Why Health Systems are Betting Big on ERP

Shannon McGovern [00:00:00]:

I think it’s super important for a company to have a set of core values that’s like their North Star, that everyone understands, can articulate and lives by every single day. I think a company that’s born in the cloud versus one that creates a cloud strategy mid-journey is different. It provides a different tech experience. And then I think culturally, being in a place where people are happy, having fun, and having customers that are seeing success is really important.

Narrator [00:00:25]:

From Healthcare IT Leaders, you’re listening to Leader to Leader with Ben Hilmes. Our guest today is Shannon McGovern, GVP of Healthcare Sales at Workday. In our conversation, Shannon discusses the importance of Enterprise Resource Planning in the healthcare industry and shares her passion for supporting women in leadership roles.

Ben Hilmes [00:00:50]:

Hey Shannon, it is so great to have you on leader to leader. You know, it’s funny, I was preparing for this. I was thinking, I’ve actually been in this industry multiple decades and so I started thinking about things from a decade perspective and I grew up in the EHR space. And so in zero nine it’d be meaningful use started just literally driving the digitization of healthcare the last handful of years. We’re starting to see the kind of the second order effects of that, but now it feels like we’re moving into what I would call a new horizon. And ERP is getting its day in the sun. I’d love to hear your perspective on that. What’s driving it? What are the macro trends that you are seeing in the marketplace that are really pushing ERP to the front of a lot of conversations, a lot of big investments inside of this industry?

Shannon McGovern [00:01:41]:

Sure, yeah. Thank you. Happy to be here. Appreciate the time and the discussion. I’m sure its going to be fun. We at Workday are seeing three primary business challenges in healthcare that our customers are using workday to solve. So I think the first is agility, the second is profitability, and the third is mitigating risk. The needs in healthcare continued to evolve at a really rapid pace.

Shannon McGovern [00:02:06]:

Organizations are driving for innovation, for clinical diagnostics and care delivery, to reduce their costs of care and improve overall quality and outcomes. And I think the EMR clearly was like a big enabler of that. But I think in order to enable the full potential in healthcare, organizations have to also accelerate digital transformation for their enterprise, resource planning and talent solutions. So here at workday, we’re committed to helping our healthcare customers fulfill their mission of providing high quality patient care by arming our customers with proven solutions and continuous technology innovation. So we do this in kind of two key ways one, we’re helping to create efficiencies and improved experiences across the organization. So doing more with the resources that you have, helping to avoid things like burnout or frustrating patient experiences, and then improving visibility into the business side of care delivery. So, identifying opportunities to improve overall financial performance from reducing the overall spend through system consolidation, supply chain savings, optimizing labor costs amid chronic nursing shortages, scaling your business operations to support increased volumes and expanded footprints that may happen via acquisition. We know M and A is pretty big in the healthcare world, and then giving you real time access to unified data so that you can make informed, insightful, smart decisions about the business and changes you need to make.

Shannon McGovern [00:03:35]:

I think no matter what size of healthcare provider you are, cloud ERP can help you with all of that. And I also think that CIO is sharing with us that there is a real need for consolidation in their tech stack. I’ve heard just like crazy numbers, hundreds and thousands of applications that they’re managing and maintaining, and so they really need to simplify the infrastructure and architecture to reduce cost and reduce complexity. And so I think moving to the cloud and standardizing on two to three key platforms for the enterprise has been a key priority, and we see EMR as one. And ERP is too.

Ben Hilmes [00:04:10]:

It’s really interesting, and you said a lot there, and so trying to unpack a little bit of that, because I think it’s important to break some of this down. And a lot of what you said on the EMR space and the care delivery space, there definitely are a lot of stakeholders. But when you start getting into a lot of the shared service function inside of a health system finance HR supply chain. When I was at Adventist Health, we had 52 different functions that we called a shared service. And then your point on apps, we had 1700 apps across the enterprise, so the complexity is crazy. And so in this world of ERP, and I’ve heard it’s ERP, it’s HCM, it’s WFM, and inside of that, there are just a lots and lots of stakeholders. So I think our listeners would love for you to take us inside of a selection, if you would, what that looks like, who are the key stakeholders? Some best practices that you guys have of how you get from intro to close, and then more importantly to utilization of the solutions to drive value. But I would just love for you to take us inside of that and how you think about that.

Shannon McGovern [00:05:17]:

I mean, there’s a lot there, right? And just for the purposes of those listening, we simplify it because it is complex and there’s a lot. But we’re all about how do we enable organizations with our tools to manage their people, their money and their inventory, right? Like those are three pretty important things, right? And so we do all of that. So HCM, financial planning, supply chain, et cetera. I think the transformation journey really begins with the evaluation and if to get started on the right foot, there has to be an articulation and clarity across an organization as to what are you trying to accomplish, right? What are you solving, what does great look like? And that has to happen upfront in the evaluation and the stakeholders, those key Personas across CFO, CHRO, VP of supply chain, et cetera, like, all have to have alignment on what we’re trying to accomplish as an organization. I don’t think moving to the cloud is magic, right? The real value is how the technology is going to help you to transform your operations. And so as you’re beginning to articulate that, you got to think about the outcomes that you’re expecting to see. So how is this new system going to help to shorten financial close or improve your payroll processes, right? Like, how can all your decision makers get access to the same information and reports and analytics? And what do those look like? What do they need to make those decisions that are really important? What’s the mobile experience going to be like? Who’s going to have access to it? What is that going to enable as a result of it? From nurse managers having access anywhere that they are off the floor to the inventory text who are picking supplies? How does the system help to simplify integrations and software updates? We just talked about app consolidation, so I think you think about the pain points, how they’re doing it today, and get really specific as to how the system you’re evaluating is going to help to solve those. A lift and shift to the cloud doesn’t create any real value or transformation, right? Unless you’re thinking about the operations that you’re enabling along that journey.

Shannon McGovern [00:07:13]

And then I think as you’re making the considerations of what’s most important, it’s not just choosing a tech stack or a tech solution, it’s choosing a partner and a vendor that you’re effectively getting married to, right? Like these are 1020 plus year decisions, and so who you choose to do business with is really important. So trust is essential. Values are critical to the values of the organization that you’re evaluating align with your own. How transparent are they during the sales cycle? What’s their track record of getting customers up and live? How likely are they going to keep their promises and deliver on the roadmap. What is your influence on that roadmap and what may be coming? So I think those are all really important things to consider along the journey. And then you gotta talk to references, right? Like what I found in healthcare is it’s a fairly tight knit community. Everyone kind of knows everybody. So it’s not just about who do we as a vendor, provide to you, but who do you know that’s leveraging it today and what’s their experience been, right? Because that’s where the real proof is.

Shannon McGovern [00:08:17]:

And to me, it’s not a matter of when there’s a bump in the journey, it’s a matter or like not if, but when, right. You’re inevitably in these digital transformations. You are going to hit some sort of bump or challenge or tough decision. And so it’s like, how does that partner show up? What’s the level of communication, transparency, speed at which you’re working to solve that, working to come up with a solution or a workaround. Like that’s the most important, I think, piece of all of it, right? Theoretically, everyone’s going to check similar, like functionality, but I think some of those other things in the culture of the organization is what creates true differentiation.

Ben Hilmes [00:08:53]:

I spent 22 years at Cerner and we talked about that a lot. If you actually took the top three or four emrs and you put them side by side functionally, they’re all going to have a lot of similarities. And the differentiation in many ways is about exactly what you talked about. The trust, the partnership, and what happens when something doesn’t go as planned. So I love that. I love that, I love it. And so I’m going to put finance off to the side, but I want to go deeper into one is workforce and two is supply chain. So workforce by far still the biggest spend and yet one of the biggest pain points around.

Ben Hilmes [00:09:31]:

Shortage played out significantly during COVID and forced health systems to go to contract work and pay exorbitant amount of fees. We were three x of our budget on just nursing. What questions are you getting from health system leaders? How are you responding to those things both around the overall spend on workforce, so that efficiency, the overall optimization of workforce, and then two, how do you help me become more efficient around doing more with less? Those have got to be in every conversation you guys are having.

Shannon McGovern [00:10:05]:

They are, yeah. So I think from a clinical staff perspective, there’s two maybe key focus areas that we think we can help deliver incremental value and or experience. I think the first is how do we make the clinician’s life easier? They’ve got a lot that they’re responsible for. Burnout is a real thing. Right. And then, like, how do we retain great clinical staff, and by that support, their continued professional growth and development? So I think HCM can have a huge impact on both those areas. One, there’s the faster onboarding piece. How do we bring new clinical staff into the organization and get more support on the floor faster so we can, like, address burnout or get ahead of it? Banner Health is one of our customers, and they reduce their onboarding from 14 days to seven days when they went live on workday.

Shannon McGovern [00:10:54]:

It’s not insignificant. Nebraska medicine is another one. They reduce the onboarding time by 75%. So those are meaningful impacts that have a direct correlation to one, the experience, but to the balance sheet. And then I think there’s, you know, we talked about nurse managers, and they have supervisory responsibilities in addition to being on the floor with patients. So how do you enable them with tools. Mobile. Right.

Shannon McGovern [00:11:18]:

To be able to do the things that they would normally have to do behind a desk or in an office, like out and about on the floor. CIO of Northeast Georgia Health System, who’s a good friend of workdays, has told the story about going live on workday and watching a nurse manager was able to actually leave the floor, come over to a new facility opening, and be able to leverage her phone to do the approval she needs to do there on the fly. Right. So the business doesn’t stop, but you’re giving them some more freedom and flexibility. SFM health increased the time that HRIs spent on strategic work by 70% and then increased manager self service by 20. So they’re just meaningful numbers. If you’re freeing up time to focus more on strategy, you can put the right programs in place and be thoughtful about how you’re creating that professional development. Right.

Shannon McGovern [00:12:02]:

And growth for the nurses and thinking about maybe what those paths look like and enabling that instead of doing the more tactical processes. Right. And so I think workday is really helping our customers in those key areas. And, you know, the other thing I was gonna say adventist health, I don’t think the California. One of the other. Adventists health. Yeah. Orlando.

Shannon McGovern [00:12:21]:

Yeah. They told us a workday helped to provide professional growth opportunities for their supply chain teams. Right. Keeping them engaged, keeping top talent retained within the organization, because you’re providing more for them to be able to invest in themselves. So I think those are key ways from a workforce and HTM standpoint that we feel like we’re making a difference in the market.

Ben Hilmes [00:12:40]:

Wow, really cool. The thing I think I love the best out of all that is it’s not you talking about yourself. You’re saying, look, I’m going to shine best through the reflective light of my clients. So hearing the stories, the difference you’re making, the problems you’re solving with the banners, the Nebraska Methodist, the advent health, etcetera, I love hearing those stories. And I think that’s why you guys in many ways are winning so much in the market supply chain. It’s scary, right? It’s incredibly important. It showed up again. I think Covid exposed a lot of things in a lot of these areas and just the basic stuff, but there’s so many moving parts in supply chain.

Ben Hilmes [00:13:22]:

What’s the secret sauce for workday? What problems are you solving? What are you seeing? What are some of the advancements you’re making, etcetera.

Shannon McGovern [00:13:31]:

So supply chain is certainly a hot topic. And it’s interesting because I think there was a narrative up until the last year or two that workday, it wasn’t ready. And I’m not going to say that’s wrong, because we were playing some catch up, I think. But we made a very strategic decision to purpose built a solution for supply chain in healthcare. That was our commitment to it. And we built it from the ground up of innovation and the speed by which we’re the multiple releases a year and partnering with some of the early adopter customers, we have to inform the roadmap and the things that were really critical helped us really kind of, I think, leapfrog some of the competition in this area. And it’s a key reason why any big system goes one way or the other as they’re making these decisions. Right? Like it’s a smaller part of the overall sort of spend and investment, but it’s like the tipping point of a decision on vendor.

Shannon McGovern [00:14:20]:

And to your point about the pandemic, I think we saw the value of having supply chain as part of the overall ERP solution during the pandemic, being able to give our customers the visibility across their organization into the critical supplies that they needed and react quickly to that. And then even now, post pandemic, we’re still seeing disruptions in supply chain and continued backorders. So our technology helps our customers better manage those disruptions, identify the right alternative products, and now we’re leveraging some of our planning capabilities within the technology to better anticipate shortfalls and be able to forecast demand and match against supplies, which is not new to other industries, but maybe a little bit newer in the healthcare space. We’re also really excited about all the potential that AI can bring to supply chain. So streamlining supply chain processes, simplifying ordering, dramatically cutting the time it takes to create a contract or anticipate those future disruptions. And we’ve been really focused in this area and I think as a result of it, it’s one of the reasons why we’ve been recognized best in class for seven years running. So we will continue to make investments here and listen to our customers in terms of what they need.

Ben Hilmes [00:15:30]:

That’s awesome. I’m going to get to AI in just a second because it’s next and it’s one of those things that everybody’s talking about it. Nobody quite knows exactly where it’s going, what it’s doing, but I think it’s absolutely nuts with that. I think about AI every time we have a podcast. It is a topic and everybody has a different opinion. So here today, I’d love to know the Shannon opinion and relative to workday, how you guys are using it today, but I know there’s got to be kind of a now and a next strategy that you guys are thinking through. I’d love to hear how you’re thinking about that, how you’re thinking about today and how you’re thinking about it in the years to come.

Shannon McGovern [00:16:11]:

So, you know, AI is not new for workday. We’ve been investing in AI for a number of years and we’ve already got north of 50 use cases in production, more coming every day. I think the reason we’ve been able to put so much into production is because we built AI capabilities into the platform, allowing our developers to reuse models and accelerate time to market. I think also it’s interesting workday doesn’t lead from the front with AI, and we’re having a lot of conversations internally that we don’t feel like people understand how we’re innovating and why we’re different. We talk a lot about ethical and sustainable AI, and while that’s important, it’s not the sexy part of AI. So we need to be leading with the value that we’re providing and the outcomes that we’re bringing. But in addition to some of the supply chain examples, other ways that we’re using AI is to identify anomalies across finance, helping the speed up time to close, automating the capture, routing and coding of inbound supplier invoices. I think ultimately AI should be used to dramatically remove manual steps which will ultimately help to reduce cost.

Shannon McGovern [00:17:16]:

Another big area of focus for us has been creating a skills based workforce and using AI to drive kind of this spill, the skills analysis, so identifying skills, matching skills, recommending skills, all of those pieces. What I think is interesting is I think that’s the future. I just don’t think organizations have yet to really figure out what their skills strategy is right. And how do you define that? Because you can have AI help to generate things, but you need to figure out like, okay, what are we going to do with that information? How are we going to use it within an organization? But I think that’s where the future is, which is we have a need and we have these people with these skills. How do we match skills over here to the need we have, right. And be able to create that movement across an organization? Another area is Gen AI. Quite a hot topic. And we announced a handful of upcoming use cases last year at rising.

Shannon McGovern [00:18:07]:

There’s more to come, I think in September when we’re at rising again. But I think from an HR perspective, we’re using Genai to create new job descriptions, develop career growth plans, build knowledge based articles, and then on the finance side, we’re using conversational UI to allow our planning customers to ask questions of the system and quickly get the answers and insights they need. And then the workday assistant to provide like a two way conversational experience for employees to be able to self serve and get answers to their questions and solve problems much easier and faster. So those are a couple of examples.

Ben Hilmes [00:18:44]:

We’re using a lot of the, for the same use cases, even just in our business. So, you know, matching skills to demand, helping use Gen AI to write job descriptions and align on resumes, etcetera. So very interesting. I also think though, your use of AI and some of your current ways of, you know, I’m a big believer that there’s a lot of really smart people in healthcare and if I can facilitate getting the right information to them at the right time, they’re going to make good decisions. So the supply chain examples you were using, if you are putting the right information in front of those people in the workflow, they will make the right decision most if not all the time. So really, really good stuff.

Shannon McGovern [00:19:29]:

Yeah. And I think, I just want to say, I think healthcare organizations are so focused on how AI is going to help in the delivery of care and that’s what they should be focused on. Right? So don’t focus on how to build AI into your erp. Let us focus on how to do that. And use best practices across many industries. Right? To say that’s the other thing healthcare is looking too often is how do we take best practices from other industries that are doing things really well and incorporate that. So I think that’s the benefit and power of having the AI built into the model workday well, and it feels.

Ben Hilmes [00:20:01]:

Like you’re layering it right next to your business challenges around agility, profitability, risk. You mentioned earlier, how am I aligning AI to help accelerate optimize in that space? That’s really, really neat. So every part of one of these podcasts, we call it leader to leader, and part of it is we pivot to, I want to talk with you as a leader, and so I would love for you to describe, obviously you’re with workday, big tech company, you’ve worked at some of the biggest tech companies in the world. You’re at a very senior level. Talk to us about your journey. Take us through a little bit of that rise to where you are. What were some key pivotal things that happened along your career, insights around things that you have taken advantage of to get to where you are.

Shannon McGovern [00:20:46]:

Oh, wow, my journey. It’s funny, I never thought I would find myself in sales or tech sales, although my parents always thought I was. And here I am. And here we are. Or healthcare. It’s all three. I was serving at a restaurant and the VP of sales of a tech company came in and by the end of the dinner he was like, you need to come work for me.

Ben Hilmes [00:21:07]:

Wow. There you go.

Shannon McGovern [00:21:08]:

Mercury car insurance. No, turns out it was a technology company. And then I kind of. He sold me on all the benefits of the business and the industry and fast forwards. I got my start in Silicon Valley. I was in the Bay Area, you know, worked my way up. But I think the pivotal change for me was when I set my sights on Salesforce. I was living in the bay, commuting down every day.

Shannon McGovern [00:21:31]:

I’d been doing that for four years. That was exhausting. I wanted to work and live in San Francisco and Salesforce was like the flagship company. So I joined in 2008 as an individual contributor and went through pretty much every single life milestone, professional and personal. While I was at the company, I got married. I, I had not one, but three children. I moved across the country. I became a leader for the first time, a second line, leaner, a third.

Shannon McGovern [00:21:55]:

And then when I left, I was running North America sales, commercial sales for our healthcare and life sciences business, and it helped to build that up for ten years. So that was a pretty phenomenal experience. Salesforce is an incredible company. That taught me a lot. And then I was ready to do something different. I went to Oracle, which I don’t know that I would have expected would have been in my journey, but I went to go work for someone I really trusted. So as you think about leaders and what makes you successful, the people you work for, the support and advocacy that they provide along your journey is incredibly important. And being a woman leader who’s also a wife and a mom like you need people that are going to support that and you allow you to create the appropriate boundaries that you need to do the work, but also be a mom.

Shannon McGovern [00:22:40]:

So anyways, I went and tested the Oracle waters for a couple of years and it was a good decision, but I wasn’t feeling as engaged as I would have liked. And so when I was thinking about my next opportunity, someone reached out to me who I’d worked for actually at Salesforce, who was leading sales at workday. And this opportunity to lead the healthcare business felt very fortuitous at the time. And the more I learned about the company, the more I realized that it really felt like coming home. It shares a lot of similarities and it’s a culture driven, or I should say culture and core values driven organization. And I think it’s super important for a company to have a set of core values that’s like their north star that everyone understands, can articulate and lives by every single day. I think a company that’s born in the cloud versus one that creates a cloud strategy mid journey is different. It provides a different tech experience.

Shannon McGovern [00:23:33]:

And then I think culturally, being in a place where people are happy, having fun and having customers that are seeing success is really important, especially if you’re selling.

Ben Hilmes [00:23:41]:

Yeah, for sure. Kudos. One an incredible career and it’s, you’re just getting started, I feel, which is phenomenal. But I love the fact that you chose hard things. Healthcare is hard, technology is hard, selling is really hard.

Shannon McGovern [00:23:58]:

So I mean, mommy is hard too.

Ben Hilmes [00:24:00]:

And then you layer on top of that. Yeah, being a mom, being a wife, being a leader, all of those things is really, really challenging. And I just hats off to you for sticking core to your values around balance, advocacy, focusing on wanting to be engaged, focusing on opportunity for you to really excel as a female leader. I love that. I’d love maybe a couple comments around what you’re doing to help other women go into leadership roles. I am a big believer that this industry in particular is starved for more women leaders and so I’d love to hear what you’re doing in your role with your platform to support other women growing into leadership roles?

Shannon McGovern [00:24:42]:

Sure. It’s absolutely a passion of mine, and mostly because when I look around, there’s not a lot of peers that look like me. Right. And fun fact, I’ve never worked for a woman in my career, really? So that’s wild. Although I’ve had some incredible men, which kudos to them, because without the support that I mentioned, I certainly wouldn’t still be doing this. I am the executive sponsor of the Women in Sales Leadership program here at Workday, which is a global organization that currently is all women in leadership roles across our revenue operations business. But I think we’re going to expand out to ics as well as we look to the coming year, because ultimately that’s the transition that we really need. I mean, you know, like when you look at the pipeline and filling roles, it’s moving from an IC into a leadership role that begins that journey.

Shannon McGovern [00:25:28]:

And so I think that’s a missing component for us today. We just launched a global mentorship program, which I’m helping to sponsor, where we are aligning executives and leaders across the business with women who raise their hand and say they want to participate in the program. And we’re doing that kind of cross functionally, geographically. Right. Based on needs and desires and what they’re hoping to accomplish. So I think that creating that network and advocacy is critical at the end of the day. Like, you get jobs because someone is speaking up about you in a closed door, in a room that you’re not in. But if they don’t know you like, they can’t, you know? So I think that’s really going to be a great kind of addition to what we’re contributing as a program.

Shannon McGovern [00:26:10]:

We focus on recruiting and retention of top talent. We focus on professional career development. So bringing in thought leaders and speakers to talk about that, the mentorship piece is really important. So that’s been an excellent program and I’ve really enjoyed it and it’s super rewarding. And then I personally am mentoring people. And then I would say from a day to day, my business is that I run a national team. We’ve got many leaders. We had many open roles coming into the new year for leadership, and I looked at our diversity numbers.

Shannon McGovern [00:26:40]:

Right. And I really put some pressure on my teams to not always take the easy and fastest sort of path to filling a spot, but making sure that we’re talking to a diverse group of people. These are long term decisions. So while we’re running really fast and speed and agility is a key priority to the company. Like, we need to make the right decisions and I want to diversify. And, like, I feel like I’m like, if I’m leading this group talking about women in leadership and I have an opportunity to fill this, I have to make that difference myself and become the example. So I’m really proud of the fact that we’ve brought in three or four new women leaders into our business this year. And then it’s a matter of appropriately supporting them so that they can be really successful in their journeys.

Shannon McGovern [00:27:22]:

It’s. They’re awesome. We’re really lucky.

Ben Hilmes [00:27:25]:

That’s great. Well, you’re definitely walking the walk. You’re an absolute inspiration. This workday is incredibly blessed to have you. This industry is blessed to have you. I really, really appreciate your time. And I really appreciate the partnership between workday and Healthcare IT Leaders. It’s growing.

Ben Hilmes [00:27:40]:

It’s going really, really well, and we couldn’t be more thankful. So with that, we are going to land. And I really just want to say thank you.

Shannon McGovern [00:27:4]:

Thank you. It was so fun. I really appreciate it. Great.

Narrator [00:27:52]:

Thanks for joining us. For leader to leader. To learn more about how to fuel your own personal leadership journey through the healthcare industry, visit Healthcare IT Leaders.com. don’t forget to subscribe so you don’t miss any insights, and we’ll see you on the next episode.