Union Medical Healthcare Case Study

Based in Hong Kong, Union Medical Healthcare (UMH) offers one-stop solutions in a wide range of medical aesthetics, health-screening services, dentistry, chiropody, orthopedic, and traditional Chinese medicine. The company was listed on the Hong Kong Stock Exchange in March 2016. As of September 2017, UMH operated 20 medical centers and clinics in Hong Kong, 2 in Macau, and 12 in China with two more under construction. Revenue during the same period increased by 51.4 percent to HK$617.3 million (US$78.8 million).

Demand for aesthetic treatments is increasing worldwide, with the global market valued at US$26.3 billion in 2016 and a compound annual growth rate of 5.9 percent forecast through 2025. The rise in demand is being met by companies such as UMH, which has clinics across Hong Kong, as well as in parts of China and Macau.

To accelerate business growth, UMH listed on the Hong Kong Stock Exchange in March 2016. This provided the company the opportunity to build or acquire new clinics, increasing in its locations in China as well as funding expansion of its services in Hong Kong to capture rising local demand and an increase in “medical tourists”—Chinese residents who travel to Hong Kong for treatment.

With hundreds of institutional investors to answer to, UMH sought to speed up its financial reporting systems, which were largely manual. Generating reports, such as its quarterly figures, could take more than a month to finalize. Further, senior executives needed better insight into the daily operations of the business. This, in turn, would help them to strategize their business-expansion program more effectively.

UMH decided to roll out SAP S/4HANA Finance to replace its existing system. However, deploying such a solution on premises was too costly. Michael Ngai, deputy chief information officer at UMH, explains, “An on-premises infrastructure was going to be expensive. We estimated it would cost about HK$400,000 [US$51,140]. And we would not only have the cost of the hardware, but also the expense of paying IT personnel to ensure its reliability and carry out maintenance.”

UMH studied the possibility of running SAP S/4HANA Finance on a cloud-based infrastructure. The company looked at offerings from Amazon Web Services (AWS), the Google Cloud Platform (GCP), and China-based Tencent Cloud. Says Ngai, “We quickly determined that GCP didn’t have locations in China, so we decided not to use it. AWS, however, did have Chinese locations and it had worked with SAP to certify the AWS Cloud for SAP S/4HANA.”

To build its AWS infrastructure for SAP S/4HANA, UMH engaged AWS Partner Network (APN) member Xynergy IT Solutions. The partner set up the infrastructure on the AWS Cloud using Amazon Elastic Compute Cloud (Amazon EC2) instances to run the applications and database. For UMH, Xynergy IT Solutions has launched two Amazon EC2 r4.8xlarge instances, featuring 32 compute cores and 244 gibibytes of memory per instance. UMH also takes advantage of Elastic Load Balancing to distribute incoming traffic and Amazon Elastic Block Store (Amazon EBS) to store data. The entire SAP S/4HANA Finance solution sits within an Amazon Virtual Private Cloud (Amazon VPC).

UMH plans to open more clinics in the coming years to capitalize on the increasing demand for high-quality medical and healthcare services. It also plans to enlarge the servicing spaces within its clinics and continue to diversify the medical disciplines in Hong Kong. The progress of these plans is included in financial reports that UMH prepares for investors. Ngai says, “Nowadays, we can capture financial data much quicker with our SAP environment running on AWS. After deploying SAP S/4HANA Finance on AWS, we produced our first quarterly reports 50 percent faster than with our old financial reporting system. This improvement means that we have more time to produce reports on an ad hoc basis whenever they are requested by senior executives.”

UMH executives also have access to financial data in real time through web-based dashboards. “We can see the immediate impact of our decisions on the business’s operations with our SAP S/4HANA system running on AWS,” says Ngai.

According to Ngai, the AWS Cloud has proven to be highly reliable since UMH launched its SAP solution—with no downtime. He also estimated that UMH saved at least two to three months by launching SAP S/4HANA Finance on AWS rather than procuring and deploying an on-premises infrastructure. “I think the savings from running SAP S/4HANA Finance on AWS are significant. We avoided the management cost of maintaining the underlying AWS infrastructure and performing data backups.”