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Randy Spratt McKesson CIO & CTO Februar y 2011. The Transformational CIO As a Competitive Weapon. HMG Strategy Summit CIO Leadership Series. A bit about my world. Manufacturers 400 Pharmaceutical 2,000 Medical-Surgical 950 Consumer Product. Providers 200,000 Physicians - PowerPoint PPT Presentation
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Randy SprattMcKesson CIO & CTO February 2011
H M G S t r a t e g y S u m m i t
C I O L e a d e r s h ip S e r i e s
The Transformational CIOAs a Competitive Weapon
A bit about my world
04/19/2023 2
Manufacturers 400 Pharmaceutical2,000 Medical-Surgical950 Consumer Product
Providers200,000 Physicians10,000 Long-Term Care Facilities5,000 Hospitals 750 Home Care Agencies
Health Plans600 Payor Organizations
Consumers25 Million Healthcare Patients
Retail Pharmacies26,000 Locations
Steady growth, well leveraged
FY06 FY07 FY08 FY09 FY1060
70
80
90
100
110
120
Revenue $B
FY06 FY07 FY08 FY09 FY10 $1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
EPS*
04/19/2023 3
6% CAGR
17% CAGR
*Continued Operations
Value Creation
04/19/2023
PROPERTY OF McKESSON CORPORATION
4
Value
Growth
Leverage
Acquire Share
Retain Base
Position in Growing Markets
Process Efficiency
Scale Efficiency
CustomerService
Execution
Strategy
Capital
Sourcing
Defects
Consumption
IT Life Cycles in Value CreationPerpetual Pendulum
04/19/2023 5
Business Nirvana Reality IT Nirvana
AgilitySpeedControl“cost”
EfficiencySecurity
Cost
IT Life Cycles – Another VersionVirtuous Cycle
04/19/2023 6
• Innovation New products New Services
• Adoption Customer Satisfaction Customer Experience• Standardization
Process efficiency Operational Excellence
• Commoditization Low Cost, capital High availability Demand driven Business Continuity
& Security
TOPLINE
GROWTH
BOTTOMLINE
LEVERAGE
Managing the Entire Life Cycle
• Collaboration at every step• Governance at every level• Execution and quality are table stakes• Business Strategy and Business Value Driven• Measure the value elements relentlessly• Allow experiments but make them transparent• Converge experiments based on success and
relevance• Move with velocity through the cycle but don’t force it
04/19/2023 7
Governance and Collaboration
04/19/2023 8
ExecCommittee
Shared Services Governance Board
CIOCouncil
TechCouncil
Corp ServicesCouncil
Working Groups
Tech Advisory
Board
TAB Committees
HR Council
Working Groups
Steering
DirectionFunding
Alignment
OperationsPlanning
McKesson Results
Metric 2005 2010
Business executive satisfaction with IT
12% Satisfied or better
96% Satisfied or better
IT Employee engagement
62%; lowest in McKesson
86%; highest in McKesson (IT GHP Norm: 80%)
Allocations YoY change
12%; demand unknown
-2%; demand up 17% avg
SLA Performance No SLAs 98% Met
IT Life Cycle Position Oscillating toward Business Nirvana
Engaging Virtuous Cycle
04/19/2023 9
2010 CIO Priorities*What are you working on?
Business Priorities Technology Priorities
1 Business Process Improvement Virtualization
2 Reducing Enterprise Costs Clouds
3 Increasing use of information / analytics
Web 2.0
4 Enterprise workforce effectiveness Networking, voice, data comm
5 Attracting and retaining customers Business Intelligence
6 Managing change initiatives Mobile Technologies
7 Creating new products and services
Data/document management & storage
8 Targeting customer & markets more effectively
Service-oriented apps & architecture
9 Consolidating business operations Security technologies
10 Expanding current customer relationships
IT Management
04/19/2023 10
NEW:• Saas
• iThings
*After Gartner 2010 CIO Survey
FY01 Technologies
FY11: Free.
Technology FY01 $
3 MP Digital Camera $3,499
Cell phone (99 number storage) $469
Portable Computer (300 Mhz, 6 Gb, 90 Mb RAM)
$1,699
Hi-8 Video Camera $1,899
Portable Voice Recorder $129
Portable MP3 Player (6 Gb disk) $499
Portable GPS, 3.7” Color $545
Total…. $8,739
• Disruptive business models to increase speed of new product development
• Application value tied to data value
• Social networking dominates advertising and marketing
• Healthcare is fundamentally a mobile experience
2009 2010 2011E0
50
100
150
200
250
300
350
Uni
ts S
hipp
ed (M
illio
ns)
Smartphone Growth
• Private and Public Clouds – an every day reality today, will be dominant tomorrow
• Applications and everything they use moving to a service model
• Healthcare Reform and ARRA depend upon a cloud delivery model
Data and Services
The Internet
You
• Aggregation enabled by cloud models
• Enables analytics, research, information search and exchange
• Healthcare data volume will explode in next 5 years
2005 2006 2007 2008 2009 2010 2011 -
500
1,000
1,500
2,000
2,500
Exab
ytes 20-fold increase
in six years
Digital Data Creation
• Embracing HIPAA / HITECH
• Risk Management
• Stronger Fundamentals – Best Practices, Analytics and Metrics
• Bookending: Prevention & Business Continuity