More Strategies for Identifying IT Optimization and Cost Efficiencies
In the first article of a three-part series, Santa Rosa Consulting discussed the needed paradigm shift, concepts and practical approaches toward Continuous IT Cost Optimization (CITCO). In the second article, the firm’s leadership elaborated on strategies for identifying IT optimization and cost efficiencies within organizations.
In this final article of this series, Pat Tikkanen, director of strategic advisory services for Santa Rosa Consulting, will expand on these strategies and present a framework for guiding you through the IT cost optimization process within your organization:
Simple, Yet Complex
While establishing a framework might seem like an academic exercise, it can be of great assistance to some organizations as such initiatives can help establish the critical thinking and complex processes associated with the future state of healthcare organizations and their service delivery.
When it comes to IT, C-Suite executives are still asking the questions, “Am I getting the most for my money?” or “What is the cost/value paradigm?” Typically, IT consumes a significant portion of an organization’s budget, and the operational expenses (people and maintenance fees) are generally fixed costs. Capital, on the other hand, typically represents a one-time expense, so there is more room in the budget for IT cost optimization.
But the CITCO process also must support the requirements of HIEs, ACOs, HIPAA, and quality guidelines. So both the C-Suite and the end users need to embrace new strategies of computing and technology, and understand that various users need to do their work differently both from a workflow and application and device strategy to meet these new demands. Most organizations understand these requirements, but can’t operationalize strategies and technologies to yield the needed results.
A Pyramid Scheme
Using the pyramid framework pictured and described below will help organizations to create alignment with the process of CITCO.
Starting at the foundation of the pyramid, the lower three layers create Strategic Alignment with the business strategies of the organization. This is where the appropriate context and types of technology solutions are established for the organization, as well as the approach. The middle portion of the pyramid speaks to the IS Department Operational Experience or IT organizational structure, infrastructure, operations, development and data management. The top tier represents Value Realization. Here lay the fiscal, project execution, service levels and perceived value of IT. This is where the C-Suite executives can find the answers to their critical cost/value paradigm questions.
As a result, most organizations will focus on the top four layers of the Value Realization tier, which are:
- Fiscal Responsibility – “Stay within the budget”
- Project Execution – “Get the application up and running”
- Service Levels – “Statistics from the helpdesk or maybe a user satisfaction survey”
- IT Value – “Focus on end-user and customer benefits”
As further depicted in the pyramid framework model below, IT optimization typically covers a minimum of six layers within the three main tiers. The leveraging of new infrastructure and computing models are critical to the entire process of CITCO.
For example, innovations in infrastructure, service delivery models and computing architectures can provide innumerable opportunities for organizations to rethink their strategies in hope of lowering the cost of both capital and operational investments. These opportunities include ITaaS, cloud computing, virtualization, mobile computing, and new staffing approaches to name a few.
Santa Rosa Consulting suggests now is the time to complete an IT optimization review, and identify where opportunities might lie for achieving optimal cost savings, efficiencies, economies of scale, and technology alignment to support your business strategies. Some of these opportunities could include:
- cost reduction opportunities within operations
- leveraging current and up-to-date technologies and strategies
- access to technology professionals to address a specific service
- alignment of the technology strategy with the evolving business strategy
Santa Rosa Consulting offers a framework and an analysis methodology to assist leaders with identifying how your organization can best benefit from this approach.