adequate functionality.
Educate PMs and team members on how the information will be used. This yields
greater acceptance, timeliness, and appreciation of the importance in the accuracy of
the information.
When an enterprise determines it needs to step back and create an implementable, but
more limited approach to PPM to accommodate the varying knowledge and experience
levels of project management staff, this can frustrate the most experienced PMs. It can
feel like they're going backward. Overton's recommendation is to coach senior staff to
bring them into the fold: "Since you know how this all works, how are you going to help
the organization get to your level?"
The CIO must regularly advise top executive leadership as to the kind of decision
making and process changes that are required to keep IT priorities aligned with
business strategy and ensure timely execution and efficient use of resources.
Publication Date: 3 March 2011/ID Number: G00211103
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PMO Next Steps
There are several areas management would like to focus on to further strengthen the EPM:
Taking on more of the details of resource scheduling. Baylor believes it does a good job
on the key elements, but it doesn't yet build the full schedule for resource demand
management.
Building a knowledgebase to help in looking at the business needs and business value
of new projects.
Creating a project management dashboard where the PM could pull up all the
information, and IT's customers would also have full access.
Enhancing the quality metrics; EPMS management believes the project "health checks"
are good, but could be even better.
Recommendations
Focused CIO efforts to create an effective PMO are well worth the time.
Assess the maturity of strategic planning, governance and project/portfolio management
at least annually. Gartner's PPM Maturity Model and maturity assessment tools provide
a means for classifying and targeting improvement efforts.
CIOs should lead both IT and enterprise change efforts to increase PMO and project
prioritization effectiveness over time.
Run all IT-enabled initiatives through a prioritization and scoping process, but scale that
effort differently based on each project's size, complexity, magnitude of required culture
change and risk.
Educate IT's customers on project management techniques to improve understanding
and communications throughout the governance and delivery process.
Educate vendors on key governance/project processes to help them adhere to the
processes.
RECOMMENDED READING
Some documents may not be available as part of your current Gartner subscription.
"First 100 Days: IT Program and Portfolio Management Leader"
"Toolkit: Project Portfolio Management, Are You Ready?"
"Q&A: How Much Project Management Methodology Is Too Much?"
"Highlights From the Program and Portfolio Management Track and European Symposium/ITxpo
2010"
"A Benchmark of Healthcare IT Governance and Approaches for Improvement, 2008"
Publication Date: 3 March 2011/ID Number: G00211103
© 2011 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
Page 12 of 13
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