Zafar Chaudry, MD, SVP, Chief Digital & Information Officer, Seattle Children’s
Welcome to healthsystemCIO’s interview with Dr. Zafar Chaudry, Senior Vice President and Chief Digital and Information Officer at Seattle Children’s. In this conversation, we dive into Seattle Children’s journey to modernize their ERP system, exploring the rationale behind this transformation, the decision-making process that led to choosing Workday, and the unique strategies employed to optimize both internal and external resources. Dr. Chaudry shares his insights on navigating complex implementations, fostering collaboration across departments, and balancing the needs of the organization with a commitment to efficient, patient-centered care. We also discuss the importance of acknowledging and compensating internal teams fairly, ensuring the success of major projects while maintaining a culture of recognition and respect.
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Anthony: Welcome to healthsystemCIO’s interview with Dr. Zafar Chaudry, SVP, Chief Digital and Information Officer with Seattle Children’s. I’m Anthony Guerra, founder and editor in chief. Dr. Chaudry, thanks for joining me.
Dr. Chaudry: Thanks for having me.
Anthony: Please tell me a little bit about your organization and your role.
Dr. Chaudry: Seattle Children’s Pediatric Health System is in the Pacific Northwest. We serve Washington, Alaska, Montana, and Idaho. I’m the Chief Digital Officer and CIO, and I’ve been with Seattle Children’s for seven years. I lead a team of 485 energized people, delivering everything from infrastructure to analytics to digital health.
Anthony: Great. Today we’re going to focus on ERP. You posted on LinkedIn about finishing phase one of the Workday implementation. One of the things you mentioned was you wanted the employees of Seattle Children’s to have more of a modern experience dealing with things like HR and payroll. We could start with the genesis of this project. Tell me how something like this comes about, bubbles to the surface, and ultimately becomes identified as a major, major project that the organization is going undertake.
Dr. Chaudry: Part of our discussions at Seattle Children’s were centered around our new strategic plan. And in our new strategic plan, we decided that we needed to have seamless operations. And part of having seamless operations is looking at the key systems you have in your organization and then determining whether those systems are modern enough to do the functions that people expect them to do. We started our journey a few years back with replacing our EMR because that is one of our core fundamental systems; and we identified that the ERP was the second core fundamental system that you needed to effectively run a healthcare organization. We finished the EMR work and then we looked at the ERP. We had been using in Infor Lawson for 15-plus years, but what we hadn’t done was bring the experience to where our internal customers, our doctors, nurses, allied health professionals, non-clinicians needed to use those tools. For instance whether or not we could use those tools in the mobility space, as well as have user interface and ease of use that brought us into the new century, as they say.
These are really big projects. We stacked them one after the other. Workday was selected through an RFP process, and we looked at all the usual suspects in this space – Infor, Oracle, and Workday. Workday was selected by a group of key individuals in our organization that represented people and culture, supply chain, finance, and payroll. It wasn’t an IT decision; it was a decision made by the stakeholders that are predominantly going to run the system and use the system. They decided overwhelmingly that they liked what Workday had to offer. I looked at the business case and the financials to say it was a competitive deal. We decided that we were only going to do the work with Workday if they agreed to do the implementation themselves, not use the third party.
That’s the journey that we embarked on just over 12 months ago. When I said that we had gone live with phase one, which we did just over a month ago, phase one for us was implementation of payroll and the module within Workday called Human Capital Management, which in effect is your HR people and culture piece. Of course, it’s always important that when you Go-Live with an ERP, you pay people correctly, and I’m very pleased to say that we have paid people correctly consistently now three payrolls in at a hundred percent. That’s important because you don’t survive if you don’t pay people correctly. It’s been a long journey, 12-plus months to get to here. Phase two will allow us to implement finance and supply chain, and that’s another 12-month cycle of work. It’s not only just putting in a system, but we’ve also looked at all the different processes we’ve had in those particular areas and tried to bring those up to the latest modern principles of working in HR as well as payroll. We of course brought in some tools that the new product had around bots and AI, so that’s also been useful. And we now have a mobile app, which allows most people to do most major functions on their handheld device, which has been a huge success as well.
Anthony: Very good. Let’s drill down on a couple of things. One thing you mentioned specifically to go forward with Workday, they were going to do the implementation themselves and not use a third party. Can you tell me a little bit more about that dynamic? One of the questions I was going to ask you was about the role of consultants for these kind of projects. I assume usually it’s a three-legged stool with the health system, the vendor, and consultants. But tell me a little bit more about this requirement that Workday do the work themselves. How would it usually work if you didn’t put in that stipulation?
Dr. Chaudry: Typically, people buy a piece of software of this size usually through an RFP; and then they select an implementation partner, which is usually a third party. It could be one of the big fives. It could be someone more local but has Workday certification. And then, in addition to that, people supplement their own internal teams with additional consultants. The strategy we followed is we bought the software, but we asked the vendor in the RFP that they should give us a fixed price engagement, and their own people should do the implementation piece as our implementation partner directly, which they agreed to do. They don’t do many in a year, but they agreed to do ours. And I thought that that was important because the vendor will know their software the best and will also keep costs down because we were asking for a fixed price bid for that implementation, which we successfully received.
On the internal side of Seattle Children’s resources, we have used Impact Advisors for a couple of consultants, but predominantly what we’ve done is try to seek individuals who were recently completing Workday implementations and ask them to join us full time on what we call two-year long-term contracts. And that means they become our employees; they work for us sometimes remotely, but they also get a full benefits package. It allows us to pay them a significant amount more than a regular FTE, but at the same time something competitive to what they would’ve gotten from a consultancy, but more of a job guarantee for two years. And that was quite well received in the market.
So that’s how we’ve supplemented our internal resources, and we continue to follow that model. But when we can’t, we have to still use a third party, but it’s kept our cost down. We haven’t been able to source a hundred percent in this particular model, but a large percentage supplemented by people from other consultancies. The hiring process of resources we needed internally has been driven by a panel-based approach of all the stakeholders representing each one of the areas that we’re implementing. It hasn’t been IT just selecting a partner, it was very much a panel of IT people in culture, finance, supply chain, payroll, and when we reach consensus on that panel is when we would employ. And that’s worked out well for us and that’s the methodology we’ve used consistently the last 12 months.
Anthony: Very good. You mentioned these individuals who were coming off Workday engagements that you were looking to hire for sort of two-year stints. Who, in your scenario, were these individuals working for when you hired them?
Dr. Chaudry: They were working for consultancies, but they were completing projects at areas like most recently St. Jude’s; and St. Jude’s research hospital is very similar to how our workflows work. So it made sense to source those people because they would understand how the pediatric system needs to be set up. When you look at all the different implementations of Workday, there’s many now. It’s a very popular product in healthcare. You can go to folks that are coming off those projects and say, ‘Are you interested in a full-time job that could guarantee you at least two years’ income? Or do you want to go back to a consultancy and work for a consultancy?’ The problem is a lot of consultancies won’t necessarily give you full benefits package or guarantee you work because it’s piecemeal, hourly-based work in a climate where jobs are becoming more difficult, the tech industry is laying off more people. Sometimes people need some sort of assurance that they’re going to be in one place, and of course, most importantly, people need a benefits package. Healthcare’s important to people personally.
Anthony: These individuals that work for consultancies that had just come off an engagement for that consultancy, you were able to offer them something compelling to come be with you for a couple years and do another Workday project. Is it sort of like then you’re done in two years or then we’ll see in two years?
Dr. Chaudry: Well, it’s more like we will see, right? Because fundamentally, once you are implemented, then you have to operationalize and sustain. And so the question is, are they really the type of individuals who get very excited about doing an implementation and getting that adrenaline rush to completion, and then they want to go and do it again? Or do they want more stability after that and want to work operationally?
We have options, and this was sort of the brainchild. This project is led by my senior director of business applications. She had come up with these interesting models as to how to source resources, because my challenge to her was, I want you to be as lean as you can in this project because right now for healthcare organizations every penny counts. And so she’s been executing against this. It’s always good to have good people that can execute on your behalf, and then you can take some credit for that. But the reality is, it is my team that’s been working really, really hard to get us to where we are.
Anthony: And you called her out in the LinkedIn post by name. You specifically called Stacy out. So you’re not opposed to giving credit where credit’s due?
Dr. Chaudry: No. I’m just here to steer the ship, but the ship will run a ground or hit an iceberg if you don’t have the right people steering that ship and checking and double checking everything is going correctly. And we’ve done a lot of work. She and her team have done a lot of work partnering and getting ownership of this project. Even though it’s pretty much IT led as a program, it’s been very collaborative and she spearheaded that for me.
Anthony: I did an interview with one of the KLAS analysts who had done a report on Go-Live resources that was mostly focused around EMRs. It made me think of what you’re saying about how if you’re going to do one of these projects, understanding the condition of the market with respect to those resources, those finite and in-demand resources of the consultants is very important. It’s not inconsequential. You need to understand what premium is out there and how much in-demand it is, and you need to understand generally how many organizations are going live right now. This may be a terrible time to try and find resources. I never had thought about how in tune to the market and the available resources on the consulting side you have to be as a CIO, and that could even affect your decision of timing with a project. Is that correct?
Dr. Chaudry: Absolutely. Because the number one consultant right now in the marketplace is a Workday consultant. I mean, they’re like hotcakes. Everybody wants them. Everybody needs them. There’s probably not enough of them. And what they’re commanding in, what consultancies are asking for hourly rates is, I would like to say eye watering. It’s like peeling an onion. So you do have to be very conscious about what’s happening in that space. At the same time, you have to understand that many individuals are at different points in their life and career and they have different drivers.
So some people may have spent 10 years in consulting for Workday-type projects and then want to slow down, stay at a particular place and know that they have a guaranteed income. Because when we hire consultants with consultancies, they literally are time and materials on an hourly basis. And you could have them for 90 days and say, “Look, I’m done. I don’t want this particular individual anymore,” and that impacts that particular individual. Whereas if you are a LTE – a long-term employee, that’s a guaranteed two years of work. The only time you could lose that work is if you have a performance issue. But usually consultants that take LTE work don’t tend to have performance issues because they’re just doing what they do – implementing Workday over and over and over again. Chances are that if you’ve done it a few times, you might actually be able to ride that whole course on the rodeo.
So that’s how we look at it, it depends where you are in life. If you are at a particular point and you need to also get some medical care for yourself, then you need a benefits package. So people look at it and say, well, okay, I’ve got some things that I need to take care of and those will also get taken care of because I’m getting great benefits package from a health system as part of that LTE role. So I think when you’re looking at Workday and resources and you’re doing this project because many are, there’s no harm in thinking of multiple ways to get to where you need to be. So yes, of course, you’re going to use an implementation partner; of course, you’re going to use some consultant, but think about other ways in which you can encourage people to come and work for you. Or you can even offer your own teams an incentive to deliver the program, which is what we did.
The other thing that we built into our program was a bonus for our existing staff to hit milestones; and as they hit milestones, a payment would be made – not huge but a gesture that says we recognize you are doing this work above and beyond, and as you hit this milestone you would be recognized for that. And that also helps, because the bigger challenge in these programs is if we’re willing to pay consultancies a large percentage of money, but we’re not always willing to recognize and reward our own individuals that do a bulk of the work as well. We tried to find that balance that was allowed within our terms of operation and also recognize the amazing work that the teams have done over the last 12-plus months. It’s no small feat to make all these things happen, configure correctly, and then Go-Live with such a huge success that we’ve had. And during Go-Live and post Go-Live, we didn’t have a lot of tickets. We had maybe 200 and tickets, and now we’re down to under 50 tickets of things that need to be tweaked. So that’s not a lot of issues with such a big Go-Live, and that only happens because people are vested and you recognize them and they’re putting in extra effort. So I think you have to think of different ways to get through these programs.
Anthony: Yeah. It’s an interesting point you make about the internal employees doing the work on the project, working perhaps alongside external consultants, who are probably making quite a bit more and the internal employees may know that. And so you’re trying to deal with that by some financial compensation with bonuses because everybody knows what’s going on. They know the person sitting next to them is making quite a bit more, and you’re just acknowledging that in the best way you can, correct?
Dr. Chaudry: Yes. Which is what we do as an organization. The first step in any 12-step program is admitting what the problem is, right? And the problem is if I’m sitting in a room right next to a consultant who makes double what I do on an hourly rate because our organization is paying them that hourly rate for their skillset, and you don’t acknowledge the internal staff in any way, shape, or form, then is that going to cause resentment. By making a small gesture to acknowledge that you are also a hundred percent all in on this project, and here is a small gesture of goodwill, but we are going to link it to multiple milestones so that the goodwill doesn’t run out, right? You get that gesture of goodwill at each milestone. It’s great for an individual because that tends not to happen in healthcare. What we tend to do is reward the consultancies and completely forget the people who are going to stick with us after the fact whether it’s successful or it’s carnage, they’re still going to stick with you and work through those problems.
I’m a huge advocate of recognizing where problems could arise and then trying to find interesting ways of deflecting any other problem that could arise from that. That’s how we’ve consistently done it. And that’s how we did our last project; that’s how we’re going to do this one, that’s how we’re going to do the next one. Recognizing people really does make a difference.
Anthony: It made me think of traveling nurses. You hear about them commanding incredible rates. So you’re the local nurse, and you’re working alongside a traveling nurse who’s making four times what you’re making, that’s tough.
Dr. Chaudry: Yeah. Because in that nursing environment, you sort of followed that track. People were flying in, making three times as much, and then posting TikTok videos about the new convertible they just bought because they’re making that much money. I mean, people see that uptick. I know my clinical colleagues here did a similar program to retain our nurses that we did have in-house so that they could understand the differential. But yes, I mean, in any business that you are in, the optics are really important if you want to continue to have buy-in from your teams. You can’t acknowledge teams, tell them they’re amazing, tell them you’re grateful for them, and then show them gratitude by overcompensating in a consultant who’s sitting there grinning and smiling at you on the next booth next to you. You don’t want to do that. That’s an oxymoron, right? At the end of the day, CIOs must understand the culture of their teams and they must understand what they are thinking to try and offset.
Now, I can’t say that I could solve for every use case, because I can’t. I have rules and regulations I have to follow, but I can still say I tried and then tell my team I tried to acknowledge or I tried to do something different. And hopefully, their takeaway is I’m not the tyrant they might think I am, right? So that’s really important.
Anthony: We need to get beyond the coffee coupon at the cafeteria, right?
Dr. Chaudry: Yeah. It’s great to give coffee coupons. And the other thing we learned in this program is if you keep people well fed, they do more and more work. So we actually started a really good job of catering. I used to chuckle with her and say, “Hey, that’s a lot of catering” and she’s like, “If you keep people well fed, they’re going to do a good job” and I’ve seen that. You acknowledge people; you keep their fuel, their energy burning; and it takes pressure off them. So they can just keep doing the work that you need them to do on a project that you really don’t want to slip on in terms of budget as well as timelines.
These are all really important because how many cases have you seen, Anthony, where these programs are way over budget and they’re late and all kinds of shenanigans are happening. No, we don’t try to do that at Children’s and it’s really important because I always use the metric that $276,000 is what it costs to treat a kid with cancer. So for every $276,000 we overspend, that’s another kid who can’t get treatment for cancer. That’s how I run my metric. So I don’t ever want to overspend on a project like this because that will impact patients directly. IT in any health system is a big L in a P&L business, right? They just give me money, I don’t really give them money back. So I don’t want to get any more money than I need to do the job that people ask me to do.
Anthony: Your philosophy around spending isvery meaningful. You work to instill that in everyone who works for you, I would imagine.
Dr. Chaudry: Everyone in my team knows the numbers. Every time we do a vendor contract, every time we buy a new piece of technology, we use that as the litmus test – do we really need to spend this money because this money could impact patient care. And it’s taken time but the teams completely understand that that’s how I’ve always thought. Because I started my career as a clinician, so I have to be thoughtful. It’s great to have the next shiny toy, Anthony. Everybody wants it, I want it too, but I don’t want to go and buy something that costs millions of dollars, may not have a huge return for the org, doesn’t really bring a lot of benefit, and then realize that was money taken away from uncompensated care because we have a plan here where if you can’t pay for the care, we will use our uncompensated funds. But if the funds run out because IT bought another $10 million shiny servers and storage or something to that effect, then that is going to impact a parent who has a sick kid. And if you have to put yourself in the shoes of that parent or caregiver, how would you feel if we told you that, “Hey, we just spent the last few dollars on an IT solution. Really sorry can’t help you out.” That would be heartbreaking.
Anthony: Do you find that consultants, vendors, organizations that you’re engaging with, do they often need to be called to account? Does it happen often where the billing is not what was expected or egregious or out of control with either vendors or consultants and you have to call them on it?
Dr. Chaudry: No, I don’t think we found that. If you don’t actively manage your ecosystem, will people take advantage? Of course, they will, because they’re in the business of driving revenue for themselves. They don’t try to do it on purpose, but you can consume more resources in these types of projects than you may need unless you keep a sharp eye on it. And I say that my team has done a very good job of financial stewardship because I think in the back of their minds, they understand the impact of overspending. Many of them are parents of kids that come to our facility so they understand what that cost of the dollar is. And I also take the time to relay this to every vendor I do business with. I have a very heart-to-heart moment with every single one to say, “Make sure you (a) bid the lowest you can; and make sure that when you charge me, you don’t overcharge me because if you do, you could impact someone’s kid’s life and it could be your kid.”
That’s really what it is. It’s a life and death scenario working in healthcare. And it’s hard in America because there’s no socialized medicine. It’s not like being in the UK where you can get your care, whatever that care is, but you get it. Here, it’s very much if you know somebody that gets ill, even with good health insurance, there’s going to be a massive co-pay that comes out of your pocket. If you can’t pay that, your family member, your child, you yourself may not get treatment, which then may mean you remain ill. We have a chronic illness problem in every country – diabetes, high blood pressure, you name it, asthma in kids; they’re really expensive. I see people in pharmacies standing in line all the time walking away without their medication because they don’t have the money. They have to make a decision between their co-pay or the groceries, and they’ll always pick the groceries because they have families to feed. That’s the reality of being in healthcare.
By creating a culture where you explain to your teams, “Please think this through.” I’m not saying we don’t spend on technology, we’re forward thinking, we innovate, but please triple think do you really need that resource. Do you really need that next shiny box? Do you really need that laptop? And if you don’t, then we can spend it on something else. If you do because it’s required to do your work, which would still also impact patient care, then yes, we would spend it. But I think asking yourself that question multiple times is not a bad idea. And it’s no different than what we do in our daily lives, Anthony, right? Every time we pay our bills or we buy something, we look at how much income we have and how much we can afford and should we really do it and how will it impact our family and our lifestyle, right? So why would you not bring that to work?
Anthony: Great point.
Dr. Chaudry: Checks and balances.
Anthony: I’m going to ask you two more questions because we’re already at time, unfortunately. My first question is this: Stacy Thornton is the woman you recognize for really leading this, doing a great job. For your peers, how would you describe her title which is senior director of business applications. For your peers, if you were giving them advice and you need someone in this role, what are some of the characteristics that this person needs for their ERP project.
Dr. Chaudry: Title is irrelevant to me, the reason why Stacy’s the one leading this is because she is someone who is very business-minded, is hugely collaborative and can bring people together. You need someone who can deal with conflict because there will be conflict. Someone who can deal with politics because healthcare is absolutely strife with politics. And someone who understands finance so they can balance their books and keep the project on track. And most importantly, somebody who can bring the business on board and influence, not force, but influence the change in behaviors. So it’s quite a unique type of individual that you have to find. And you can find those individuals in many health system IT teams but they may not be a VP. They may be someone young, up and coming, bright, who is showing those traits, who’s done a couple of big projects but needs to get their teeth into something bigger.
And I think it’s really important that when you’re doing a skills analysis of your team, we use the nine-box method here at Seattle Children’s. Take some time, when you’re self-reflecting as a leader in IT, to take a look through the ranks of your systems as to who are the next aspiring people and do your nine bucks or whatever you need to do and try and identify people. So that’s what we have in the person leading the project. I am the executive sponsor, yes, with my chief people officer, but at the same time I’m just only the escalation point. I’ve picked an individual and she demonstrates these traits and has led us through the murky waters that is ERP. It’s interesting because it’s like quicksand; you can get swallowed really quickly.
Anthony: Very good. Last question, final piece of advice. Someone in your position at another health system at the beginning of this kind of a thing. What’s your best piece of advice to get that person going in the right direction?
Dr. Chaudry: Well, I think it’s really important to build good relationships with vendors as you are embarking on this journey. You can’t come in at this with an attitude. You really need to be collaborative even with the vendors because this is a partnership, right? Very long partnership, probably longer than a marriage. And then the other thing to think about is work closely with your CFO to figure out whether the finances actually stack up. Is this going to be truly affordable for your health system depending on what your financial position may be because it’s a long journey and a lot of investment, some eye-watering amounts. And then secondly, you as the CIO or chief of technology in your health system, you still have to own it and you’ve got to be the evangelist of it. And you have to go to every team and divisional meeting that you can find to get buy-in from the collaborative point of view, the stakeholder point of view. It’s really important to do that.
And then if you take all those steps and hire the right people in to lead the program, you’ll have success and then you’ll hit budget or under budget and you’ll hit time. Don’t try to spend too much on the program and don’t try to delay your timelines because then it becomes really painful. Any program of that lasts longer than six months, people lose interest in. So you’ve got to be really focused to get it done especially when it’s a 12-month, 24-month program.
Anthony: Dr. Chaudry, this is great. I think it’s going to be really useful to anyone looking at this ERP-type work. And as you said, it’s not uncommon out there right now. So thank you.
Dr. Chaudry: Thank you for having me.
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