Published on 02-Sep-2008
Validated on 13 May 2013
"Today most of our servers are virtual, not physical. The virtualized infrastructure flexes to meet processing peaks; the staff can respond to the demands of UPMC faster. We are more productive, more agile, and more reliable, at a lower cost point. It works well." - Paul Sikora, VP of IT Transformation, UPMC
Customer:
UPMC
Industry:
Healthcare
Deployment country:
United States
Solution:
Integrated Data Management, Business-to-Business, Business-to-Consumer, Business Performance Transformation, C-Suite Framework, Enabling Business Flexibility, Infrastructure Simplification, Networking, Operational Management, Optimizing IT
Smarter Planet:
Smarter Healthcare
Overview
Widely recognized for its innovations in patient care, research, technology and healthcare management, UPMC is an integrated global health enterprise and one of the leading nonprofit health systems in the United States. Based in western Pennsylvania, UPMC is the region’s largest employer, with 50,000 employees and nearly US$8 billion in revenue.
Business need:
UPMC sought to lower the cost and complexity of its IT infrastructure to enable the continued investment in next-generation clinical systems and to lay the foundation for the best possible patient care.
Solution:
UPMC is transforming its systems through consolidation, standardization and—most important—virtualization, which is the key building block of the dynamic infrastructure.
Benefits:
US$80 million in capital and operating cost reductions; more than 220 percent increase in processing capacity; significant reduction in IT infrastructure floor space requirements; 83 percent reduction in number of AIX® servers
Case Study
"Today most of our servers are virtual, not physical. The virtualized infrastructure flexes to meet processing peaks; the staff can respond to the demands of UPMC faster. We are more productive, more agile and more reliable, at a lower cost point. It works well.”
—Paul Sikora, VP of IT Transformation, UPMC
Widely recognized for its innovations in patient care, research, technology and healthcare management, UPMC is an integrated global health enterprise and one of the leading nonprofit health systems in the United States. Based in western Pennsylvania, UPMC is the region’s largest employer, with 50,000 employees and nearly US$8 billion in revenue.
Business Challenge
UPMC, an integrated global health enterprise, sought to lower the cost and complexity of its IT infrastructure to enable the continued investment in next-generation clinical systems and to lay the foundation for the best possible patient care.
Solution
Now in the middle of a landmark, eight-year strategic partnership with IBM, UPMC is transforming its systems through consolidation, standardization and—most important—virtualization, which is the key building block of the dynamic infrastructure. Relying on IBM products and services, the midstream effort has already resulted in the reduction of hundreds of servers across the UPMC network.
Business Benefits
- US$80 million in capital and operating cost reductions through virtualization-driven efficiencies
- More than 220 percent increase in processing capacity without an increase in support staff
- Significant reduction in IT infrastructure floor space requirements, freeing up space for revenue generating services
- 83 percent reduction in number of AIX servers
- Expected increase in average utilization per server from 3 percent to nearly 80 percent
- Faster integration of acquired healthcare operations
Smarter Healthcare
By transforming its IT infrastructure through consolidation and virtualization, UPMC has achieved more than a quantum improvement in resource efficiency. It has improved the delivery of healthcare while reducing operating costs. Changing the link between processing and resource needs has enabled UPMC to combine an ambitious clinical agenda with both a lower rate of IT investment growth and improved reliability.
Key Components
Software
- IBM WebSphere® Application Server
- IBM WebSphere Business Integration
- IBM Tivoli® product suite
- IBM Cognos®
- IBM FileNet®
Servers
- IBM System x®
- IBM System z®
- IBM BladeCenter®
- IBM Power Systems™
- IBM TotalStorage® Enterprise Storage
Solution
- IBM Component Infrastructure Roadmap
Services
- IBM Global Technology Services
- IBM Healthcare and Life Sciences
- IBM Research
- IBM STG Services
- IBM SWG Services
When UPMC joined with IBM in an eight-year, US$402 million partnership designed to transform its IT infrastructure, the deal was viewed as a watershed in the way IT vendors and their customers work together. Today, with the deal at the halfway mark, the UPMC and IBM collaboration has met the original expectations and, in many instances, has exceeded them. What continues to make the partnership unique is how the companies’ shared vision of the future of healthcare delivery is cemented by a shared commitment to fostering healthcare innovation.
The predominant focus of the partnership is on transforming UPMC’s entire IT infrastructure to lay the groundwork for the future, an effort that is far-reaching in scope and subject to major challenges—most or all of which are shared by major healthcare providers today. UPMC’s strategy is to lower the cost of healthcare innovation through IT efficiency based on the simple idea that having the resources to meet future demands—operational, clinical and technological—requires the maximum efficiency of IT resources across the entire enterprise. This story revisits the initial goals and drivers of the partnership and, more important, tracks its progress according to key milestones. A key takeaway from the UPMC-IBM experience is that a well-conceived transformation strategy can adapt to changing circumstances or intensifying trends, and even thrive under them.
Gauging progress
When the project was conceived, all key measures of information processing activity, including the volume of data and the number of applications, were projected to grow sharply, producing a commensurate increase in infrastructure and support costs. The transformation plan put forward by IBM was designed to effectively uncouple growth from cost by remaking the IT infrastructure through consolidation, standardization and—perhaps most important—virtualization. Since the project began, however, UPMC’s information processing volume has grown even faster than the plan’s initial aggressive expectations. That IBM was able to meet—and actually exceed—its infrastructure efficiency goals is compelling evidence of the robustness of the virtualization framework that UPMC and IBM put into place.
“We don’t worry about computer capacity and performance anymore, it’s just there. Having the newly transformed, virtualized infrastructure behind the scenes is contributing to improving our patient care and lowering costs. I can’t imagine running something like our Electronic Health Record systems without it.”— G. Daniel Martich, MD, Chief Medical Information Officer, UPMC
Here’s the path it took to get there. Having evolved from a major academic medical center to Pennsylvania’s largest integrated healthcare delivery system—with revenues of nearly US$8 billion and 50,000 employees—UPMC has acquired a reputation as one of the nation’s most respected and influential healthcare providers and as an innovator in patient care, research, technology and healthcare management. As part of its growth strategy, UPMC also acquired several hospitals (now numbering 20) along with numerous other kinds of care facilities. While such acquisitions strengthen both the clinical breadth and depth of the UPMC network, they also tend to complicate the IT picture by adding to the heterogeneity—and overall complexity—of its infrastructure, as each new acquisition brings its own set of applications. Moreover, because it made integration inherently more difficult, this reality conflicted directly with UPMC’s vision of leveraging information from across its entire network for the benefit of its patients.
Breaking the cycle
Resource efficiency was another huge driver for the project. Historically, UPMC’s IT costs had been propelled inexorably upward by what seemed to be an ironclad logic. More applications—and more users of those applications—meant more data, which in turn meant more servers to buy and more people required to run them. The growing requirement for servers and storage also consumed more and more of the UPMC’s physical space, which could otherwise have been used for clinical—and revenue-generating—purposes. UPMC’s leaders saw that rising IT costs were ultimately at odds with its long-term goals around innovation and patient care, a dynamic likely to intensify given the ongoing tightening of resources in the U.S. healthcare market. The central goal of the IBM-UPMC partnership is to break this linkage by going down a completely new path for its IT strategy by consolidating and standardizing its disparate server and storage resources, and aggressively implementing virtualization. “Virtualization isn’t an option,” observes Paul Sikora, vice president of IT Transformation at UPMC. “It’s a necessity.”
And, by all appearances, it’s working. Indeed, judging by the results UPMC has been able to achieve—even in the relatively early stages of the project—the virtualization strategy being implemented by IBM is exceeding even the most optimistic projections. The most telling indicator of the project’s success is the difference between UPMC’s actual capital and operating costs (related to IT) and those that would have been incurred had it taken no action. As discussed previously, a key backdrop for this comparison is the surge in processing and storage volume that resulted from the faster-than-projected expansion in the scope of UPMC’s industry-leading electronic health records adoption. In the “baseline” case—that is, had no action been taken—UPMC would have needed to more than double its number of servers, to nearly 300. Instead, it was able to reduce the number of servers by two-thirds, and the consequent reduction resulted in an avoidance of US$80 million in capital and operating costs.
At a strategic level, the project is succeeding because it has enabled UPMC to uncouple the inevitable growth in its processing capacity from the growth of its IT costs, thus rolling back what had become a major threat to its future investment in new treatments and the technologies they require. More broadly, this breakthrough—whose fundamental enabler is IT virtualization—is allowing UPMC to rewrite the rules that govern its resource decisions. By simplifying its IT infrastructure through virtualization, for instance, UPMC is able to support over 220 percent more server capacity without the need to hire any additional support staff. On top of that, the server consolidation afforded by its virtualization strategy enabled UPMC to significantly reduce its floor-space requirements. In addition to enabling UPMC to avoid facilities expansion that would have been needed under the baseline scenario, consolidation freed space that UPMC can now repurpose for revenue-generating clinical activities.
The tools of virtualization
The transformation making these benefits possible is being implemented by IBM Global Technology Services. Working in close cooperation with UPMC and following a phased approach, IBM’s role is comprehensive in scope, including the design and definition of a virtualized, dynamic infrastructure, the consolidation and migration of applications to the new system, and the optimization of applications to maximize performance.
IBM hardware products at the core of the effort include IBM System x, Power Systems, System z and BladeCenter servers, as well as IBM TotalStorage Enterprise Storage Servers, which are running the two UPMC storage databases that were consolidated from 40. Virtualization within and across these resources is enabled by IBM’s Advanced POWER® Virtualization, which performs partitioning and dynamic load distribution for Power Systems servers, and VMware’s Virtual Infrastructure 3, which will be used to consolidate more than 1000 Intel®-based servers to 20 IBM System x servers. In the latter case, the utilization rates of the servers are expected to increase from the current average of 3 percent per server to nearly 80 percent. To manage the infrastructure centrally and efficiently, the solution employs a common toolset based on IBM Tivoli products. The modular, standardized nature of the solution means UPMC can integrate new acquisitions into its network faster—enabling the more prompt realization of the acquisition’s operational and clinical goals.
If anything, the importance and urgency of healthcare as an issue has only risen since the outset of the transformation project, as has the intensity of public discourse over how to address the resource challenges for the industry—and for society as a whole. This, in turn, only strengthens the value proposition underlying UPMC’s transformation strategy.
While Sikora acknowledges the long road ahead, he sees the merits of UPMC’s efforts as beyond dispute. “We have standardized our hardware and operating systems. We have aggressively implemented almost all of our enterprise systems in a highly virtualized common infrastructure. As a result, we have more open floor space today than we did four years ago. We use less power today than we did four years ago. We support more applications, using fewer physical servers than we did four years ago.” Sikora concludes, “Today most of our servers are virtual, not physical. The virtualized infrastructure flexes to meet processing peaks; the staff can respond to the demands of UPMC faster. We are more productive, more agile and more reliable, at a lower cost point. It works well.”
For more information
Contact your IBM sales representative or IBM Business Partner.
Visit us at:
ibm.com/healthcare
Products and services used
IBM products and services that were used in this case study.
Hardware:
BladeCenter, Storage: Enterprise Storage Server, System p, System x, System z
Software:
WebSphere Business Integration, WebSphere Application Server
Service:
GTS Integrated Technology Services, GTS ITS IT Strategy & Design: Service Management Strat & Design, GTS ITS Server: Server Product Services for Power Systems, GTS ITS Server: Server Product Services for System x, GTS ITS Server: Server Product Services for System z, GTS ITS Storage & Data: Storage & Data Product Services, GTS Data Center Services
Legal Information
© Copyright IBM Corporation 2009 IBM Corporation 1 New Orchard Road Armonk, NY 10504 U.S.A. Produced in the United States of America July 2009 All Rights Reserved. IBM, the IBM logo, ibm.com, AIX, BladeCenter, Cognos, FileNet, POWER, Power Systems, System x, System z, Tivoli, TotalStorage and WebSphere are trademarks or registered trademarks of International Business Machines Corporation in the United States, other countries, or both. If these and other IBM trademarked terms are marked on their first occurrence in this information with a trademark symbol (® or ™), these symbols indicate U.S. registered or common law trademarks owned by IBM at the time this information was published. Such trademarks may also be registered or common law trademarks in other countries. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at ibm.com/legal/copytrade.shtml. Intel is a trademark or registered trademark of Intel Corporation or its subsidiaries in the United States and other countries. Other product, company or service names may be trademarks or service marks of others. This case study illustrates how one IBM customer uses IBM products. There is no guarantee of comparable results. UPMC and IBM have a joint development and marketing agreement. References in this publication to IBM products or services do not imply that IBM intends to make them available in all countries in which IBM operates. ODC03084-USEN-01