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How To Make The Tech Jump: The CFO Guide

Analysis  |  By Marie DeFreitas  
   January 15, 2025

Looking to upgrade your IT system? See how this CFO braved the pricey transition. 

Switching IT systems is a hefty task, and not one that CFOs are usually ready to take on. But for health systems struggling with operations, especially in revenue cycle, a new system might be exactly the transformation needed to thrive.

UMass Memorial Health CFO Sergio Melgar spoke with HealthLeaders about how his organization made the switch. UMass has achieved Epic's Gold Star Level 10 recognition for its use of the platform. (See how transitioning to Epic helped take UMass Memorial Health from working in disconnected silos with struggling operations, to fluent organizational synergy, and improved margins.)

Implementing an IT system switch is a huge financial (and stressful) undertaking, and CFOs looking to make this change must understand the steps for sufficient preparation. Here’s a breakdown of Melgar’s advice when he was in the trenches of the transformation, including crafting the right mindset, and the key tactics that cannot be overlooked.

Waking Up To the Change

The first step to implementing change is realizing when one needs to happen. If your health system is struggling with poor operational metrics and working in silos, (even effectively), it’s likely time for a change.

To help lead that change with other C-suite execs, CFOs will need to have a clear, long-term, strategic mindset. Melgar says to think about the big picture items. If training will cost a certain amount, that’s that, he says. CFOs can’t think the process will lead to a complete transformation in a year or two. Instead, Melgar urges CFOs to think about everything in the long term. CFOs also must have the resources, and can’t think ‘we’ll just be financially strained this year.’

“That means where's the liquidity coming from?” Melgar says. “So your balance sheet has to be prepared for it.”

Be Prepared for Staff Challenges

Taking an entire organization from one IT system to another is also challenging on a staff level. Melgar says to be prepared for staff challenges with training, but also general change.

“They're leaving their old job and they're going to a new one,” he says. “That is a little bit emotional for some folks because it's not what they know.”

 Melgar says UMass changed a lot of its IT organizational structure, making a few employee changes, but also brought in more experienced staff that had done this transition before.

Be prepared for the cost here,

“You do need to put a lot of money into the training,” Melgar says

The “Continuous Improvement Philosophy”

Another key element to pulling off a successful long-term transition, Melgar says, is logging into the “continuous improvement philosophy.” This pairs strategic, long-term thinking with searching for improvement every step of the way. CFOs may find improvements in places they didn’t expect.

One example Melgar gave was how UMass’ corporate costs were a percentage of the total cost of the transition. While not all corporate structures are the same, Melgar says its corporate structure over the 11 years that he’s been at the organization, has transitioned from most of the services that were previously local.

“So we haven't decentralized,” he says. “We've actually centralized more so conceptually. We are effectively doing more centrally. While that has been happening, our cost of the overhead compared to the cost of the total has dropped.”

Be Patient

The long-term game is filled with speed bumps and barriers, and CFOs must be patient in waiting for financial results. Melgar says CFOs may find themselves breaking through unexpected barriers in this time:

“You'll need to sort of break through more, call it personal barriers, than necessarily the system barriers,” he says.

Melgar said the system itself no longer was the barrier, but barriers arose from the “the human element that is in there and will always be there,” more so than the system.

Melgar says to also be prepared to brave the “valley of despair” in the first year with Epic as it goes live — it will likely be a rough year. With less-than-exciting margins and uneasiness as the organization jumps into the new system with real patients and claims, CFOs will need to practice patience as they wait for the investment to pay off.

The CFO Guide

Melgar emphasized the role his management system played in the transition, saying, “I think our management system is certainly probably the driving force, but without Epic, I think we would not have made the progress that we've made.”

“So perhaps it's been a catalyst,” he says. “I would say that our management system certainly is the key because we were creating ideas and transforming long before Epic. But once Epic went in, it was really the catalyst that I think propelled us to do more and more.”

Three final tips from Melgar and his experience with the transition:

Transform

 “You need to invest in transformation because you don't want to put Epic on the practices that you currently have. You want to transform what you do.”

Keep it simple

Getting too complicated, Melgar says “is a common mistake, because if you do, if you think you can do it better and you customize it, you customize it again. The upgrades become more challenging, just plain and simple”

Modernize

“You have to modernize.” Don't think you're going to put Epic on an old computer, Melgar says. “If you stay current, you're going to ride this to success.”

 

Marie DeFreitas is the CFO editor for HealthLeaders.


KEY TAKEAWAYS

For CFOs looking to switch IT systems, there are a few key elements to keep in mind, according to this CFO.

Sergio Melgar, CFO of UMass Memorial Health, shares his advice from his experience in transitioning his organization to Epic.

Patience, a “continuous improvement philosophy” and sufficient resources are some of the must-haves for CFOs looking to switch IT systems


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