Digital Transformation at Carestream

Health1
Carestream Health sought to transform ordering supplies through an online system. The goal
was to convert all customers to the new system, but adoption stalled at around 20%. It had
failed to recognize the complexity of building and implementing a system to serve customers
in 168 countries. Local differences and regulations meant it had more than 168 different ways
of engaging with customers. Carestream revisited its plan to discover how to jointly modify
systems of engagement and the ordering system in order to stimulate adoption. By early 2018,
it had achieved 60% electronic ordering and was planning for 90%.

Heather A. Smith Richard T. Watson

Queen’s University, Ontario University of Georgia, Georgia
(Canada) (U.S.)

Capturing a Picture of Transformation12

Digital transformation is rarely a straightforward process or an end in itself. It is, by
definition, an evolution, with the full picture of what is happening taking several years to
appear as the redesigned organization iteratively adjusts to the various wrinkles of its new
reality. The picture may be fuzzy at first — even to the leaders of the change. Like a tapestry,
digital transformation is achieved with multiple different threads woven together behind the
scenes by several business groups, including IT. Thus, it is only after some time, when someone
stands back and looks at the "good side" that the full impact of what the many different
"weavers" have been doing becomes clear, and the new picture of how the organization will
achieve its goals is made visible. The "threads" in this case study date back several years and
have their origins in different parts of the organization and even different visions for it, yet they
have been stitched together to form a coherent whole. This new picture of Carestream Health,
although still unfinished, is a radical new digital way of doing business in a very traditional
field.

Transforming Carestream Health

Virtual Carestream Health was created in 2007 when Onex Corporation, a private equity
investment firm, purchased Kodak's Health Group, which was comprised of three main
businesses — Digital Dental, Film, and Medical Digital. Each was focused on a particular
market: Digital Dental on dental professionals and their specialized needs; Film on traditional
medical and dental X-ray film and film printers; and Medical Digital on new forms of digital
medical imaging systems and software for hospitals and medical clinics.
"When Onex acquired Carestream the expectation was that Medical Digital would grow
substantially, while Film would decline an equal amount," said Andy Mathews, director of Film
Business Planning and Strategy. "Everyone thought that Film would follow the same steep
trajectory downwards that film for consumers had experienced when digital cameras were

1 10.17705/2msqe.00009
2 Michelle Kaarst-Brown, Tim Weitzel, Jeria Quesenberry and Fred Niederman are the accepting senior editors for this article.

March 2019 (18:1) | MIS Quarterly Executive 85

Digital Transformation at Carestream Health

About Carestream Health

With revenues of $1.8 billion, Carestream Health is one of the top global providers of digital radiography and
computer radiography systems, with a track record for innovation. It has 6,000 employees, more than 600 patents
for medical imaging and information technology, and conducts business in nearly every contry in the world.
Carestream remains at the forefront of numerous technological advancements in imaging and healthcare IT and
is a global market leader in:

●● Medical Imaging and Healthcare IT

●● Non-Destructive Testing
●● Contract Manufacturing, also called Tollcoating or Toll Processing.

introduced, and physical film became obsolete.
Instead, Film declined much more slowly while
the Medical Digital business grew."
As the new company developed, a primary
goal for both business and IT was to generate
cost savings through simplifying processes
and consolidating and reducing the number of
applications to create "The Carestream Way",
where every part of the business used the same
processes and systems in the same way. This goal
was largely completed by the end of 2014. "We
had achieved the 'Holy Grail' of IT," said CIO Bruce
Leidal. "We had a single instance of SAP running
across the entire company and several horizontal
processes such as order-to-cash, HR, supply chain,
and purchasing."
Two years later however, this thinking was
completely re-evaluated. It started in 2016 when
the company's leadership team and board of
directors began to consider how to monetize
the assets it had acquired in Carestream.
"Fundamentally, our senior management and
board wanted to consider the future of our
business, our competitive position, returns to our
shareholders, and whether all or parts of our
business should be kept or sold," Bruce explained.
"We all recognized that something had to change,
and Digital Dental emerged as a prime candidate
for a sale,3 leaving the company with our Film and
Medical Digital units."
The Business Thread
According to former CEO Kevin Hobart:
"Our Film and Medical Digital businesses serve
common markets but have different market
3 The Dental Unit sale was completed in 2017.
dynamics and business models. We had already
streamlined many aspects of our Film business
but we needed to continue to reduce complexity
as the Film market declined and shifted to
smaller care settings and emerging economies.
By 2016, our market had evolved and technology
had evolved to a point that we could approach
business differently. So, with the sale of Digital
Dental underway, we saw there was further
value to be achieved from greater automation of
our Film value chain."
The Film unit sells X-ray film and printers and
film equipment used to produce various images.
Most of its revenue is generated from recurring
sales of consumable film. Although the business
had continued to decline in developed countries
over the past decade, sales were growing in
developing countries, such as China, where
the digital infrastructure was not as developed
and physicians and patients still preferred film.
Film sales had also grown because Carestream
had steadily gained market share from its
competitors. With a mature market and a stable
competitive environment, Kevin and his team
recognized it was time to further rationalize this
business. In contrast, the Medical Digital unit sells
digital radiography, and computed tomography
(CT) imaging along with healthcare IT solutions.
These are highly complex capital transactions
which require considerable effort and cost to
design, implement, and support.
Both business units sold direct and through
dealers to a wide range of healthcare providers,
who are sometimes customers of both units.
Consequently, Carestream had common sales
teams serving most of the 168 countries to
which it sells. These were supported by four call

86 MIS Quarterly Executive | March 2019 (18:1) misqe.org | © 2019 University of Minnesota

centers around the world and a common logistics
network for orders and shipping. However, "What
we came to realize was we had an opportunity to
optimize the Film business with a more dedicated
go-to-market value chain," said Bruce.
Film shared a common sales and customer
support structure with the Digital business even
though, once a customer was obtained, most of
the unit's revenue came from reorders of film
products. According to Kevin - "Our leadership
team had discussed automating ordering and
replenishment of film through a comprehensive
e-commerce solution, and the independent review
of our business units drove this evaluation forward.
We saw the opportunity to create a more efficient,
competitive and sustainable Film business by
adopting new technology and processes to deliver a
better customer experience."
Therefore, in Fall 2016, Kevin asked Bruce to
help the leadership team visualize or frame what
the Film business could look like in the future.
The IT Thread
According to Bruce: "I had been thinking
about digitization for several years. Through
my involvement with the SIM APC,4 I could see
where the world was going, and I knew we
weren't there. We could either build the bus or
get run over by the bus, so I had to figure out
ways to free up some funding to explore how our
back-end processes could be redesigned for this
transformation. That way, we'd be ready for the
business when it was ready." To free up resources
for exploring, investing in new technologies,
and creating the foundations for a potential new
digital business model, Bruce had an arrangement
with Kevin and the CFO that he would generate
enough productivity and savings in IT to cover
any increased operational costs in IT, such as
salaries or administrative services, and that IT
capital investments would be recovered through
reduced operational costs in the other parts of the
organization.
This innovative funding model enabled him to
hire a consulting firm in 2014 to create a high-
level target digital architecture and customer-
facing environment, including a customer portal
4 The Society for Information Management's Advanced Practices
Council is a CIO level executive network committed to sharing
important research, leading-edge practices, and future trends in IT
management.
Digital Transformation at Carestream Health
and digital assets. According to David Sherburne,
executive director of IT’s Connected Products and
PMO:
"To this point, IT had largely been internally-
facing. We had developed point solutions for one
area of the business. Now, we recognized that we
had to use technology to help large parts of the
business work together and enable us to better
connect with our customers. And we learned we
could run the business more efficiently by being
data driven."
"We knew that e-commerce was important
to our business and we had implemented a basic
system about 15 years earlier that was used by
many of our dealers," said Brownlee Field, now
IT manager of Shop Carestream, the company's
B2B e-commerce site. "Now, e-commerce
software became an important part of our digital
architecture." Other components of the new
target architecture included mobile apps, EDI,
web content management, and an IoT platform to
connect the company's film printers.
The next step was the assessment and
selection of software that would serve as the
backbone for any future digital transformation.
By the end of 2015, the team had built a proof
concept store and put in place many of the
foundational technologies that would enable
the new digital business model that Kevin
asked Bruce to envision. "To this point, we were
exploring what was possible in anticipation of
what our business would need," said Bruce. "We
still did not have a complete digital strategy or
business case for going forward."
Framing a Transformation
With lots of ideas but no clear path, business
case, buy-in, or mandate for moving forward,
Bruce took a novel approach to engaging
Carestream's business leaders in planning
the transformation. He and Kevin invited key
stakeholders across the Film business unit to
participate in a series of two-day workshops to
explore all aspects of each Film process from
beginning to end. Each meeting had about six
to nine invited participants including business
decision makers, a consultant with experiences in
other companies, an IT person who acted as note
taker, Bruce, and Peter Lautenslager, Carestream's
March 2019 (18:1) | MIS Quarterly Executive 87
Digital Transformation at Carestream Health

Storyboards1

The storyboarding process, was developed at Walt Disney Productions during the early 1930s. A storyboard is a
graphic organizer in the form of illustrations or images displayed in sequence for the purpose of pre-visualizing
a media sequence (e.g., a motion picture, animation, or a filmed ad). Today in business, storyboards are used
for corporate video production, commercials, proposals, or other business presentations intended to convince
or compel action. Modern ad agencies and marketing professionals create them by hiring a storyboard artist to
prepare a series of frames illustrating a narrative of the idea they are trying to sell.
1
Adapted from Wikipedia, 2018, https://en.wikipedia.org/wiki/Storyboard

director of design from the Marketing
Department.
At each workshop the teams articulated
how a process worked and why, captured the
complexities involved, and then discussed
the preferred way it should work. The expert
consultant was available to short-circuit debates
about best practices and make recommendations.
The IT person would document the process
involved using Visio, which creates flowcharts
and diagrams that could be used later in
development, and Peter would then use all this
information to create a storyboard (see box) to
help everyone visually understand the process.
"We use this method all the time for creating ads,"
said Peter. "But this was the first time we'd used it
in IT."
"Storyboards made the future process tangible,"
said Peter. "And we used them to help break
down complex sales scenarios, so they could be
discussed." As soon as the different steps of the
future processes were nailed down, Peter would
create a visual workflow, with numbered steps, so
that the workshop participants could review and
validate it (see Figure 1). "Many of these scenarios
were not clean and linear," he said. "And we had
to go back and forth and around them to make
the process clear." In the end, these workshops
created 12 storyboards, each corresponding to
a particular future state scenario. Overall, each
scenario took about half a day to agree upon
and these were consolidated into two high level
stories or frames:
●● Electronic Ordering (eOrdering).
This described the electronic ordering
processes for the future Film business, the
technology that would be required, and
how related business processes would be
simplified as a result. It also addressed
the elimination of problems that cause
manual interaction with an eOrder after it
is entered into the order-to-cash process.
●● Connected Customer. This described the
model that would be deployed to simplify
Carestream's management and service of
its equipment around the world. Remote
management services (RMS) would
connect all the company's printers and
enable them to be identified and serviced
virtually and managed print services
(MPS) and self-service kiosks would
provide pay-per-use printing as well as
online service.
In early 2017, these visuals of the future
state of the Film business were presented to
the executive leadership team who agreed to
the vision and authorized Bruce to develop it
further. Bruce then held meetings with the global
functional groups, such as HR, finance, and IT, to
help them articulate an organizational design
that would support the new processes. Then,
it was time to put costs into the proposed new
structure. Each leader was asked to quantify
the costs involved with their part of the future
Film business. "I provided them with external
benchmarks to give them some parameters," said
Bruce. "And in some cases where they needed help, I
brought in consultants to assist."
By May 2017, the storyboards, processes, new
organization design, and costs were all aligned
and were presented to the Executive Leadership
Team for a final go/no-go decision. The new
design was approved and then shared with the
board. "We didn't use the storyboards with the
board," explained Bruce. "We described the high-
level processes that would be involved, but focused
on the cost and benefit projections." With the
board's approval, Bruce and Kevin now had a

88 MIS Quarterly Executive | March 2019 (18:1) misqe.org | © 2019 University of Minnesota

Figure 1. A Sample Storyboard Process
clear vision, mandate, buy-in from business and
IT leaders, and a business case to drive the digital
transformation of the Film business forward. All
they had to do was build and implement it.
Constructing a Digital
Production Model
eOrdering was the first set of processes to
be built. With all of the work that Bruce and his
team had done to put a foundational architecture
and technologies in place, building eOrdering’s
components appeared quite straightforward to
the business, but they still required a great deal
of hard work from the development team. "It
wasn't a slam dunk," commented Brownlee. "We
moved ahead by fits and starts at the beginning.
We had to integrate multiple technical resources."
From IT's point of view the major challenge was
coordinating, not only between development
groups, but most especially with all of the
business process changes needed as the company
replaced its old production model of ordering and
payment for a new digital model.
The large program team with five major leads
including:
Digital Transformation at Carestream Health
●● A program manager who was responsible
for delivering the overall program. She
developed a roadmap of releases, worked
with the executive sponsors, arranged
the funding, worked with the business
to further develop requirements, and
contracted with the outsourcer for
development.
●● A business program manager who was
responsible for all change management,
new business processes, working with
the business stakeholders, training,
communications, running the project
worldwide, and coordinating the
additional business resources needed
for such components as creating the
user experience and adopting common
business data and terms (a pre-stage to
standardization). This was a co-leadership
role with the program manager.
●● A project manager who assisted
the Program Manager creating and
maintaining the project plan, managing
scope changes, tracking financial
March 2019 (18:1) | MIS Quarterly Executive 89
Digital Transformation at Carestream Health
matters, monitoring the deliverables, and
overseeing all stage gates.
●● A technical lead who was responsible
for all software and architecture for
the project and who worked with the
Outsourcing Manager to ensure minimal
customization of off-the-shelf software
and to create statements of work for the
outsourced team.
●● An outsourcing manager who was
responsible for communicating with the
offshore developers.
"This was a lot of oversight," said Brownlee,
"But it was needed or the whole roll-out would
have been chaotic. We had to make sure each of
our teams was aware of what the others were
doing and that they wouldn't step on each other's
toes along the way."
By mid 2017, four pieces of the new business
platform were in development:
●● Shop Carestream. This is the company's
new B2B online store for all film products.
●● Remote management services. This
provides connectivity and location
identification for each of the company's
devices and enables proactive remote
service.
●● Customer registration and activation.
This requires customers to register their
Carestream devices and connect to its
customer portal to facilitate a proactive
device service.
●● Managed print services and self-serve
kiosks. These provide pay-per-use image
printing and automated distribution of
images and reports directly to patients.
In addition, Carestream's existing EDI
processes used by some large customers for
ordering and paying for film products were
adapted to integrate them into the new eOrdering
model.
After a short pilot, the roll-out of Shop
Carestream began in late spring 2017.
If It's Built, Will They Engage?
In its old, non-digital business model, sales
teams serving each of the 168 countries to
90 MIS Quarterly Executive | March 2019 (18:1)
which Caresteam Health sells, processed orders
for both Film and Medical Digital products and
services via one of four call centers. Staff from
these centers then interfaced directly with
end customers for pre-order support, order
placement, post-order status updates, billing,
back office support, rebilling and reshipping,
and field service. "Our teams would process any
order though we had some specialization between
Film and Medical Digital within the centers," said
Keith Call, director of Global Business Operations.
Before the implementation of eOrdering,
almost 100% of orders required some manual
interaction. Orders came in by fax, mail, or
telephone from customers (e.g., a hospital), end
users (e.g., doctors), or dealers. Some dealers
used the old e-commerce site, but even these
orders needed manual edits, common sense
checks, and pricing. "In short, very few orders were
going through without being touched in some way
by our team," said Keith.
The plan for rolling out the new software was
straightforward. The Marketing Team would
communicate with the sales people in a country
and ask them to tell their customers about the
Shop Carestream site. The manual process was
maintained but as customers placed orders
for additional products or services, call center
staff would offer to help them set up credentials
for online ordering or would send them the
information so they could do it themselves.The
introduction of the software went well with
just a few glitches, according to all concerned.
In general, business leaders were pleasantly
surprised. "Before we started I had heard from
both our sales people and from our business team
members that their customers wouldn't use Shop
Carestream," said Keith. "In fact, our customers did
embrace it — where they could. Some of them even
told me that it was about time we did this."
As soon as Shop Carestream was introduced,
many dealers who had been using the old
e-commerce site switched easily, as did a few
customers, but following this, adoption stalled
at around 20%. As a result, the anticipated
savings didn't materialize. "This was no 'Field
of Dreams' where 'if you build it they will come,"
said Jeff Nelson, the Business Program Manager.
"The technology was ready," said Bruce, "but the
business was very slow in making the changes
they needed to drive adoption." Soon, Kevin
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Figure 2. Electronic Order Usage 2017-2018
wanted to understand why the promised digital
transformation and the resulting savings were not
occurring as planned, so he called a meeting of
everyone involved.
Reframing the Transformation
As Bruce recalled, "This was a 'colorful'
meeting. Everyone from the business was there
and Kevin demanded to know where the savings
were, what was hindering adoption, and what it
would take to attract customers to eCommerce
and eliminate manual activity, stating that
the present situation was 'unacceptable'. The
business people, who were used to working with
P&L statements, asked him to give them an
amount for the savings he wanted to generate
and that was when our entire view of the
situation changed. Kevin replied that he wanted
to see 'real cost savings and benefits' not simply
manipulation of the financials. He told us that
our goal with this project was to change how
the company operated, improve the customer’s
experience, and generate savings from reduced
manual order activity. This was the driver of real
change and it's what he wanted us to measure,
not dollars. This was to be our true measure
of success because cost savings would follow
adoption."
Kevin asked the group to identify the
percentage of manual orders country by country
and determine why customers weren't switching
to Shop Carestream. He became Executive
Sponsor of the project and in addition to
Digital Transformation at Carestream Health
reframing the initiative's success criteria, also
set a new goal for 100% electronic orders with
no manual intervention for the Film business.
Then, he asked Bruce to lead this initiative. "This
was surprising and a huge shift in accountability,"
Bruce stated. "Normally, it's IT's job to meet the
requirements and deploy the technology and if
business doesn't use it, it's up to them."
Now, Bruce, Keith, and other business leaders
had to dig into the data to find out what was
impeding the transformation.
Developing Inquiry Metrics
Starting with the new mandate from Kevin,
"it's not done until the customers have fully
adopted it", Bruce and the business team dug
into Carestream's system of record and spoke to
the individual country managers to find answers
as to why it was so difficult to get customers to
switch to electronic ordering. The first answer
they received was almost laughable. The country
managers pointed out that their customers
needed user IDs and passwords to access Shop
Carestream, but when Bruce asked them to
contact their customers to get this process
started, he discovered that their salespeople
didn't know who was actually placing the orders.
"The customers our salespeople were dealing with
handled purchasing," Bruce explained. "But the
people actually doing the work of ordering after a
sale were data entry clerks."
After establishing a plan for Keith and his call
center staff to contact customers and set up IDs
March 2019 (18:1) | MIS Quarterly Executive 91
Digital Transformation at Carestream Health
Figure 3. Orders "touched" by Carestream Staff 2017-2018
and to capture any further problems customers
had with electronic ordering, Chuck Whitfield, a
special projects manager who "does things that
don't fall into anyone's domain" and Jeff developed
a series of "waterfall slides" that would document
and project the company's progress towards the
goal of eliminating manual orders. These started
with the total number of orders placed by month
and cascaded down from there:
●● Number of manual orders
●● Number of orders from the partner site
(old e-commerce site)
●● Number of Shop Carestream orders
●● Number of EDI orders
●● Number of managed print services
delivered
●● Percentage of manual orders
●● Percentage of e-commerce orders
●● Percentage of Shop Carestream + EDI +
MPS orders.
Bruce began by having weekly meetings with
Jeff, Chuck, Keith and other business leaders to
review each of these metrics. "Initially, we had
IT people in these meetings as well, but I soon
realized that these were business problems. If IT
people were in the room, everyone focused on the
technology, not the business issues involved," Bruce
92 MIS Quarterly Executive | March 2019 (18:1)
said. He therefore uninvited the IT people and
changed the focus to business driven adoption.
As shown in Figure 2, it took a year of effort
to increase the number of electronic orders from
19% in April 2017 to 60% in April 2018. "This
was trench warfare," said Bruce. "We had to dig
into the numbers and accept no excuses. The only
way to get the usage up was to get customer buy-in
by dealing with their concerns on an issue-by-issue
basis."
Getting Customers Engaged
"Getting to the first 40% usage was hard
slogging," recalled Jeff. " We had never understood
how many different types of customers there
were and how many indirect as well as direct
customers we had. We also recognized that our
business processes were not as simple as we had
assumed." Part of the problem stemmed from
simple lack of communication about the changes
that were coming and what they would mean for
the sales teams in each country. "We needed more
communication for sure," said Keith. "We should
have kept the regions more informed internally on
our progress and what it would mean for them.
Once rollout began, communications improved
but we should have done more up front." Andy
agreed. "People in the regions didn't know what
was going to happen and they got very frustrated
when the system went in. The technology was good,
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Figure 4. Reasons for Manual Handling of Electronic Orders April 2018
but we didn't do enough work up front to simplify
our processes, empower the regions to deliver, and
align incentives."
Initially, there was a widespread perception
that this transformation wouldn't get support
from the regions and that implementing it would
require a heavy hand from head office. The
reality was that "resistance" was often due to
real challenges customers had with moving to
electronic ordering. For example, many regulated
customers (e.g., large national health care
organizations) were prohibited by law from using
Shop Carestream. Instead, these customers were
required to enter their orders on government
web-sites and Carestream was expected to
regularly log onto their websites and look for
orders. To prevent fraud some countries required
orders to be officially stamped and sealed before
being mailed to the company and the order
document returned with the purchased goods.
"The devil really was in the details," said Chuck.
To dig into the data even further, a second
chart was created showing the percentage of
orders "touched" by a person at the call center
(see Figure 3). This indicated further gaps in
processing that were not being addressed by
electronic mechanisms. "This chart helped us
better understand what was driving the touches
and who was doing the touches as we rolled out
e-commerce to new countries," said Keith. "Then
we could figure out how to eliminate or automate
the problems." For example, in-depth analysis
indicated that a large number of orders were
Digital Transformation at Carestream Health
not placed electronically because of the complex
pricing strategies used by the regions, which
couldn't be fully incorporated into electronic
ordering. And a significant number of electronic
orders (45%) were blocked because of credit
problems with the customer (see Figure 4).
The first required simplifying sales negotiation
practices and creating pricing standards while the
second will require changes in how credit limits
are managed and how customers make payments.
"The next 20% needed even more detailed
analysis, country by country, customer by
customer," said Chuck. "We just had to hack
away at the problems." This required detailed
waterfall slides for each country looking at the
root causes for manual orders with the country
managers and individual Tiger Teams and digging
into their processes and data. "We started with
understanding the data, the kinds of customers
involved, and the major objections to electronic
ordering," said Jeff. For example, the sales teams
in Greece told us that electronic ordering was
illegal. "We asked them to bring us the law that
stated this," said Bruce. "They really wanted us
to go away, but we wouldn't accept an excuse.
When they told us the law was in Greek, we told
them we'd find a Greek translator." In Mexico,
the team used a method of understanding the
problem by stapling an order to a person and
walking it through the current processes to better
understand the obstacles. In Japan, customers
were accustomed to faxing small quantity orders
several times a day. In Brazil, there were so many
March 2019 (18:1) | MIS Quarterly Executive 93
Digital Transformation at Carestream Health
pricing gyrations, it was impossible for a system
to keep up with them.
With a few countries, problems had to be
escalated to get serious attention, first to the
world-wide general manager and then to Bruce.
Occasionally, Kevin Hobert was asked to step in.
As Jeff said, "We've learned that our global
business processes didn't all work the same way.
We needed to understand the data and make
the necessary changes. With manual processes
we knew what we were doing and could make
adjustments on the fly. As we dug into things
however, we discovered that our data and
processes were much looser than we expected,
and we've learned we could all do a lot better if
we had better data."
"In the process of this exploration, we now
understand that engagement complexity hides
itself in the way an organization works locally,"
said Bruce. "When you are chasing a dollar metric,
you can hide a lot of things but with a different
measure, like usage, it's much more difficult to
hide. We needed to use data to understand our
blind spots."
Enhancing the eOrdering
Platform
As the team learned more about the reasons
for manual orders, Carestream had to develop
a variety of responses to match the diversity
of ways customers engaged with the company.
It created several bodies of work to improve
electronic adoption beyond 60%. For example,
robotic process automation (bot) technology
will soon be deployed to log into governmental
systems, collect orders, and log them into SAP.
When this is complete, it should add a further
15% to electronic usage. Bots will log into a
government system three times a day and see
if there are any orders for Carestream. Initially,
they will just send an email to the order center
with the order's specifics; eventually these orders
will be input directly into the electronic order
system's SAP back end. Bruce and his team are
now working on giving each bot a name and an
employee number, so it can have an SAP license.
"I predict we'll be using robotic process automation
for more cases in the future," said Chuck, "but right
now implementing it is more challenging than we
94 MIS Quarterly Executive | March 2019 (18:1)
envisioned." The team is also looking to increase
EDI in cases where it makes sense.
"The end of this part of the project is finally
in sight," said Jeff. "We’ve recognized that 100%
electronic orders is a longer-term goal, but our
business case numbers will work with 85%. This is
our near-term goal now." "This is a more realistic
adoption rate," said Bruce. "We've learned that
about 15% of our customers don't have Internet
access. Once the bots have been implemented, this
will leave us with a 10% gap to close." Keith is
relieved that the project has a more achievable
near-term goal. "When we were aiming for 100%,
it caused some heartburn," he said.
Chuck added: "People were really worried.
We now know we have different classes of
customers. Some are easy to connect but others
are virtually impossible. Also, when dealing with
different environments, we must be willing to
meet our customers where they are willing to
be met. For example, one German customer's
ERP system was already sending e-faxes to our
call center and they saw no value in switching to
Shop Carestream. So now we've got a bot dealing
with their faxes."
As Jeff said, "We've also realized that
although a speedy implementation was
important, there are ways we could improve our
original Shop Carestream site by enhancing our
data with better product descriptions and price
information. For example, our EU store worked
well but the pricing was initially missing. We've
also recognized that we need to fix a lot of sins
where we've allowed some countries latitude in
their processes. In the Philippines, for instance,
most work was manual rather than through SAP.
Many of these processes simply weren't adding
value or were overly convoluted. In these cases,
we're rebuilding their processes from the ground
up."
"We've built a platform we can grow from," Jeff
continued. "Now we're starting to design what
we've missed and also to figure out what more we
can do." He noted that it was initially very difficult
to train staff in a rapidly evolving situation.
"Writing training materials was complex, and I
kept getting surprised. We were moving quickly on
the development side and training kept getting left
out." This resulted in a lack of efficiency in making
the business changes needed. "Now we are doing
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one-on-one coaching; training would have reduced
this effort, but when you're changing the way you
do business, you can't just train and let them go.
You must coach and help them and make this a
priority."
Future Digital Transformation
at Carestream Film
Day to day operations of the eOrdering
platform were turned over to a business owner
in summer 2018, even while work continues to
improve usage. The next phase of transformation
involves adding the Connected Customer process
which will tie Carestream's Internet-of-things
(IoT) platform for its devices to a registration/
activation process. In turn, this will be connected
into the eOrdering platform. Known internally
as the Argus Project, it is designed to simplify
Carestream Film's service backend by enabling
and encouraging remote connectivity for its
devices. "By connecting all our devices, we can
identify problems remotely, and either resolve them
or dispatch a service person, making this part of
our business model fully automated as well," said
Keith. "We will even know which of our products
are being used and can send replenishments as
needed."
"Since we built our IoT platform some years
ago," said Bruce, "100% of our devices are now
capable of remote connectivity. The challenge
for this project, as with eOrdering, is getting our
customers to register and activate their equipment
online so we can monitor them." An earlier version
of this approach was tried unsuccessfully in 2013.
"We had about a 2% adoption rate and discovered
many problems with our platform assumptions.
Many of our customers had no Internet connection
or had firewalls that prohibited persistent
connectivity to our company," he said. "Our dealers
were also afraid that this new process would
cut them out of the loop since they often provide
service as well." However, a long standing FDA
requirement that companies must know where
all their medical devices are located for recall
purposes has given this project a new impetus
since this goal is achieved as customers register
and activate a device.
Argus is scheduled to go live later this year
and its project leaders are learning from previous
experience with eOrdering, taking a similar
Digital Transformation at Carestream Health
approach to improving adoption. "Our goal is
100% activation and 90% on-going connectivity,"
said Chuck, who will be crunching the data and
participating in weekly adoption meetings for
this project as well as eOrdering. "Changes to the
concept have already been made, such as enabling
registration with a cell phone and allowing a
service agent to turn on connectivity remotely via
the cell network."
"There are considerable savings to be generated
from this project," said Andy "but until we connect
our customers we cannot create diagnostics and
can only guess at what our indirect customers' (i.e.,
through dealers) needs are." As with eOrdering,
internal cultural changes will be required. "Our
salespeople really know how to sell discrete
products to generate commissions," said Bruce.
"But when you are selling a long-term revenue
stream like managed services that generates
smaller commissions over longer periods of time,
much like insurance, we need a different sales
mindset that works to build a client population."
Even though the platform is still being rolled
out, Bruce and his team are already anticipating
ways to deliver more value in the future. The
platform can be used to develop predictive
models for anticipating customers' future film
and managed services needs and for developing
new insights, business alliances, and ecosystems
to better serve their customers.
The Value of Digital
Transformation
Digital transformation has clearly been highly
disruptive for Carestream Health, demanding
significant change in all parts of the business as
well as on the part of its customers. Was it worth
it? "I'm generally very happy with what we've
accomplished so far," said Kevin. "All our metrics
are improving – customer satisfaction, percentage
of e-Orders, and our costs. Our processes are more
predictable, and this gives our customers and
suppliers a positive view of Carestream and makes
us easier to work with. We feel we are now in a
position of competitive advantage." "We can see
the value of this transformation, for sure," said
Andy. "We've implemented a foundation and can
now begin to add on further pieces of value. Our
dealers and regions are starting to see what this
transformation was all about." "We have achieved
March 2019 (18:1) | MIS Quarterly Executive 95
Digital Transformation at Carestream Health
about one-half our cost savings target," said Keith.
"We have reduced headcount from attrition and
re-purposed staff to more value-added work.
This effort will continue as we improve usage and
connectivity."
Lessons in Digital
Transformation
Carestream's leaders have learned a lot
about effective digital transformation in a global
organization. When asked how they would advise
others launching digital transformation journeys,
they made the following recommendations:
●● It's an organizational change more than
a technical shift. "This was a huge change
for our business," said Kevin. "IT can do
its part, but the rest of the business must
do the rest. This transformation involved
so much – logistics, pricing, sales, legal,
product development, field service and
our shared service centers. If I had to do
it over again I'd have started the business
change earlier . This was a much bigger
change for our business than just building
an e-commerce engine," said Jeff. "I learned
how big this was when I was asked to take
accountability for improving usability and
achieving the business case," said Bruce.
●● Align vision, teams, analytics, and
collaboration. "Transformation is
achieved when many people work together
to achieve a common goal," said Kevin.
One of the simplest ways to drive business
change is to put it in their goals. "If you
can see the vision, you can change your
goals," Jeff added. "But you also need to
change incentives. At the beginning, it was
difficult to understand the end vision of
what we were trying to achieve," explained
Peter. "For a while it seemed like we were
going back and forth trying to decide what
we wanted to be when we grew up. It's
extremely important, therefore, to be very
clear about what is required and what the
end state is going to be." Aligning groups
who have never worked together before
is also important. Digital transformation
changes how groups interact with each
96 MIS Quarterly Executive | March 2019 (18:1)
other and it can shift balances between
groups. "It's more difficult to get these
groups to move under these circumstances,"
said Dave, "so it's even more important
to ensure that everyone takes a common
strategic view of the changes involved."
●● Be clear about the benefits involved
and the metrics to be used. "Our
transformation was not about building
an IT system; we were creating a way for
all our customers to interact with our
company," said Kevin. Identifying the right
metrics, which clearly track the customer
and business benefits, is essential. "If I
had to do it over again, I'd establish and
communicate clear metrics early in the
change process. At the call centers, we
always understood the big picture and its
impact," said Keith. "But this wasn't always
communicated well with our country teams
until the roll out happened."
●● Meet customers where they are
willing to be met. In a complex, global
business, digital transformation cannot
be a "one-size-fits all". "We've learned we
have to accommodate a variety of needs
as we move into different cultures and
business environments," said Chuck. "We
now recognize that we must know more
about our customers as an organization,"
said Jeff. "We need to better understand
their behavior so that we can proactively
meet their needs. It's not always possible
to dictate how we will interact with our
customers," said Dave. "But we are working
to take full advantage of all opportunities to
connect with them, such as through mobile
networks."
●● Transformation is not a project but a
group of interrelated programs. "It was
very helpful to have a program manager
for this initiative," said Brownlee. "It has
kept us on top of the larger program of
transformation and kept us business-
oriented." Within IT this transformation
has been the beginning of a new way of
thinking about IT work as well. As Dave
explained, "We began to understand that
we were building a strategic platform that
connects products, data, and apps together
misqe.org | © 2019 University of Minnesota

and as a result, we need an agile approach
to investing in it over the longer term." IT
leaders recognized that the two stories or
frames they had envisioned were really a
single platform that could be continuously
added to and improved over time. "This
changed our conversations," Dave noted.
"It's no longer 'one and done' but more
about determining the outcomes the
business wants to see over a period of time.
Adapting our funding models so we can
deliver in this way will be the next step."
The Bigger Picture of Digital
Transformation
Transformation at Carestream Health has not
occurred in a straightforward fashion. Instead, it
has required much iteration between its various
components including:
●● Framing and reframing the nature
of the transformation. The original
picture of transformation proved to be
challenging. Customers did not flock
to Shop Carestream, nor to online
registration of devices. Salespeople and
regions did not magically adapt their
processes. Over and over Carestream's
leadership has had to reassess and reframe
aspects of what they were trying to
accomplish — changing metrics, modifying
processes, and becoming more flexible in
their mission to accommodate customers
and their needs. However, the overall
vision of creating "touchless" processes
and platforms for integrating customers
and all aspects of Carestream's operations
remains in place.
●● Building and adapting a system of
production. The real world is not as
slick as the virtual world. Foundational
architecture and software were essential
to this transformation but along the
way, the realities of different cultures,
customers, and institutions required and
continue to require Carestream's IT team
to enhance its technology to adapt to these
differences where it wasn’t reasonable to
ask them to change.
collaborative effort, the role its CIO, Bruce
Leidel, played in developing and sustaining
Digital Transformation at Carestream Health
●● "Commonizing" the system of record.
The transformation team learned that it
didn't really have a single system of record
but variations of it in different countries,
each with considerably different quality
data. As the system of production has
improved and customer engagement
increased, and as leaders learned what
metrics are most important, the system
of record has increasingly grown more
accurate.
●● Improving metrics and systems of
inquiry. As noted above, a turning point
in this transformation was identifying the
correct metrics — adoption and zero-
touch — that would be used to drive the
business case, as opposed to cost savings
in and of themselves. In addition, having
dedicated business leaders seeking out
the information needed — not only from
a single system but by multiple means
— meant that analysis has gradually
improved. "Sometimes you just need to get
at information by brute force," said Jeff.
"I've learned we have to pay attention to
every single way we can get data," said
Dave.
●● Finding multiple ways to engage
customers. This has been the
most challenging component of the
transformation, requiring in-depth
collaboration with a majority of
Carestream's customers and a wide variety
of solutions to engage them. This case
clearly illustrates the fallacy of believing
that all that is needed to transform is
to implement new technology. And it
has shown the importance of meeting
customers where they are and deeply
understanding the reasons behind the
myriad ways that customers engage with
a company. With the broader challenges of
engagement addressed, the team is now
dealing with specific obstacles on a case-
by-case basis always seeking to improve
electronic engagement and the system of
record.
Although digital transformation was a
March 2019 (18:1) | MIS Quarterly Executive 97
Digital Transformation at Carestream Health
the "big picture" of transformation should not
be underestimated. First, he was "evangelist
of the possible" exploring the potential of new
technology and putting the technical foundations
in place long before there was a demand from
the business. Second, his role as a high-level
"techno-business coordinator" ensuring that
the technology actually delivered on its value
proposition was a new one for a CIO. It required
not only a big picture understanding of the
changes involved but also a willingness to dig into
the details of what needed to be changed in the
business to improve usage and a recognition that
ongoing IT changes would be involved as well.
This could only have been accomplished in an
environment of trust and mutual support. " I think
the business has learned that IT can help it ensure
technology delivers value to the business," Bruce
concluded.
Conclusion
The digital tapestry of Carestream Health is
still only partially complete. Created with many
threads stemming from many different places
in the organization, it was in preparation long
before there was a master picture in mind. Once
articulated and framed however, this picture
served as a guide to ensure that each individual
section of this tapestry came together to portray
the desired end product. As the work progressed,
inevitably gaps appeared in the big picture that
had to be creatively addressed and seamlessly
woven into the overall theme of the tapestry
and the picture adjusted accordingly. Eventually,
enough of the picture was revealed so that
everyone could recognize the image that was
emerging from the interweaving of the multiple
threads. Now that the end is in sight, the value of
every new addition is clearly apparent.
"We've just started this change," said Jeff.
"We've still got so far to go. In the middle of
things, everything seemed truly overwhelming,
but when you work together as a team and tackle
the challenges piece by piece, things begin to work
and the end of the first part of the transformation
is in sight. The key shift for us has been changing
from selling 'things' and developing features to
having technology and business work together
to deliver outcomes that incorporate technology,
services, and features," said Dave. "We are now
seeing meaningful change in our organization,"
98 MIS Quarterly Executive | March 2019 (18:1)
concluded Bruce. "The key has been being clear
in what you want to happen and holding both
business and IT accountable for it."
About the Authors
Heather A. Smith
Heather Smith (hsmith@business.queensu.ca) is
senior research associate with the Smith School of
Business at Queens University, Kingston, Canada.
A former senior IT manager, she is the author of
seven books on IT strategy and management,
the most recent being Driving IT Innovation
with James D. McKeen. She is also co-director
of the IT Management Forum which facilitates
inter-organizational learning among senior IT
executives and a research associate with the
Society for Information Management’s Advanced
Practices Council. Her research is published in,
among others, MIT Sloan Management Review,
Communications of the Association of Information
Systems, Knowledge Management Research and
Practice, Journal of Information Systems and
Technology, Journal of Information Technology
Management, Information and Management, and
Database.
Richard Thomas Watson
Richard Watson (rickwatson@mac.com) is
a Regents Professor and the J. Rex Fuqua
Distinguished Chair for Internet Strategy in
the Terry College of Business at the University
of Georgia. He was research director for the
Advanced Practices Council of the Society of
Information Management for nearly a decade
and is a former president of the Association
for Information Systems. In 2011, he received
the Association for Information Systems' LEO
award, which is given for exceptional lifetime
achievement in information systems. As a
visiting researcher at the Research Institute of
Sweden (RISE) Viktoria in Gothenburg, he is
engaged in establishing and applying maritime
informatics to the European shipping industry.
He is also a visiting scholar at the Consumer and
Organisational Digital Analytics Research Centre
at King’s College London. He is on the editorial
board of Energy Informatics and the information
systems department editor for Management &
Business Review, both new journals.
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