In-Depth

Case Study: An IT Infrastructure Overhaul

IBM last week signed a $400 million contract to design a new on-demand IT infrastructure for the University of Pittsburgh Medical Center

• By Stephen Swoyer
• 05/03/2005

Health care is big business, a point IBM Corp. drove home last week by signing a half-billion-dollar deal with the University of Pittsburgh Medical Center (UPMC) to design and implement a new on-demand IT infrastructure.

The deal, for UPMC and its regional medical centers, is projected to take eight years and be worth in excess of $400 million. It for an almost total rip-and-replace of UPMC’s existing IT infrastructure, which consists of hardware from IBM, Sun Microsystems Inc., and other vendors. UPMC plans to consolidate three aging mainframe systems on to a single zSeries mainframe, transition from Sun UltraSPARC-based Unix servers to pSeries systems running AIX, and combine 750 Windows servers into just over 300 xSeries systems.

“Some would call it a rip-and-replace, but it’s a little more elegant. First of all, we will re-platform all of our systems to IBM, and we’re a large multi-vendor shop right now,” says Paul Sikora, director of production services with UPMC. “We’re in the process right now of re-platforming PeopleSoft from Sun to IBM, but when you step back and look across a three-year period, with any of our systems, we’ll go through some type of major conversion or event in that time frame. So it’s not as extreme as that [rip-and-replace description] makes it sound.”

Why eighty-six an infrastructure in which UPMC has already invested heavily as a result of HIPAA compliance requirements? Projected ROI in the neighborhood of 15 to 20 percent, for starters, says Sikora—but there’s more to it than that. “We will get an ROI on it, but initially what we’re trying to do, this is a major upgrade of our infrastructure. We desperately want that On Demand environment. We want the stability, we want the performance, we want the adaptability, but we also believe that our operating costs will be reduced by 15 to 20 percent.”

UPMC is a large, multi-vendor shop, so there’s little chance all of its systems and applications can painlessly be moved over to new IBM hardware. “There will be notable exceptions where a system absolutely just can’t move, either because it’s too old or because the vendor just doesn’t run on that platform. We suspect there will be somewhere in the range of 15 percent that will have to stay on the legacy side."

So how did the two partners hook up? As it turns out, UPMC went through a formal selection process, but Sikora says IBM was on its short list from the start.

“We’d been through a 20-month process of selections, but we had some very favorable experiences with IBM on their enterprise server level with our E-Records System [an electronic health records system],” he explains. “We got the stability, we got the reliability they promised us, and IBM as an organization backed it every step of the way. Then, when you look at their product line and what they’re doing on the global-services capabilities, they to us appeared to be the only partner that was able to help us do this.”

The technology rip-and-replace is just part of the deal, of course. According to Nancy Landmann, director of business development and operations with UPMC, the two partners will also work together to develop a series of commercial solutions for the health care industry. More to the point, she explains, Big Blue and UPMC plan to jointly invest at least $50 million on this account—although this number could reach $200 million through the life of the contract.

Potential applications include an “Intelligent Hospital Project,” which would use wireless, RFID, and other emerging technologies to provide more effective patient care and improve communication and efficiency for hospital staff. There’s also a Safe and Lean Hospital Project, which focuses on improving operational safety and efficiency in hospital practice areas, such as emergency rooms, operating rooms, and ambulatory care.

“The idea is to create these solutions and be able to leverage them across the nation -- to be able to commercialize them,” says Landmann. “Even if you take into account the billions of dollars invested in HIPAA today, there is a considerable amount of work that still needs to be done. Medical information is even more critical to protect and maintain. It’s an ongoing process, so we’re adding another layer of interoperability, security, and privacy as we share it on a regional basis.”

Health Care Push from Big Blue

IBM has been very busy on the health care front of late.

Recently, for example, the company announced plans to design and develop a standards-based, interoperable national health care infrastructure, called the Interoperable Health Information Infrastructure (IHII).

The idea, according to IBM, is to design an infrastructure that can support collaboration across health care organizations—including not just hospitals, but also agencies, clinics, and specialty research centers—in order to improve the way in which data is exchanged or shared.

IBM plans to deploy a test configuration across sites in San Jose, Calif., Rochester, Minnesota, and Haifa, Israel. The test configuration should be live by the end of this year, officials say.