David Brent Shafer
Chairman & Chief Executive Officer at Cerner
Allan, thanks very much, and good morning, everyone. On our last call, we talked about our sharpened focus and increased sense of urgency to deliver value to our clients and shareholders. And as Mark will discuss, this increased focus and urgency helped us deliver very solid results in the second quarter. All key metrics reflected good progress on our transformation initiatives and a strengthening market presence. And based on this progress, we have increased our earnings outlook for the year again. What pleases me most is that as we undergo our transformation, we're maintaining an unwavering focus on client success, which is truly our North Star. Our key initiatives, which include product rationalization, driving operating efficiencies and continuing to refine our operating structure, all revolve around creating client value through accelerated innovation. And we expect these same efforts to also drive sustainable and profitable growth that should create value for our shareholders. I'd like to share some examples of progress we're making. Through improved focus and structure in our client organization, Travis and his team have grown our sales funnel and improved sales and client relationship management resulting in 24 new client footprints so far this year while reducing client attrition. We've also improved our overall Net Promoter Score by five points and have delivered 49 major client go-lives. Don and his team have made meaningful progress on several fronts as well, including advancing our product rationalization work which is creating better focus and freeing investment dollars for products that create the most value for clients and driving good sales and go-live activity in key areas such as real-time health, behavioral health, consumer, health network and data, which the progress -- with the progress in data space, including a successful onboarding of Kantar Health during the second quarter. Now in our technology organization, Jerome Labat, who is our CTO, has made good progress on solution and platform modernization, including being ahead of schedule on migrating care wear to the cloud. also improving our ambulatory solution and increasing the scale of CommunityWorks, all while maintaining 99.99% or 49% of incident free time for our clients. He's also advanced our digital factory, which is a set of capabilities and services that power the product life cycle from initial requirements to building, delivering and running our products. This important work should drive R&D efficiencies, improve quality, increase innovation velocity and speed to market and lower cost of running and supporting our products. These leaders have made this progress while also delivering cost savings through restructuring and flattening their organizations, centralizing functions and also implementing tools to increase efficiency and improve the way we are running our business. And further, Tracy Platt, our Chief Human Resources Officer, has helped us navigate these changes while staying focused on culture and ensuring Cerner remains a great place to work.
Now this is reflected in being named one of the world's best employers by Forbes. And we've also just recently received recognition by Forbes as one of the top 60 best employers for diversity. And also for being among the best employers for women. In summary, we continue to make very good progress, both inside Cerner and in the marketplace. Our products and services are well aligned with our clients' needs as they face pressure to control operating costs, address provider burnout, meet increasing consumer demands, expand service lines and also to build networks to improve performance in the evolving reimbursement environment. Now I'd like to provide an update on our federal business. The Department of Defence continues to move at full speed with deploying MHS GENESIS, their Cerner-powered EHR. In late April, DoD went live with Wave Carson, which included 25 military treatment commands, 148 physical locations across 11 states and two time zones. In total, the DoD is now live at 42 commands, 663 locations with more than 41,000 activated users, demonstrating that the system can be deployed at scale and on schedule. And later this year, DoD plans to go live at facilities in Hawaii and the U.S. Coast Guard has planned go-lives for both their Pacific and Atlantic ways, which will complete the Coast Card deployment as planned. Moving to the Department of Veterans Affairs. The VA recently completed their strategic review, which we strongly supported and issued a comprehensive report. And importantly, these fines were generally not technology-related. Instead, they were more focused on governance, training and site readiness. And we're consistent -- highly consistent with the findings of our own internal assessment conducted earlier this year. We're working very closely with the VA on the project plan and ensuring we properly address all identified issues so we can deliver a time -- a lifetime of seamless care for our veterans. Secretary of Veterans Affairs, Dennis McDonough has reiterated his commitment to the program and to Cerner. And in return, Cerner has reiterated our commitment to the VA and our nation's veterans. And while the VA finalizes their new governance and management structure, we will continue to our predeployment efforts, including technical development and enhancements, solution readiness and site preparation, but no further go lives are expected until 2022. And as a result, we now expect another 0.5 point of impact on our 2021 revenue growth, which is reflected in our updated guidance for the year. Now before turning the call over to Mark, I'd like to quickly comment on the status of my transition and the search for a new CEO. The search process has been very active since we announced it last quarter. And as you can imagine, it is difficult to provide an exact time line given the sensitivity and importance of the search, but I believe the Board is making very good progress. I personally remain actively engaged and believe the team has been executing very well. So I'm confident we will continue to advance our key initiatives as the search continues. And as a result, I believe my successor will step into the role with Cerner well positioned for success. In summary, I'm very pleased with Cerner's progress so far this year. We have demonstrated the ability to execute on near-term deliverables while also driving meaningful organizational change that is positioning Cerner to realize our potential and to have a much bigger impact on health care. Mark, I'll turn it over to you.