Welcome!

Microservices Expo Authors: Liz McMillan, Elizabeth White, Jason Bloomberg, Anders Wallgren, Derek Weeks

Related Topics: Containers Expo Blog, Java IoT, Industrial IoT, Microservices Expo, Agile Computing, @CloudExpo

Containers Expo Blog: Article

Shift in Culture Delivers Better Results

McKesson redirects IT to become a services provider that delivers fuller business solutions

The next edition of the HP Discover Performance podcast series highlights how pharmaceuticals distributor and healthcare information technology services provider McKesson has transformed the very notion of IT. We will see how a shift in culture and an emphasis on being a services provider has allowed McKesson to not only deliver better results, but elevate the role of IT into the strategic fabric of the company.

To learn more about how McKesson has recast the role of IT and remade its impact in a positive way, join Andy Smith, Vice President of Applications Hosting Services at McKesson. The discussion is moderated by Dana Gardner, Principal Analyst at Interarbor Solutions. [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]

Here are some excerpts:

Gardner: Let me start with this notion of IT transformation. What allowed you to convince others that this was worth doing?

Smith: What we did, and this started several years ago, was to focus on what our competition was doing, not the competition to McKesson -- but the competition to IT. In other words, who was the outsourcer or who were the other data-center providers. From that, we were able to focus on our cost, quality, and availability and come up with a set of metrics that covered it all, so that we could know the areas we needed to transform and the areas where we were okay.

Gardner: So, in a sense, you had to redefine yourself as a services provider, because that's who you saw as your competition?

Smith: Exactly, and that's who our customers are talking to -- our competition. When they came to us for a service, they had already talked to third-party providers. And so we realized very quickly that our competition was the outside world, so we had to model ourselves to be more like them and less like an internal IT department.

Gardner: That, of course, cuts across not only technology, but culture and the whole idea of being accountable, and to whom. So let's start at that higher level. How did you begin to define what the new culture for IT should be?

Balanced scorecard

Smith: We started out with a balanced scorecard. It really came down to whether the employees and the customers were satisfied. Did we do what we said – were we accountable -- and were the financials right?

So when we started setting up that balance scorecard, that on its own started to change the culture. Suddenly, customer satisfaction mattered, and suddenly, system availability mattered, because the customer cared, and we had to keep the employees trained, so that they were satisfied.

Over time, that really changed the culture, because we're looking at all four parts of the scorecard to make sure we're moving forward.

When we were just an internal IT department, we spent more time saying, "The customer gave us an order, we hit the checkbox and finished that order, we're done." We were always asking, "Did we do it, and did we do it on time?"

What we really focused in on were the real drivers. A lot of the measures are more trailing indicators. Even money tended to be a trailing indicator.

That's not really what the customer was looking for. The customer was looking for. "Did you deliver what I needed, which may be different than what I asked for. Did you deliver it at a good price? Did you deliver it at a good quality." So it did switch from being measuring the ins and the outs of an order taker, to whether we are delivering the solution at the right price.

Gardner: As we've seen in a number of companies, when they’ve gone to more measurement using metrics, key performance indicators (KPIs), and working towards service-level agreements (SLAs), sometimes that can become daunting. Sometimes, there is too much, and you lose track of your goal. Is there a way that you work towards a triage or a management approach for those metrics, those KPIs, that allowed you to stay focused on these customer issues?

Smith: What we really focused in on were the real drivers. A lot of the measures are more trailing indicators. Even money tended to be a trailing indicator.

So we went into what's really driving our quality, what's really driving our cost. We got down to four or five that we are the ones that mattered. "Is the system up and running. Are changes causing outages. Are data protection services reliable. Are our events being handled quickly and almost like a first call resolution. Are they being resolved by the first person that gets the event?"

The focus was prevent the outage and shorten up the mean time to restore, because in the end, all of that will drop the cost. It worked, but it was focusing on a handful, rather than dozens.

Pulling down cost

It truly did bring down our cost within McKesson. Each year we pull down our cost several million dollars. So every year my budget gets smaller, but every year my quality gets higher, my employee satisfaction gets higher, and my customer satisfaction gets higher.

It can really get both. You don't have to sacrifice quality to reduce cost. The trick was saying that I no longer needed a person to do this commodity factory work. I could use a machine to do that, which freed up the worker from being a reactive commodity person to being a proactive value-add person. It allowed the employee to be more valuable, because they weren't doing the busy work anymore. So it really did work.

Gardner: For those in our audience who might not be familiar with McKesson, tell us a little bit more about the company. Specifically, tell us about the scale of your IT organization to put those millions of dollars into some perspective in the total equation?

Smith: McKesson IT is roughly 1,000 employees. The company is roughly 45,000 employees. So percentage-wise, we're not that big. My personal budget to run the IT infrastructure is about a $100 million a year.

So pulling out a few million dollars a year may be only a few percent, but it's still a pretty significant endeavor. We've managed to pull that cost out, both through the typical things like maintenance contracts and improved equipment, but also by not having to grow the full-time employee (FTE) base. I haven't had to let any FTEs go, but what we've discovered was that, as we did these things, I needed fewer employees.

To get people to stop thinking about the technology and start thinking about the business solution is a slow transition, because it's a real mind-shift.

As employees resigned, I didn't have to replace them. My staff base has been shrinking, but I haven't had anybody lose a job. So that's been also very reassuring for the employees, because they kept waiting for that big shoe to drop, waiting for us to say, "We're going to outsource you," but we've never had to do it.

Gardner: When you compete against the outsourcers better, then you are going to retain those jobs and keep that skill set going. There is a cliché that you're able to take people from firefighting and put them into innovation. Is there a truth to that in what you've done?

Smith: That really is truth. It took time, and we’re not done, but to get people to stop thinking about the technology and start thinking about the business solution is a slow transition, because it's a real mind-shift. In a lot of ways, these employees see the reactive work as the bread and butter work that puts the paycheck on the table. That lets them be a firefighter and a hero, and if you take that away, the motivators are different.

It takes time to get people comfortable with the fact that your brain is worth a lot more doing value-add work than it was just doing the firefighting. We're still going through that cultural shift. In some ways, it's easier for the older employees, because if you go back a few decades, IT was that. It was programmer analyst, system analyst, and business analyst. For me, "analyst" disappeared from all my job titles.

In the last couple of decades, for some reason, we erased analyst, and now you're just a programmer or an operator. In my mind, we're bringing the analyst back, which for the older employees, is easy, because they used to do it. For the younger employees, we've got to teach them how to be consultants. We've got to teach them how to be analyst. In some cases, it's a totally different, scary place to go, because you actually have to come out of the back office and talk to somebody, and they're not used to that.

Cultural shift

Gardner: Maybe there are methodologies that work here that you could discuss, services-oriented architecture (SOA) comes to mind and also ITIL. Have you been using ITIL approaches and SOA to help make those transitions? Is there a technology track is a cultural shift?

Smith: Yes, we went down the ITIL road, because we were manual before. Everybody was doing it with tribal knowledge. The way I did it today might be different than the way I'd do it tomorrow, because it's all manual, and it's all in people's heads.

We did go into ITIL version 3 and push it very hard to give that consistency, because the consistency really mattered. Then, we could really measure the quality. We could be ensured that no matter who did it or when it was done, it was done the same way, and that reliability mattered a lot.

We also got away from custom technology, and we got to where everything is going to be a certain type of machine. It's going to look the same. All the tools are going to be fully integrated and no longer be best-of-breed point solutions. Driving that standardization made a big difference. You don’t have to remember that machine on the left you reboot it this way, and that machine on the right you reboot it a different way. You don’t have to remember anymore, because they're all the same.

We made the equipment and tools standard and more of a commodity so that the people didn’t have to be that anymore. The people could be thought leaders. All those things really did work to drive out the cost and increase the quality, but it's a lot of different pieces. You can't do it with just one golden arrow. You have to hit it from every angle.

We had to increase the transparency to say we’re doing a good job or we’re doing a bad job.

We had to change the technology, the people, and the processes. We had to increase the transparency to say we’re doing a good job or we’re doing a bad job. It was just, "Expose everything you’re doing."

That's scary at first, but in the end, we found out we really are competing with the competitors and we can continue to do it, and do it better. We understand healthcare, we understand McKesson, and we’re an internal group, so we don’t have a profit margin. All those things combined can make us a better IT solution than a third party could be.

What really matters is the business solution you’re trying to solve. We’re stepping even farther back, saying that the service is order to cash, or the service is payroll, or the service is whatever. We’re stepping back farther, so we can look at the service from the standpoint of the customer. What does the customer want? The customer doesn’t want Unix. The customer wants order to cash. The customer doesn’t want Windows. The customer wants payroll.

Thinking about cloud

Stepping back has now allowed us to start thinking about that cloud. All the equipment underneath is commoditized, and so I can now sit back and say that the customer wants this business solution and ask who is the best person to give me the components underneath?

Some of them, for security reasons, we’re going to do on our internal cloud. Some of them, because of no security issues, we’re going to have a broker with an external provider, because they may be better, cheaper, or faster, and they may have that ability to burst up and burst down, if we’re doing R&D kind of work.

So it's brought us back to thinking like a business person. What does the business need and who is the best provider? It might not be me, but we’ll make that decision and broker it out. This year we're probably going to pull off our internal cloud and our external cloud and really have a hybrid solution, which we’ve been talking about for a couple of years. I think it will really happen this year.

More Stories By Dana Gardner

At Interarbor Solutions, we create the analysis and in-depth podcasts on enterprise software and cloud trends that help fuel the social media revolution. As a veteran IT analyst, Dana Gardner moderates discussions and interviews get to the meat of the hottest technology topics. We define and forecast the business productivity effects of enterprise infrastructure, SOA and cloud advances. Our social media vehicles become conversational platforms, powerfully distributed via the BriefingsDirect Network of online media partners like ZDNet and IT-Director.com. As founder and principal analyst at Interarbor Solutions, Dana Gardner created BriefingsDirect to give online readers and listeners in-depth and direct access to the brightest thought leaders on IT. Our twice-monthly BriefingsDirect Analyst Insights Edition podcasts examine the latest IT news with a panel of analysts and guests. Our sponsored discussions provide a unique, deep-dive focus on specific industry problems and the latest solutions. This podcast equivalent of an analyst briefing session -- made available as a podcast/transcript/blog to any interested viewer and search engine seeker -- breaks the mold on closed knowledge. These informational podcasts jump-start conversational evangelism, drive traffic to lead generation campaigns, and produce strong SEO returns. Interarbor Solutions provides fresh and creative thinking on IT, SOA, cloud and social media strategies based on the power of thoughtful content, made freely and easily available to proactive seekers of insights and information. As a result, marketers and branding professionals can communicate inexpensively with self-qualifiying readers/listeners in discreet market segments. BriefingsDirect podcasts hosted by Dana Gardner: Full turnkey planning, moderatiing, producing, hosting, and distribution via blogs and IT media partners of essential IT knowledge and understanding.

@MicroservicesExpo Stories
This is not a small hotel event. It is also not a big vendor party where politicians and entertainers are more important than real content. This is Cloud Expo, the world's longest-running conference and exhibition focused on Cloud Computing and all that it entails. If you want serious presentations and valuable insight about Cloud Computing for three straight days, then register now for Cloud Expo.
SYS-CON Events announced today that Stratoscale, the software company developing the next generation data center operating system, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Stratoscale is revolutionizing the data center with a zero-to-cloud-in-minutes solution. With Stratoscale’s hardware-agnostic, Software Defined Data Center (SDDC) solution to store everything, run anything and scale everywhere...
SYS-CON Events announced today that Men & Mice, the leading global provider of DNS, DHCP and IP address management overlay solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. The Men & Mice Suite overlay solution is already known for its powerful application in heterogeneous operating environments, enabling enterprises to scale without fuss. Building on a solid range of diverse platform support,...
You deployed your app with the Bluemix PaaS and it's gaining some serious traction, so it's time to make some tweaks. Did you design your application in a way that it can scale in the cloud? Were you even thinking about the cloud when you built the app? If not, chances are your app is going to break. Check out this webcast to learn various techniques for designing applications that will scale successfully in Bluemix, for the confidence you need to take your apps to the next level and beyond.
Digital means customer preferences and behavior are driving enterprise technology decisions to be sure, but let’s not forget our employees. After all, when we say customer, we mean customer writ large, including partners, supply chain participants, and yes, those salaried denizens whose daily labor forms the cornerstone of the enterprise. While your customers bask in the warm rays of your digital efforts, are your employees toiling away in the dark recesses of your enterprise, pecking data into...
SYS-CON Events announced today that DatacenterDynamics has been named “Media Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY. DatacenterDynamics is a brand of DCD Group, a global B2B media and publishing company that develops products to help senior professionals in the world's most ICT dependent organizations make risk-based infrastructure and capacity decisions.
With DevOps becoming more well-known and established practice in nearly every industry that delivers software, it is important to continually reassess its efficacy. This week’s top 10 includes a discussion on how the quick uptake of DevOps adoption in the enterprise has posed some serious challenges. Additionally, organizations who have taken the DevOps plunge must find ways to find, hire and keep their DevOps talent in order to keep the machine running smoothly.
Call it DevOps or not, if you are concerned about releasing more code faster and at a higher quality, the resulting software delivery chain and process will look and smell like DevOps. But for existing development teams, no matter what the velocity objective is, getting from here to there is not something that can be done without a plan. Moving your release cadence from months to weeks is not just about learning Agile practices and getting some automation tools. It involves people, tooling and ...
Between the mockups and specs produced by analysts, and resulting applications built by developers, there exists a gulf where projects fail, costs spiral, and applications disappoint. Methodologies like Agile attempt to address this with intensified communication, with partial success but many limitations. In his session at 18th Cloud Expo, Charles Kendrick, CTO & Chief Architect at Isomorphic Software, will present a revolutionary model enabled by new technologies. Learn how business and devel...
The notion of customer journeys, of course, are central to the digital marketer’s playbook. Clearly, enterprises should focus their digital efforts on such journeys, as they represent customer interactions over time. But making customer journeys the centerpiece of the enterprise architecture, however, leaves more questions than answers. The challenge arises when EAs consider the context of the customer journey in the overall architecture as well as the architectural elements that make up each...
APIs have taken the world by storm in recent years. The use of APIs has gone beyond just traditional "software" companies, to companies and organizations across industries using APIs to share information and power their applications. For some organizations, APIs are the biggest revenue drivers. For example, Salesforce generates nearly 50% of annual revenue through APIs. In other cases, APIs can increase a business's footprint and initiate collaboration. Netflix, for example, reported over 5 bi...
As the software delivery industry continues to evolve and mature, the challenge of managing the growing list of the tools and processes becomes more daunting every day. Today, Application Lifecycle Management (ALM) platforms are proving most valuable by providing the governance, management and coordination for every stage of development, deployment and release. Recently, I spoke with Madison Moore at SD Times about the changing market and where ALM is headed.
If there is anything we have learned by now, is that every business paves their own unique path for releasing software- every pipeline, implementation and practices are a bit different, and DevOps comes in all shapes and sizes. Software delivery practices are often comprised of set of several complementing (or even competing) methodologies – such as leveraging Agile, DevOps and even a mix of ITIL, to create the combination that’s most suitable for your organization and that maximize your busines...
These days I mostly make my living as a consultant. Consultants in general are probably not the best loved group in the world. It is common to think of consultants wafting-in to your organization, telling you things that you already know and advising you to “change your culture”, whatever that means. Subsequently they depart, no-doubt with a fat fee, and leave you as you were before with the same problems and no progress made.
Struggling to keep up with increasing application demand? Learn how Platform as a Service (PaaS) can streamline application development processes and make resource management easy.
In the rush to compete in the digital age, a successful digital transformation is essential, but many organizations are setting themselves up for failure. There’s a common misconception that the process is just about technology, but it’s not. It’s about your business. It shouldn’t be treated as an isolated IT project; it should be driven by business needs with the committed involvement of a range of stakeholders.
New Relic, Inc. has announced a set of new features across the New Relic Software Analytics Cloud that offer IT operations teams increased visibility, and the ability to diagnose and resolve performance problems quickly. The new features further IT operations teams’ ability to leverage data and analytics, as well as drive collaboration and a common, shared understanding between teams. Software teams are under pressure to resolve performance issues quickly and improve availability, as the comple...
The goal of any tech business worth its salt is to provide the best product or service to its clients in the most efficient and cost-effective way possible. This is just as true in the development of software products as it is in other product design services. Microservices, an app architecture style that leans mostly on independent, self-contained programs, are quickly becoming the new norm, so to speak. With this change comes a declining reliance on older SOAs like COBRA, a push toward more s...
Join IBM June 8 at 18th Cloud Expo at the Javits Center in New York City, NY, and learn how to innovate like a startup and scale for the enterprise. You need to deliver quality applications faster and cheaper, attract and retain customers with an engaging experience across devices, and seamlessly integrate your enterprise systems. And you can't take 12 months to do it.
The proper isolation of resources is essential for multi-tenant environments. The traditional approach to isolate resources is, however, rather heavyweight. In his session at 18th Cloud Expo, Igor Drobiazko, co-founder of elastic.io, will draw upon their own experience with operating a Docker container-based infrastructure on a large scale and present a lightweight solution for resource isolation using microservices. He will also discuss the implementation of microservices in data and applicat...