PeopleSoft Enterprise Application Management Case Study

Application Hosting and Management Means Smooth Operations for Barnabas Health (Cont'd)

About Barnabas Health

Barnabas Health Facts

Business Needs

A more cost-effective, consistent way to centralize visibility and control over human resource and payroll data

Networking Solution

Oracle® PeopleSoft® Enterprise HCM 9.1 applications and payroll processing services delivered in a SaaS model; professional services for implementation, migration and on-going payroll processing and payroll tax services

Business Value

Consistent HR and payroll processes and a consolidated database of workforce information for reporting and compliance

Industry Focus

Healthcare organization

Size

$2.5 billion in total annual revenue

As the largest healthcare system in New Jersey, Barnabas Health provides treatment and services for more than two million patient visits each year. In a study of nearly 5,000 hospitals, U.S. News & World Report recently named Barnabas Health among its Best Hospitals in the Metro Area rankings. Headquartered in West Orange, New Jersey, it has 18,500 employees and 4,600 physicians across 29 locations.

Situation

Barnabas Health needed to update its human resource (HR) and payroll applications to bring new capabilities to its business operations. It also needed a more cost-effective model for delivering solutions in a centralized, consistent way that would serve as a foundation for the future.

Solution

Taking advantage of a fully Managed Applications Services deployment model, Barnabas Health has upgraded to the latest HR and payroll applications. Instead of capital investments in on-premises equipment, Barnabas Health pays a predictable monthly fee for hosting and application management, payroll and tax services, and has a clear technology direction for moving forward.

Managing Costs for a Healthy Bottom Line

Now we can shift capital investments to support next-generation clinical information systems and our continued integration strategy.”

Tom Bartiromo, Senior Vice President, CTO and Interim CIO, Barnabas Health

As the second largest private employer in the state of New Jersey, managing HR and payroll is no small operation for Barnabas Health. Through growth and acquisitions, Barnabas Health now comprises 53 separate companies and 29 locations. Priding itself on delivering a consistent quality of care across its hospitals, outpatient centers and special care facilities, establishing and optimizing consistent HR and payroll processes for its 18,500 employees is also of vital importance.

“We’re a very effectively managed healthcare system and we’re always looking for improvements every step of the way,” said Rama Govinda, Barnabas Health’s Director of Enterprise Business Information Technology Services. “Prior to the new fully managed applications solution, the limitations of the older PeopleSoft applications, which had been in place since 1999, were keeping us from implementing many of the other applications and features we wanted, such as web-enabled employee self-service tools.”

Yet, the cost to upgrade the applications needed to be considered. “In healthcare, ensuring the finest patient care is our highest priority. But cost and revenue must always be considered to maintain the financial viability of the institution,” said Barnabas Health Treasurer Brian Kirkpatrick. “We saved money by working with AT&T. They provided us with a cost-effective solution based on the HR and payroll software out there. AT&T will also make sure we are current with upgrades, patches and fixes,” Mr. Kirkpatrick continued. “It’s built into the cost-efficient model we created.”

“Our CIO and Senior VP of HR championed the PeopleSoft upgrade,” Mr. Govinda added, noting that the organization assessed five other HR and payroll solutions. “Many of our development teams and end users were already familiar with PeopleSoft and the price was within our reach, so it was an easy decision for us. AT&T also has state-of-the-art data centers, so we knew our data would be highly secure. They were a one-stop shop for servers, networking and applications.”

Change with Less Pain

To ease the transition and join Barnabas Health and AT&T project teams, Mr. Govinda involved stakeholders and users in the change process early on. “As we went live with the upgrade, we brought together the payroll and IT staffs into one facility where HR staff worked. Collectively, our project team worked with the AT&T team right from the start,” he said.

AT&T also interacted with payroll provider ADP and Oracle throughout the transition to deliver the integrated, end-to-end solution Barnabas needed. “From project tracking and system testing all the way to training, go live and post-production support, AT&T was very closely involved in each and every step of the way,” said Mr. Govinda.

With more than five PeopleSoft releases since the initial 1999 installation, there was no standard, one-step upgrade path. The entire PeopleSoft environment would need to be re-installed, which involved a massive data conversion project to import data from the old PeopleSoft and ADP systems.

In addition, customizations developed on the older software release had to be mapped and verified in the current release to ensure all functionality was achieved while reducing processing time and manpower requirements. The AT&T project team worked extensively with the Barnabas Health’s stakeholders to review each process. Multiple waves of regression testing ensured process and data accuracy.

“Payroll is a major business function that doesn’t stop, so we needed to maintain the old and the new systems in parallel,” Mr. Govinda said. “The data was constantly being updated in both systems and AT&T played a vital role in maintaining the integrity of the data between them. It was a big hurdle and a tremendous effort, but that’s how we were able to go live on time with no major issues.”

After piloting the new PeopleSoft HR and payroll solution in one business unit, the teams initiated a rolling go-live process, which began in December 2010 and completed in March 2011, with 7,300 users on board. “During the process, our end users became very comfortable with the new system,” Mr. Govinda said. “The training went very smoothly because they were involved so much sooner than the first go-live date, so they were able to hit the ground running.”

As part of the transition, AT&T also integrated data flows between the new PeopleSoft HR and payroll solutions and a Kronos time-keeping application, a SaaS solution hosted by ADP.

Mr. Kirkpatrick was impressed with all the work done to launch the successful project. “We really brought our systems to state of the art in a period of a year,” he said. “When you look at what we went through, we completely recreated our whole timekeeping system. We completely redid our payroll HR system and centralized the payroll department all within one year. And we did it without missing a paycheck and without making a mistake.”

Consolidation is the Cure

Today, Barnabas Health’s PeopleSoft HR and payroll systems run on servers within an AT&T Internet Data Center, linked to Barnabas’ systems through highly secure network connections. AT&T manages and supports the system and network infrastructure. As part of the solution, AT&T also manages the PeopleSoft applications and Barnabas users can access the service over the web for a per-month fee for hosting and application services.

Now payroll operates quite differently at Barnabas Health. Instead of having paper-based time cards and four disparate time-keeping systems, more than 18,200 employees swipe their cards into on-site time clocks in the same way. Data automatically flows into a single PeopleSoft HCM database.

Barnabas Health also takes advantage of AT&T Business Process Outsourcing (BPO) services for payroll and payroll tax services. Once the checks are approved, AT&T prints them or sends funds electronically to banks, then pays local, state and federal taxes on Barnabas Health’s behalf. Instead of manually applying tax updates into the old PeopleSoft system, the updates are automatic for Barnabas Health. To further ensure timely paychecks, AT&T also provides a redundant data center for payroll processing.

With a web-enabled PeopleSoft solution, Barnabas Health provides employees with a highly secure online portal and self-service tools to view payroll and benefits information, update personal data and print tax forms. They can also switch from paper-based checks to direct deposits, chosen by over 80 percent of employees. Workers access the system from home or through on-site kiosks in Barnabas Health facilities.

“Everything works smoothly and we don’t skip a beat,” Mr. Govinda said. “With a common platform and database, we have one source of truth for HR and payroll information.”

By centralizing payroll functions, Barnabas Health reduced full-time staff and consolidated 26 checking accounts to three, significantly decreasing bank fees. And, Mr. Kirkpatrick said, they now have standardized, consistent processes across the organization.

“We can manage a decentralized operating environment from a central standpoint,” he said. “The Senior VP of HR and I have full visibility into everything going on in the payroll system through daily reports. Having that information has allowed us to make sure every employee transfer or termination is documented, every pay rate change has been properly vetted through HR and that nothing unusual can occur without senior management seeing it.”

With patient data protection an imperative today, Barnabas Health’s SVP, Senior Vice President, CTO and Interim CIO Tom Bartiromo said the organization also benefits from the prompt application of security patches, annual disaster recovery tests and compliance audits like SSAE 16 done by AT&T.

“In addition to reducing our overall payroll processing expenses and adopting best practices across our healthcare system, we can also secure and encrypt patient data in motion and at rest,” he said. “We can comply with strict healthcare regulations and our own standards of care for how sensitive and patient information is accessed and stored.”

While management is pleased with the transformation, payroll workers are, too. “We have a much calmer payroll department,” said Mr. Kirkpatrick. “They love the new system and management loves the increased insight and control.”

Future Prognosis

The updated technology foundation is now a springboard for new applications. After the initial PeopleSoft project, Barnabas Health also implemented employee performance management software. Other projects with AT&T are also underway or on the roadmap.

According to Mr. Bartiromo, the new solutions provide the organization with increased flexibility. “As our services evolve from sickness care to health care and wellness, our business and financial models have had to change as well,” he said. “Now we can shift capital investments to support next-generation clinical information systems and our continued integration strategy.

“AT&T provides us with a highly secure, reliable and scalable solution, a high level of service continuity and a more cost-effective, predictable cost structure,” Mr. Bartiromo added. “We’re now moving PeopleSoft finance and supply chain solutions to AT&T for application hosting and management. Based on our experience, I fully expect AT&T will live up to our high expectations for service quality and excellence in the future.”

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