Cost optimization is perpetually one of the top agenda items for most healthcare CIOs. Why? Because leadership and business rely on IT to enable more innovation and organizational strategy while at the same time costing less. And don’t forget—all of this has to be more secure and stable. In other words Faster, Better, Cheaper… and Secure.
But cutting costs alone isn’t always the perfect solution. To meet today’s challenges, IT must deliver financial transparency, a continuous discipline of cost optimization focused on business outcomes, and of course reduce costs where possible. The overarching principle to remember: don’t reduce costs at the expense of IT service quality. At Children’s Health in Dallas, as we strive to meet the demand for high quality solutions that are optimized for business profitability, we are taking a three-pronged approach to increasing the value of IT to the business.
Do you want to begin optimizing? If so, take a look at your existing overhead with vendor contracts and maintenance agreements, as these are a great place to start. Begin by tracking the annual spend for all major vendors. When you do this, you’ll be amazed at how opportunities to leverage volume discounts will quickly present themselves. Armed with that knowledge, start reviewing all enterprise contract renewals for opportunities to secure the best pricing and terms—but you have to plan ahead and do the work and negotiations at least six months before expiration so that there is time to negotiate, or worst case, seek alternative solutions. Your organization may also find that by delivering applications differently, you will have a positive impact on the application’s total cost of ownership (TCO). Many vendors now offer SaaS models as a low risk, low cost method for delivering the same application in a vendor-hosted environment. SaaS solutions reduce operational overhead within the data center, lessen the burden on IT staff to maintain these applications, and often times offer a more feature rich application than the on-premise packaged product. So SaaS models, bear a close look.
It’s time to develop a cloud strategy if you don’t have one. Cloud providers are touting their ability to save us money, but it’s our job to define what that looks like for our organizations. The journey to the cloud necessarily involves conducting application assessments on your active portfolio to better understand where the cloud might deliver on the promise of faster, better, cheaper for each of your applications. Certainly, the cloud is not a one-size-fits-all solution for an organization—rather, it will be an application by application or even application component (archive storage, backups, databases) based decision. Do your research because simply re-platforming an application to the cloud doesn’t traditionally save money.