Chief information officer, Cardinal Health
As one of the largest healthcare-service companies in the world, Cardinal Health distributes medications, manages pharmacies, manufactures basic medical supplies like surgical gloves, and provides medical technologies and support services. Traditionally each business unit organized its data separately, presenting a major challenge when the company began using data to make better decisions on everything from product pricing to inventory planning. Here, CIO Patty Morrison discusses how creating a company-wide data lab and a dedicated data analytics career path have fostered enthusiasm for data throughout the company.
Can you describe the current attitude toward data analytics at Cardinal Health?
For several years there’s been a growing recognition here that analytics needs to be a strategic competency for everyone. It started in IT and has since spread to the business side. It allows many of our employees to make better decisions, which translates into tangible business benefits. Whether someone is in human resources and learning to do talent analytics or in finance doing scenario planning or in inventory doing forecasting, everybody can benefit from a different component of analytics.
What were some of the key moments or challenges in getting started?
The big challenge from an IT perspective was managing our data. We have 20 or so different business units in the United States alone and a lot of our data wasn’t indexed the same way throughout the company. So we created a place where people can put very large quantities of mixed information. We then organize the data and place it in an accessible environment, which we call our Data Lab. Analytics experts from across the company can then access it and run their models. It’s kind of like our own little private cloud and it’s been very successful for us.
Is there an internal training regimen to teach analytics skills? Or is that left to the hiring process?
Both. Once we had the Data Lab up and running, we began working with several partners across the company to establish an actual career roadmap for data analytics, which includes specific information about background requirements, titles, positions and of course training. Having an explicit career roadmap allows our HR partners to have the right compensation structure to hire for these positions. And the talent pool is really growing. In Columbus, Ohio, where we’re based, several universities are building analytics programs for college-age students and mid-career executives, including The Ohio State University and Miami University in Oxford, Ohio. Franklin University is building a program specifically for healthcare analytics and informatics. And last year we also joined with IBM and the insurance, financial services, healthcare and retail industries in Columbus to open a Center for Advanced Analytics.
How do you deal with employees who are intimidated by or wary of a data-centric approach to making decisions?
It isn’t something you can force on people. You win people over with small doses and by getting them excited with what the tools can do for them. Excited people want to learn more and we train them, share best practices, and collect use cases. Having specific stories of how analytics has created real value for the company makes it easier to go to the CFO for funding. But it also really gets people excited and causes the message to spread virally. When we hosted an analytics fair we had close to 40 tables where employees showed how they had applied analytics to their jobs. We attracted double the attendance we expected.
Do you have any examples of analytics contributing to the bottom line?
Pricing analytics is the most obvious. Here at Cardinal Health, finance is in charge of pricing and even the tiniest fluctuations in pricing substantially affects our revenue. Of course that’s true for any company but it’s especially true in healthcare where there’s incredible pressure to reduce costs. Finance uses analytics to pay very close attention to the market and react very quickly to any changes. It’s also fundamental in their efforts to be more predictive. It helps them understand how pricing will affect future sales and determine the profitability of contracts.
What has your experience been working with marketing?
At this point analytics is a core technical skill of marketers, so we’re not teaching them about why they should be using data. In fact, there are some digital marketing people here who know more about analytics than we do in IT. Marketing isn’t just about being creative or about events and communication anymore, it’s about learning how to look at data in a different way. Really, the biggest focus with marketing is teaching them about the importance of data privacy. When you’re trying to solve a problem for the customer and get insights into the business, privacy might not always be the first thing that you think about.
Do healthcare privacy laws like the Health Insurance Portability and Accountability Act affect your use of analytics?
Well, first off, any time you’re dealing with private data, you have to protect that data no matter what industry you’re talking about. That might be as simple as making sure your data center has the appropriate security controls and data stewardship or deciding what data should be retained. In healthcare, keeping up with changes in legislation such as HIPAA or knowing what exactly is HIPAA-protected data is absolutely vital. But every company in every industry deals with sensitive information, whether it’s customer data or employee data or intellectual property. These days everyone has to very good at data privacy.