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In late March, state auditors in Idaho released a damning report about a host of issues surrounding the implementation and usage of a state ERP system meant to process health care provider claims for Medicaid patients. The ERP system (which was provided by Unisys, now Molina Healthcare), went live in June of 2010 and was quickly proven unreliable. In addition to the millions spent on the ERP software and implementation, Idaho ended up advancing $117 million to help address the number of providers who had submitted claims with no resolution — money which may prove hard, or impossible, to recover in full.

According to the report, the reasons behind the failure are many: not enough planning or communication, lack of end-user input, design defects, provider enrollment issues and so forth. But what really stands out is the almost total absence of end-user testing. Indeed, the report found that “less than one-percent of total providers were selected for a pilot test” and “neither the department nor Molina know how many claims providers submitted as part of the pilot.” Though they say hindsight is always 20/20, it seems pretty clear that if the state (and Molina) had performed adequate end-user testing, they would have been alerted to problems in the claim management system and delayed roll-out until they were resolved.

So what’s the key take-away here? Ignore end-users at your own peril. This goes for testing, of course, but also for training (which, in the case of Idaho, was sporadic and mismanaged) and organizational change management. Granted, in this specific instance, the end-users were not employees of the state, so the state had less responsibility in terms of defining workflows and analyzing the impact of the new system than an organization typically would, but it had responsibility all the same. No matter who they’re employed by, end-users need training on new ERP systems, assistance assimilating to change and reassurance that someone is there to help them navigate the complexities of the new software. In Idaho’s case, that someone should have been Molina but they themselves even admitted to being “understaffed and unable to deal with the volume of provider issues.” Imagine the mutiny that would have been at hand if this had happened in a company.

The situation Idaho (and Molina) are in should serve as a wake-up call to any government organization or private entity that is in the process of implementing a new enterprise solution: your failure or success will hinge on your end-users. Involve them in every aspect of testing that you can and make certain that their training is up to par and that resources are available to help them both during and after the switchover. And whatever you do, don’t get yourself in a situation like Idaho where you’re throwing money at the problem to make it go away.

It’s painfully obvious that the state (and Molina) would have benefitted from independent oversight from a third-party such as Panorama. A third-party would have seen the glaring holes in the testing procedures and roll-out plans and stopped the implementation from moving forward until the technical glitches had been worked out and the end-users had been trained. Further, our research shows that hiring independent consultants like Panorama to manage ERP deployments significantly reduces total costs. Learn more about our ERP and IT services for both public-sector and private-sector clients.

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