Bas Leerink new Health partner at IG&H

By | Health, News | No Comments

On January 1, Bas Leerink will join IG&H as a partner. Leerink has in-depth sector knowledge about healthcare and wants to use his knowledge for the benefit of the patient.

Leerink previously worked as a director at health insurer Menzis, and afterwards as chairman of the board at top clinical hospital Medisch Spectrum Twente. At the time of his appointment in 2013, the hospital was facing difficult times; it came under strict supervision, while at the same time a new hospital was being built. In the last six years, Leerink focused on more transparency and received a lot of praise for doing so. Presumably, the organization is currently doing very well financially. Leerink has also put Value-Based Health Care on the agenda, together with the other Santeon Hospitals.

He wants to apply this knowledge to healthcare institutions and insurers in a broad sense. On his move to IG&H, Leerink says: “There is a lot to do in healthcare. Society expects better services, continuous introduction of new medical techniques and medicines, more “joint decision”, and more possibilities for healthcare at home, at the same cost. For me, the continuous focus IG&H places on the end-user of healthcare or health insurance is an important reason to make this transition. Besides of course the team of people with whom I will be working. “

Omnichannel distribution network design

By | Casestudys, Clientcases | No Comments

What were the client’s needs:

Due to crucial organisational changes, increasing online sales volumes, and continuous developments in the commercial propositions and product range, there was an apparent need to restructure the distribution network in order to:

  • Accelerate the desired commercial proposition
  • Support the omnichannel fulfilment ambition (for example with entirely interchangeable online/offline distribution channels, shop pick-up, shops storage)
  • Improve the efficiency, costs, and capacity of the distribution centre

What was our approach?

  • In collaboration with the management, we established the scale of the commercial proposition in order to facilitate it by deploying the new distribution network (e.g. the number of SKUs, channel mix, product features)
  • Development of a growth model for logistic volumes
  • Assessment of the current distribution structure, identification of problems/bottlenecks, and the execution of a fit-gap analysis with the growth model
  • Development of future warehouse layout, automation options, detailed processes, and IT/WMS requirements
  • Development of the business cases for every scenario, including the required investments and reduction of costs
  • Facilitating boardroom decisions

What did we achieve?

  • We developed a solid omnichannel concept for the distribution centre where inbound, storage, and picking activities for online and offline flows are integrated and supported by automated processes
  • Substantial cost reduction of 18-20% on the total distribution costs
  • The distribution centre has been structured in such a way that it will not just facilitate the current commercial ambitions but also those in the future

What was the client’s experience:

IG&H pools thorough logistic expertise and combines this with a pragmatic approach for an effective decision forming process based on facts.

How can IG&H help you?

By | Announcement, IGH

Putting your customers above everything and understanding their gains and pains, is our starting point. 90% of your success is in implementation, is our belief. This is reflected in our getting it done mentality and our ability to create flow in your organisation, leading to better results and more happy customers. In order for you to accelerate and sustain change, we help you to build new capabilities and extend your partner ecosystem.

Curious about how we can help you connect the dots? We created a short video to provide you with a crisp-and-clear explanation. Watch it now!

4.8% profit margin increase and data-driven approach for leading logistics provider

By | Clientcases, News

What they wanted
Our client, a leading logistics provider, had an urgent need to increase margin due to a sudden rise in operational costs. The company, which provides logistics services to over 30,000 customers, has a historically dispersed and fragmented commercial setup. Using differentiated approaches to tariffs components, it substantially lacked transparency on how prices were set across a mix of specific services (e.g. delivery and special parcels) provided to its customers. Furthermore, prices had recently been raised, requiring a new approach to increase prices again.

IG&H was asked to:

  • Leverage detailed insight into existing customer-level pricing and setup.
  • Develop a data-driven pricing strategy, starting with an initial campaign where intelligent logic, benchmarking, and margin analyses are used to introduce a more logical and sound argumentation for price increases.

What we did
Our first major step was to create a bottom-up pricing mapping based on the most important service offerings and surcharge components on a customer-by-customer basis. Additionally, we identified operational and contractual KPIs that could provide a basis for customer-specific price increase suggestions and argumentation. Following this, we classified customers to compare product mix and price components like-for-like. Based on previous insights, we developed a logic to intelligently suggest new prices per customer, targeted towards a top-down 5% margin increase.

The second step involved the launch of an interactive comprehensive dashboard for 140 sales professionals. The goal: benefit from the newly gained insights and enable simulations of the proposed price increases. A thorough argumentation for the negotiations was storylined to support the salesforce. This was further elaborated upon during a two-day sales conference, which we also organized to further introduce the negotiation methodology based on pricing evidence and to increase suggestions made by the tool. Furthermore, we ensured that the salesforce received hands-on training and practiced with the tool, providing a solid foundation for implementation in the field.

Our third step consisted of tracking compliance as well as monitoring progress of the entire negotiation process down to the customer and product levels. This provided a foundation for increasing the effectiveness of sales professionals in achieving their goals. Also, it allowed for timely steering on different management levels. Finally, it enabled organic testing of pricing elasticity and implemented logic to refine our proprietary setup in the future.

What we achieved
Within a short, five-week timeframe, we went from collecting pricing-relevant data from various sources to delivering:

  • A 4.8% profit margin increase.
  • Institutionalization of a more sophisticated, data-driven commercial approach to pricing and negotiations.
  • Increased awareness of the power of data science in an inherently complex setting. This was confirmed by a continued engagement in operations. Also, we kept building the in-house capability for this client.

What they said
“IG&H is a very pragmatic and strongly output-oriented consultancy with a strong data science capability. The consultants rapidly understood our requirements and developed an actionable approach, perfectly integrated with our teams and organization, and delivered great results in a very short period of time.”

Data Driven Customer Retention Strategy

By | Casestudys

What our client wanted
Our client, a financial service provider, required factual insights into their customer retention strategy.  A successful customer retention strategy not only relies on predicting which customer will churn at what moment, it also provides a deep understanding of the mechanics driving this event. This allows our client to optimize future customer experiences on an individual level, increasing customer satisfaction and reducing churn.  

What we did
We established a definition of customer churn that defines the moment of outflow of capital, based on a combination of savings depletion, transactional inactivity and account closure. We extracted features to create a complete picture of each customer based on personal characteristics (e.g. age, location), activity in the online banking environment, transactions (type, volume, frequency) and market information (e.g. competitiveness of interest rates). Before starting the analyses, we sanitized the data using robust statistical outlier detection methods. 

While machine learning-based churn models, such as random forests and support vector machines, can capture nonlinear data, they typically yield poorly interpretable results. Classic methods, such as logistic regression or linear support vector machines, are easier to interpret, but cannot capture nonlinearity. However, we found a way to tweak linear models using I-splines so that nonlinear events are still captured and can be properly interpreted. I-splines fit polynomial functions to several subintervals for each variable. Customers that have features in multiple subintervals with an increased risk, adhere to the risk profile and can be targeted with marketing actions.  

What we achieved
We provided our client with essential insights into their customer churn. Combining risk-zones for savings volumes, transactional (in)-activity and app usage we were able to identify an at-risk subpopulation of customers. Using the results of our analysis, our client has started to increase customer retention in a focused manner. 

What they said
“We have enjoyed working with IG&H. We were really on the same wavelength, without any need to explain where our challenges lie. The results of this investigation are interesting, especially because the results are practically applicable, adding concrete business value.” 

Predicting sales using data

By | Casestudys, Clientcases

What they wanted
For our client, a large non-food retailer, promotional folders are essential: a significant revenue share originates from folder products. But sales forecasts were on average off by 100% (volume weighted MAPE) resulting in excess stock, tied up working capital, sharply increased operational complexity and added discount pressure. Our client wanted to move away from an opinion and anecdotal-evidence based forecasting system toward a rigorous historical data driven estimate.

What we did
Using our proprietary data engineering algorithms we started by unifying data from 35+ disparate data sources into an automated and centralized database with a complete end-to-end product level view incorporating 100+ product characteristics, e.g. size, color, and type.

Using our database structure we deployed a collection of gradient boosted regression trees and additional statistical techniques to make product-level predictions of folder sales. We improved forecast accuracy by 60 percentage points. Key predictive variables were seasonality, markdown amount, price, article category and location of the product within the folder.

What we achieved
Given the significant improvement in forecast accuracy, our algorithm was implemented in core business processes. Today, roughly 80% of our model forecasts are used as a final sales estimate. Because of this, the supply chain management team can focus its attention on the remaining forecasts where the math just doesn’t cut it. In these predictions the value is provided by retail sector insidership and other unique human insights.

Our applied combination of human expertise and mathematical precision results in a reduction of 22% in handling complexity, a 20% reduction in excess stock, and – most importantly – the start of a data driven culture.

What they said
“This is pure gold.”

 

OutSystems and IG&H conclude a strategic partnership

By | News

We signed a strategic partner agreement with OutSystems, supplier of the go-to Low-Code platform for application development. We will deploy OutSystems’ Low-Code platform to design our clients’ digital transformation. At the same time, the partnership allows OutSystems to obtain knowledge of the sectors in which we operate: the financial sector, retail, and health care.

Consultancy in digital transformation
IG&H provides large organizations with advice and guidance on the implementation of their digital agenda in the execution of their strategy. From now on, we will use OutSystems’ Low-Code platform when it comes to technology. With OutSystems, we have a solution to replace existing legacy systems and develop additional functionalities with a short time to market. Upon a thorough market inventory – during which all known application development platforms were reviewed – we opted for OutSystems. Like our own office, OutSystems is located in the Utrecht-based Papendorp business park.

Mark Boerekamp, our Partner Digital Technology, explains why OutSystems was chosen as a partner: “OutSystems is the most advanced Low-Code platform of our time, and it is highly regarded by analysts. The platform perfectly matches the sector’s desire to realize technically high-quality solutions that meet the customer’s wishes and expectations faster. Therefore, we are confident that together with OutSystems, we can provide existing and new clients with even better guidance on their digital transformation.”

Low-Code application development
With OutSystems’ Low-Code platform, the development of applications shifts from coding to modeling. Modeling provides visual insight into application development, allowing the business to contribute to the entire development and management cycle of business, mobile, and web applications. This increases the speed of application development and thus the speed of innovation.

Aernoudt Bottemanne, Alliance & Channel Director at OutSystems: “Companies have a growing need for tailor-made solutions to quickly seize market opportunities. This includes companies in the sectors that IG&H operates in: the financial sector, retail, and health care. IG&H is known to be a sector insider and is very good at boardroom advisory. Thanks to this consultancy firm’s sector-specific knowledge, we have gained a true knowledge partner through our partnership. As a result, we can make even better contributions to the innovative capacity of companies within these sectors.”

Want to realize technically high-quality solutions that meet your customer’s wishes and expectations? We are happy to explore the opportunities with you. Please contact us for more information.

Part 3: Blue Ocean Medical Center

By | News

Blue Ocean Medical Center

Part three in the series of our famed fictional hospital as it tries on alternatives to the status quo in healthcare. Let it continue to inspire you to think and act a bit differently and engage with me to find a greater truth. For the extended introduction and parts one and two (‘Hospital without a Home’ and ‘Cells instead of Structures’), please follow this link. Still to come in the weeks ahead: When Prediction meets Precision, Evidence Based Only Please and the Ultimate Medical Mall.

 

Introduction

The mirrored-window facade of Blue Ocean Medical Center, or Blue Ocean Med, only just catches the watery October sun as it sinks below the city skyline. Situated between the edge of a mid-size city and the Atlantic Ocean, Blue Ocean Med is a hub for regional healthcare. The hospital aims to serve the regional community on all relevant aspects of specialist care, offering all regular diagnostics and surgical interventions as well as prevention programs, radiotherapy, e-health and research and development. A truly wonderful organization and a wholly unremarkable general hospital. It is actually almost identical in organization, size and offering to both of the two nearest general hospitals. These also deliver, in about equal measure:

  1. Extensive high-tech facilities
  2. A comprehensive care offering
  3. Fee-for-service
  4. E-health
  5. Qualified and caring personnel
  6. R&D and cutting edge medicine

Blue Ocean Med, like all general hospitals, is struggling with issues of quality, cost and profile. In order to stand out, they know they must make some fundamental changes. But how? What can they do differently with real impact? Can they afford to? And how can they do this without doing the exact same things everybody else is doing?

BOM Three : A Shareholders’ Hospital

How on earth did Blue Ocean Medical Center end up in a fee-for-service environment? Even more importantly: how the hell are they going to get out?! Leaving yet another fruitless bout of negotiating with insurers and local government, the CEO of our seaside general hospital is fuming. How are innovation and ready access to affordable high quality care going to come about when all involved are primarily interested in price times quantity? How was it ever a good idea to start saving cost by putting incentives in place to produce more and more? Key-in ‘fee-for-service’ on your I-pad and this is what you’ll find (Wikipedia):‘ Fee-for-service (FFS) occurs if health care providers receive a fee for each service such as an office visit, test or procedure. It creates a potential financial conflict of interest with patients, as it incentivizes overutilization and treatments with an inappropriately excessive volume or cost.‘ Dead right. And because most patients are insured and do not directly feel the cost there is very limited push back to the production itch. This raises the question if ready access to affordable healthcare can be attained by a market model based on FFS. There are both ethical and practical reasons for Blue Ocean Med to start looking for alternatives.

Affordable solidarity

Let’s get ethical first. A regular marketplace functions under three conditions (among others):

1: customers able to make a choice

2: the availability of choice

3: some form of price-elasticity

First –and let’s be honest- most customers (patients like you and me) don’t know the first thing about medicine. One simply doesn’t bridge the gap of many years of medical training, specialization and experience with a Google search.  No matter what the websites and app-builders tell us. So what do we base decisions on? Then there is the fact that when we are patients, we are by definition not in the best shape to make great decisions. The very definition of illness revolves around the lack of control one has over one’s life (Huber). Second: even if we are able to tell the difference between healthcare providers and their proposed services -and admittedly in some cases we are- there ought to be some excess of supply versus demand to yield freedom of choice. There is no such thing. The demand for affordable high quality care is limitless. Ready access to it is not. Try and get spinal surgery for your daughter or your parent into a nursing home and find out. Of course there is self-medication, low complexity care and foreign or private options. But these are either impracticable or unaffordable. Third is price-elasticity. In a market supply and demand vary with price, right? Supply goes up, price goes down. That sort of thing. Now, how does that translate to a situation when we are so seriously ill that we need the services of a general hospital? We don’t have that live-saving stent placed this month because prices are way up? On the other end of the spectrum; there is no limit to what parents will do or pay for the health and security of their child. So price in many cases is actually quite meaningless. It is a failed attempt at controlling cost. Healthcare is fundamentally about solidarity. A market is not. That’s all about supply and demand which inevitably leads to contradicting interests and contention.

Aligning incentives

Popular hybrids are pay-for-performance or value-based healthcare schemes. The proposed ideas are excellent. But they will not achieve the promised breakthrough because the theories do not depart from the fundamental market paradigm. They basically propose checks and balances to a fee-for-service market by adding performance and outcome measures. Years ago, when the CEO of Blue Ocean Med visited healthcare systems in Barcelona Spain, he happened upon a particularly interesting story. It was about the transformation of the former Barcelona Hilton into a general hospital in the late 1970’s. This in itself was a fun and highly practical move. Really remarkable was the finance scheme the hospital adopted. Patients and professionals were actually joint shareholders of the thing. Based on this share and an annual fee, patients received any medical treatment from the hospital or one of its partners. Truly basic medical services were provided by the government. The annual fee of the hospital depended on the financial results of each year. In this set-up connection between patients and the hospital increases and incentives are fully aligned toward keeping everyone healthy at the lowest cost.

Outcome or effort?

This set-up sounds very much like the vertically integrated managed care consortia of today like Kaiser Permanente, only much much smaller in scale. These bigger consortia report impressive cost savings of over 40% (!). In Blue Ocean Med’s case, it is just the local hospital and their regional partners, so the cost savings will be less. But after adopting the shareholder structure, Blue Ocean Med found that when patients have greater access to their physicians and physicians have more time to spend with patients, utilization of services such as imaging and testing decline. With mutual alignment toward sustaining affordable health instead of efficiently delivering/receiving fixed-fee procedures, an environment is created where doing the right things right, first time, every time now reigns supreme. This alignment and sense of shared ownership even helped positioning patients and their families on more level playing field with Blue Ocean Med’s professionals. And all of this could be implemented right away. No more moronic negotiations, no more perverse incentives, no more failed attempts to let a market do a doctor’s job. With the shareholder structure, competition with other hospitals for this Blue Ocean Med is limited to competing for the best patient outcomes at lowest cost instead of delivering the most clinical procedures at the lowest price.

Taking master data management capability and awareness to the next level

By | Casestudys, Clientcases

What they wanted
For its new online platform, this organization wanted to have all product data available and improve data quality. Furthermore, a shift in mindset was required to become data-driven: the value of data should be seen as a relevant topic within commercial business lines and commercial programs.

What we did
We adopted a two-phased approach: while building the fundament, it was also possible to realize short-term impact. Our program was set up around four must-win battles with high client involvement. There was approximately 50 FTE involved, and we needed to enable a cultural change. Furthermore, we encouraged the business through a hands-on supportive approach, creating a highly constructive atmosphere. For example, we organized many workshops and sessions. Finally, our Agile approach provided a solid ICT fundament, focused on prioritized deliverables in sprints. This was combined with the realization of quick wins in the form of process improvements.

What we achieved
Data processes have gone live and product data were 100% ready to enable the online platform. Revenues were around €1 billion in 2015. Four key processes have been redesigned and implemented, resulting in a uniform way of working. Moreover, reports are being generated, and there is reporting governance: operation is steered through both operational KPIs and data-quality KPIs. Also, a clear cultural change has been established, facilitating a data-is-revelant-for-all-attitude.

What they said
“IG&H gave structure to the approach and thus increased throughput significantly. It contributed considerably to establishing the necessary cultural change and attitude towards data and data quality

Strengthening #1 market position of GAMMA in a fast-changing retail landscape

By | Casestudys, Clientcases

What they wanted
GAMMA has been dealing with a >20% shrinking market since 2009. Furthermore, new competition – from online to discount to foreign traditional players – has been entering the market from all directions. Meanwhile, the organization needs to meet fast-changing consumer expectations and needs all the time. The question was: “How do we ensure a future-proof business considering these circumstances?”

What we did
Based on data-driven market and customer insights, we realized a clear repositioning by placing focus on where to dominate, differentiate, or follow the market. Moreover, we translated the positioning into assortment strategy and category business plans. Together, we also redefined and simplified 23 functional categories, bringing them back to 6 customer-oriented experiential worlds. Finally, marketable service propositions were defined, followed by an Agile implementation approach.

What we achieved
We have realized a repositioning strategy in a mere 50% of the regular lead time. The assortment strategy has been renewed, leading to 8% revenue growth. Furthermore, the marketable service propositions de-risked the potential market share decline. Also, the first result of the pilot store has been a revenue increase of x%.

What they said
“We feel that we have full ownership of what we have co-created. IG&H has taken the lead by setting a direction, but has also adapted by listening carefully at the same time. Working with them on the project has been a pleasure.”