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Thought Leaders In Cloud Computing: Doug Menefee, CIO of Schumacher Group (Part 1)

Posted on Monday, Jan 17th 2011

By Sramana Mitra and guest author Shaloo Shalini

When it comes to giving an edge to businesses through IT, cloud computing is leveling the playing field in more innovative ways than were once conceivable. On one hand, widely popular Software as a Service (SaaS), Infrastructure as a service (IaaS), and pay-per-use pricing models have brought the capital expenditure barrier to its knees, giving a fillip and a more fair chance to startups and SMBs. These models have also brought a larger market within the reach of startups and SMBs, without the need for big sales muscle, unlike large enterprises. On the other hand, cloud has helped large enterprises to reach out to the masses, enabled them to take advantage of their ‘power users’ through social networking, and provided them with the means to sell their market-leading solutions, which earlier could be bought only by those with deeper pockets, in the form of more affordable pay-per-use products and thus harness the long-tail phenomenon.

Irrespective of the enterprise size, across the board, steady technology evolution coupled with the rapid pace of upgrades leaves IT departments grappling with the dilemma of balancing costs and justifications for systems upgrades or newer application deployments that could give their business the much required edge. When it comes to painless, seamless systems upgrades and faster and easier adoption of new technology to replace older systems or manual processes, cloud computing seems to bring some sanity to this balancing act. Easy to deploy, cloud-based solutions are leveling the playing field for technologically savvy vs. technologically laggard organizations across industries, especially in healthcare.

In this interview, Sramana and Doug Menefee, CIO of Schumacher Group, talk about many of the nuances of cloud adoption from a healthcare industry perspective. As we peel through the layers of cloud adoption, in terms of what works and what doesn’t, Sramana and Doug bring to the fore several opportunities or ‘blue skies,’ especially for entrepreneurs looking to success at the intersection of cloud computing and healthcare. What do cloud adopters such as Doug look for in a cloud-based solution in addition to, say, price, technical merit, usability, and solving a real business problem? According to Doug, the driving factor for cloud adoption for Schumacher Group is not necessarily the cost but the value the company gets from being able to deliver solutions in a more expedited fashion for the business users who are going to use these solutions. Of course, the solutions must also fit with their business case. The key here is preserving agility of adoption without losing on anything else that a typical on-premise solution would usually cater to. In addition to talking about blue skies, Doug gives his impression of what areas are not ripe for innovation anymore, especially in terms of time to market for a cloud-based solution.

Douglas Menefee, a Gulf War veteran and technologist, resigned from the University of Louisiana in 1994 to become a pioneer in the Internet economy by co-founding Planet Symphony. Part of Planet Symphony was later acquired by Geocities/Yahoo! in 1998. Later, Doug co-founded Menefee INSIGHT and Yadacast and worked at the Graham Group before joining Schumacher Group in 2005 as their CIO.

Doug is a recognized military, business, and community leader. He twice received the Innovator of the Year Award from the governor of Louisiana, once in 2003 as an individual, and again in 2006 on behalf of Schumacher Group. He is a graduate of Leadership Lafayette and a master graduate of Rapport Leadership International.

Schumacher Group was founded in 1994 and is based in Lafayette, Louisiana. It is the third-largest and fastest-growing emergency medicine management organization in the United States that provides outsourced physician and administrative services to hospital emergency departments. The Schumacher Group is one of the leading adopters of cloud computing technologies and solutions among healthcare companies. It is privately held with 900 employees and half a billion dollars in annual revenues. The company has operations in Texas, Arkansas, Alabama, and Mississippi.

SM: Welcome to the Thought Leaders in Cloud Computing series. All right Doug, let’s get started. To begin, I would like you to talk a bit about the Schumacher Group: the size of the company, the size of their IT operations, core businesses, business policies, and so on, so that we have a context for what kind of a cloud adoption scenario we are dealing with.

DM: Sure thing. Schumacher Group is an emergency department physician management company as well as a hospital management organization. We manage emergency department physician practices and hospital medicine or hospital-less physicians practices across the country. We have approximately 192 contracts across 24 states in the United States. We have approximately 900 full-time employees who work for the organization, with about 2,500 physicians, all of whom are independent contractors. Each of these physicians provides healthcare services specific to emergency medicine and hospital inpatient services to approximately 3 million patients on an annual basis.

SM: Okay.

DM: We are headquartered in Lafayette, Louisiana, and have nine regional offices across the country. The size of the information technology department is about 50 people who work for us, with some outsourced to India operations for the organization. The majority of the IT department is focused on what I call the ‘net new.’ This means innovative solutions or new features and functionality for the organization. We have a very small footprint when it comes to status quo kinds of support for our operations. We are always releasing new features and functionalities for the solutions that we have deployed for the organization.

SM: What is the current revenue level of Schumacher Group?

DM: Put us in the half a billion category.

This segment is part 1 in the series : Thought Leaders In Cloud Computing: Doug Menefee, CIO of Schumacher Group
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