Fortis Healthcare Moves to Cloud

By 2015, healthcare had become one of India’s largest sectors ─ both in terms of revenue and
employment. Healthcare comprises of hospitals, medical devices, clinical trials, outsourcing,
tele-medicine, medical tourism, health insurance and medical equipment. According to IBEF,1
during 2008-20, the market was expected to record a CAGR of 16.5% and the total industry
size was expected to touch USD 160 billion by 2017 and USD 280 billion by 2020.

Health care delivery was provided by public and private sector healthcare facilities. Health
care was provided by central, state as well as local governments. It comprised of secondary
and tertiary care institutions in key cities and focused on providing basic healthcare facilities
in the form of primary healthcare centers (PHCs) in rural areas. The share of private sector in
providing healthcare services especially in Tier-1 cities had continuously increased during
2005-15.2

India had a large pool of doctors and nurses, but it still was far below the standards of well-
developed nations.

According to Varun Sood Head, IT of Fortis Healthcare, the healthcare industry in India was
targeting four aspects:

 First, the business here was to cure a person who was suffering from any kind of
illness. It is important to serve the customer with utmost care and empathy,
 Secondly, the experience that the patient underwent. In India, if one person was sick,
many relatives and friends would visit him or her to enquire about health. Though the
patient was being taken care of by the hospital, the perception of the experience was
formed by the visitors,
 Thirdly, only about 5-10% of the entire population had access to good healthcare.
Fortis healthcare believed that a person should have access to services when needed
and
 Finally, consumers of healthcare services in India were cost conscious and hence
affordability became very important. The healthcare services should be able to reach
out to the last strata of the market in a manner that it was affordable.

Fortis Chain of Hospitals

Fortis Healthcare Ltd. (Fortis) was an international chain of super specialty hospitals in India,
Dubai, Singapore, Mauritius and Sri Lanka with 55 healthcare facilities in India. Founded in
the year 2010, Fortis was the largest network of healthcare delivery systems in India.

Fortis rapidly expanded its presence through a judicious mix of greenfield projects,
brownfield expansions, acquisition of established hospitals and chains and by entering into
operations and management contracts with hospitals.3

In Fortis hospitals, Saturday was a peak day at hospitals wherein the load on their applications
increased compared to other days based on the number of patients coming for OPDs,

1 http://www.ibef.org/industry/healthcare-india.aspx accessed on 10 Feb 2018

2 IBEF. (2018). Healthcare. Retrieved from https://www.ibef.org/download/Healthcare-January-2018.pdf
accessed on 10 Feb 2018
3 Vij, S. (January 2009). Fortis Healthcare on an Expansion Spree. Express Healthcare. Retrieved from

http://archivehealthcare.financialexpress.com/200901/market01.shtml
preventive health checks, etc. So the load factor went up every Saturday. They found that it
was cyclic in nature every week.

In view of the nature of growth of company and nature of business, Fortis decided to adopt
cloud (see Exhibit 1 to under cloud computing) for managing its application and data. Cloud
implied that the data as well as, applications will be hosted and managed on sites available
on Internet/Intranet (on TCP/IP protocol) rather than traditional networks (local or
distributed). This would have helped them to reduce the cost of managing infrastructure and
reduce frequent shutdowns and non-availability of IT services when these were needed (the
most).

Fortis chose IBM as a cloud service partner. According to Sood, they wanted an infrastructure
that was scalable, performing, secure and available.” Sood said,

When we started our operations we were four hospitals, today we have thirty-
two hospitals. When we computerize a unit, rather than upgrading technology
as per the requirement, we invest in technology on day one. We have to buy
servers on day one; we cannot add capacity to hard disks, RAMs, etc. on a day-
to-day basis. As a result, our resources were heavily unutilized. When we
purchased hardware, it was not utilized efficiently and by the time we reached
100% utilization, the hardware was out of warranty.

With this approach, within a month the team rapidly zeroed down on the public cloud as its
infrastructure foundation for the future.

Cloud Computing

Sood shared,

We decided that as a company we would go for a single cloud provider on the

infrastructure space. The vendor should offer a complete bouquet of services.
Fortis already had significant engagements with Microsoft and hence they
narrowed it down to Azure4 for the cloud platform in 2014. A formal agreement
was signed in June. Sood said, “It was a risk that we were taking, but it was the
risk we were taking for the partner who had worked with us since long and
who was as invested as we were, in the solution. The partner was just as
worried about succeeding as I was about my business.”

The next decision that the team had to make was on moving the applications on the cloud.
The organization had multiple applications, some stand-alone and others integrated. They
had their ‘data-centres,’ anti-virus software, local apps, local hospital based systems,
accounting software, etc. At the head-office, a corporate data centre was running the core HIS
(Hospital Information Systems), and the core financial systems (including Oracle along with
other systems). The first target Sood set (and achieved) for the team was to shut down the
corporate data centre in the coming four months. Oracle running at the corporate data centre
was moved to Azure in September 2014. Along with Oracle Database, Oracle supply chain

4 Microsoft explains Azure as follows, “Azure is a comprehensive set of cloud services that developers and IT
professionals use to build, deploy and manage applications through our global network of datacentres. Integrated
tools, DevOps and a marketplace support you in efficiently building anything from simple mobile apps to internet-
scale solutions.” at
https://azure.microsoft.com/en-in/overview/what-is-azure/Accessed on February 10, 2018.
and the application services from Oracle were also moved. Moreover, the IT department had
Active Directories5 running of Azure, BlackBerry Enterprise Services, WWW services and so
on. They also had lot of dot-net applications, Active Server pages/JAVA based applications
and Office 3656 platform. Further, they also had Microsoft Exchange Servers, SharePoint
servers, etc. Sood decided to shut most of them and move all of them to either Azure or
Office365.

Sood shared,

We either shut down the applications or moved them to Azure or Office365.We

still have two applications which are key to us which are running internally on
physical infrastructure but in our premises now. The first is ‘TrakCare’7 which
is a hospital information system and the other is ‘Cognos’8 from IBM; we are in
the process of moving them out. We are significantly ramping up our Oracle
footprint; we are going into the entire HR suite, SCM suite and Oracle business
intelligence. Hyperion as a financial management platform and all running off
Oracle technologies.

Further, he shared his future initiatives,

We are moving into a vendor neutral archive for a radiology database,

radiology data system so when you take an X-ray it is stored somewhere that
should be accessible to anyone anywhere. It is very data-intensive. We are
moving that to Azure, we are also building a unified hospital information
system (HIS) which will run on Azure. HIS is the core of any healthcare
organization; it is not only mission critical, but a step above; these are life
critical. This is the system in which a doctor scans a patient’s X-ray, the clinical
results, the prescription, allergies and counter-drug affects, etc. If this system
can run on a cloud environment, anything can because this is critical for
providing care in hospital environment.

Benefits of Cloud Computing

5 “Active Directory (AD) is a Microsoft technology used to manage computers and other devices on a network. It
is a primary feature of Windows Server, an operating system that runs both local and Internet-based servers.
Active Directory allows network administrators to create and manage domains, users, and objects within a
network. For example, an admin can create a group of users and give them specific access privileges to
certain directories on the server. As a network grows, Active Directory provides a way to organize a large number
of users into logical groups and subgroups, while providing access control at each level.” Sourced from
https://techterms.com/definition/active_directory on February 10, 2018.

6Office 365 was an Internet application (cloud services) based subscription pricing model for Office applications
plus other productivity tools. It included plans for use at home and for business sourced from
https://products.office.com/en-in/business/microsoft-office-365-frequently-asked-questions on February 10,
2018.

7TrakCare© was a widely used electron medical record (EMR) application. Sourced on February 10, 2018 from
https://www.intersystems.com/products/trakcare/.

8 Cognos was a business intelligence and analytics produce form IBM. Sourced from https://www-
01.ibm.com/software/in/analytics/cognos/ on February 10, 2018.
 Bandwidth
Security Tools and 10%
related
0%

Operations &
Management
13%
Partner Fee
(Colocation, hosting,
HW leasing, & Cloud)
41%

Key Server Software

Licences
11%

Mail Licences
6%

Disaster Recovery New Physical Infra

0% (Renewals + new
needs)
19%

Figure 1: Break-up of spend on IT in 2013-14

Source: company documents

The immediate benefit of going on a cloud was high availability. According to Sood, the
frequency of downtime in traditional system was 2-4 times per month, and each downtime

was of two hours on an average. With the cloud, the downtime was reduced to 2-3 times per
year and each downtime was of 30 minutes on an average.

Sharing the benefits of cloud computing further, Sood said,

We wanted IT to become a business enabler. We were a technology and inside

focused department, working with servers, software and hardware, and now
we transformed ourselves to a business function. Moving to the public cloud
has helped us transform faster. We were able to fully focus our people on
engaging with business and solving real business needs. It was a decision to
introduce disruptive decisions and we finally succeeded.

It also changed internal business mindsets and it changed them very fast. As
an example, earlier when someone’s email did not work, they called and
enquired if servers were down. Today, if the person does not receive mails,
they call in to complain that their device is not working. Most importantly, by
changing our own mindset and talking to business in terms of business, the
level of engagement and trust has significantly increased. The conversations
are now focused on improving business metrics and are much more engaging.

According to Sood, in financial terms, cloud was a good deal. He said:

 If we compared ROI of moving to cloud, it would certainly come out to be
cheaper. The applications that were taken to the cloud were Oracle financials,
email, Hospital Information System, etc. We did not select all applications to
be taken on the cloud. We took one step at a time and selected application by
application. The selected applications were tweaked for the cloud.

According to Sood, the spend on data centre was USD 1 million in 2013-14. It reduced to USD
300,000 in 2014-15. The spend split of FY 2013-14 into various heads is given in Figure 1.
Further, he shared that in case he had proceeded with architecture, the percentage increase or
reduction in spend over FY 2013-14 would have been as given in column 1 and 2 of Table 1.
The estimates of cost savings that may accrue over the years, if the organization moved over
to cloud are provided in Columns 3 to 5.

Table 1: Percentage Reduction in Spend due to Adoption of Cloud

Expense Head FY 2014-15* FY 14-15^ FY 15-16 FY 16-17
Partner Fee (Colocation + Hosting + 0% -69% -45% -18%
HW Leasing/ Cloud Charges)
New Physical Infra (Refresh + New needs) 100% -100% -100% -100%
Operations & Management 0% -69% -63% -60%
Bandwidth 10% -100% -100% -100%
Key Server Software Licences 47% -100% -100% -100%
Mail Licences 80% 100% 120% 142%
Security Tools & Related# 3000% -100% -100% -100%
DR Related! 1750% -100% -100% -100%
Change over FY 13 spend as base 162% -71% -59% -46%
*Expected percentage increase over FY 2013-14 spend had cloud not been adopted
^ Actual reduction in expenses over FY 2013-14 due to adoption of cloud
#Charges covered in Cloud charges
! required tools and related expenses covered in Cloud charges
Source: company documents

More than the savings that may have accrued from moving to the cloud, Sood was happier
with cloud helping them to move their Capital Expense to Operating Expense.

He added,

The technology has given us the flexibility to scale on demand. When we

owned the infrastructure we were unable to respond to sudden increase in
demand. For example, on Saturdays, we face very high inflow of patients in
our hospitals, as executives come for consultations, health check-ups, etc. The
load increases to about 200% of the normal day’s load. With cloud computing,
we can provide for lower computing power from Sunday to Friday and then
bump it up on Saturday, and then bring it down after a five hours peak load
run. In the traditional model, it would not have been possible to manage this
kind of peak demand without a significant investment in purchasing hardware
and software. From an IT standpoint, we have reduced our manageability
problems, as well as, our overheads; Now we do not worry about capacity
planning, hard disk capacity, RAM availability etc. We don’t have to worry
 about AMC9. By solving this problem, we have shifted focus of our IT staff on
solving business problems. The infrastructure is managed by a partner, for
whom it is the core business. They have economies of scale. In this
transformation, the biggest challenge was to change the mindset of internal IT
staff. The technology experts desire to have the best-in-class hardware and
software, the most powerful servers, large memory servers etc. For business,
having top-edge technology does not matter.

Transformative technologies in Healthcare industry in India

There were some ideas that were transformative from a health care standpoint. The key
system used in hospitals was the hospital management system. According to Sood,

The key questions were: Can it be moved to cloud for rationalizing,

harmonizing and standardizing across the organization? Can we leverage the
cloud from an economics point of view to store a patient’s data there so that a
patient can access it at any given point in time? Thus, enabling a patient to be
involved in its healthcare process and having access to his information
whenever he wants to.

Fortis had piloted remote care monitoring by giving expecting ladies a device that could be
tied across their bellies; it had a sim card inside it which kept on monitoring the health of the
baby and uploaded this information to a health care application provided by their technology
partner. Thus, remote monitoring could be done regarding the status of the health of the baby,
and it triggered alarms, it triggered issues and informed the person when it was time to see
the doctor. This was one good example but on the disruptive side, the patients did not have
access to their health records. Could health care industry work on that? Could it move to home
health? Home health as a context here was an idea companies were working at. Could Fortis
provide care to an individual in his or her house?

Another technology that was being looked at by Fortis was the remote delivery of
physiotherapy. This was expected to bring-in efficiency in the system of healthcare industry
as a doctor would be able to monitor multiple patients by just focusing on a single monitor in
the clinic and the patient could be in the comfort of his/her house, doing the exercises. The
automation of clinical processes such as prescription management, electronic medical records
and integration with advanced technologies such as Internet-Of-Things (IOT) was another
possiblility. Mobile technologies would bring in another set of opportunities and challenges.

How could the new and innovative business ideas be implemented in the hospital? Sood knew
that while the medical fraternity was very advanced in adopting technology in healthcare,
they were equally reluctant to adopt Information Technology. How could technology support
medical professionals in better delivery?

Questions:
1. What Strategic Advantages do cloud bring to the business?
2. What objectives of the organization it serves?

9 Annual Maintenance Contracts

 Exhibit 1: Cloud Computing

Cloud computing and storage solutions provide users and enterprises with various capabilities to store
and process their data in third-party data centres. It relies on sharing of resources to achieve coherence
and economies of scale, similar to a utility (like the electricity grid) over a network. At the foundation of
cloud computing is the broader concept of converged infrastructure and shared services. Cloud
computing, or in simpler shorthand just "the cloud", also focuses on maximizing the effectiveness of the
shared resources. Cloud resources are usually not only shared by multiple users but are also
dynamically reallocated per demand. This can work for allocating resources to users.

The present availability of high-capacity networks, low-cost computers and storage devices as well as
the widespread adoption of hardware virtualization, service-oriented architecture and autonomic and
utility computing have led to a growth in cloud computing. Companies can scale up as computing needs
increase and then scale down again as demands decrease.

Source: Cloud Computing. (n.d). In Wikipedia. Retrieved from https://en.wikipedia.org/wiki/Cloud_computing