Strategies for Identifying IT Optimization and Cost Efficiencies
Santa Rosa Consulting illustrates how healthcare organizations can cost effectively optimize information technology investments.
In the first article of this three-part series, William J. Leander, Senior Vice President, Santa Rosa Consulting, introduced the concept of Continuous IT Cost Optimization (CITCO) – and explained how ideal optimization is more a mindset than a project. As such, there are four key concepts necessary for a successful continuous optimization process:
- IT simplification
- Service levels
- Cost clarity
- Demand decisions
In this second installment of the series, Pat Tikkanen, Director of IT Advisory Services at Santa Rosa Consulting, discusses strategies for identifying IT optimization and cost efficiencies within organizations:
The need to optimize IT and realize cost efficiencies is certainly rising as bottom-line pressures continue to frustrate C-Suite executives at healthcare provider and health plan organizations nationwide. It’s not that these executives question the need for technology as a key enabler of their business, but rather they question the cost/value paradigm, the return on investment, and whether they are leveraging technology in the best possible way. Indeed, executives acknowledge that technology is needed to enhance quality, implement best clinical practices, and comply with government initiatives – but they often wonder just how much should they spend.
Similarly, the recently published HIMSS Health IT Value Suite attests to the value proposition that technology can bring to patients, providers, quality of care, efficiencies, evidenced based practices, prevention, and financial and operational savings. The challenge is “where and how is it best for organizations to invest in technology and get the biggest bang-for-the-buck?”
Santa Rosa Consulting’s answer to this vexing question: Before another infrastructure dollar is spent, your organization should review its investment and optimization strategies. Santa Rosa Consulting believes organizations need to evaluate the efficacy and cost/value opportunities associated with their current IT investment, processing, staffing and infrastructure support models.
To start, innovations in infrastructure, service delivery models, and computing architecture provide innumerable opportunities for organizations to rethink their strategies, ultimately lowering the cost of both capital and operational investments. These opportunities are very real now and include ITaaS, cloud computing, virtualization, mobile computing, and new staffing approaches – to name a few.
In many cases, the need for every organization to have local data centers and on-site end-to-end solutions has become a thing of the past. Shifts in technologies, staffing and investment models present the real opportunity for organizations to optimize their IT investments, eliminate some expenditures, and create a better alignment with their core business strategy. Here are some questions healthcare executives may want to ask:
- How current is your IT strategy and its alignment with your organization’s business strategy? (Hint: Strategies don’t last five years anymore)
- Do you need to “own” all your technology, or is it more reasonable to “partner” with solution companies aligning services, delivery, guarantees and current technology?
- Is everything you are doing part of the “core competency” of your business, or are you deeply invested across numerous technologies?
- Would it be more advantageous to lease data center space on a “pay-as-you-go/grow” model as opposed to investing in both real estate and heavy technology costs?
- Are you leveraging the latest technologies that provide economies of scale and service guarantees (cloud, ITaaS, virtualization, etc.)?
- Are you using dated /legacy technology that provided excellent solutions when first purchased, but no longer provide the value you seek?
- Does your organization have the IT staff competencies and skills on board to provide services needed, or can you purchase what’s needed on an “as-needed-basis?”
- Are you leveraging technologies that best support the type of business your customers are in (doctors, nurses, claims processing, HIEs, ACOs, etc.)?
- Are you being innovative in addressing regulatory and legal requirements on your systems, i.e., security?
These questions represent an opportunity to jump start thinking around current business and operations strategies and client facing solutions. The difficulty with addressing these questions will most assuredly force a decision to either “take a deep breath and step off into unfamiliar waters,” or “remain stationary with escalating costs, decreasing services, and playing catch-up to new innovations.” These questions also will force some thinking about current operations and staffing that may be uncomfortable: “Is this really our core competency?”
In the final article of this series, Tikkanen will elaborate on strategies and present a framework for guiding you through the IT optimization and cost efficiencies process within your organization.