By Byron Ford, Healthcare Expert, PA Consulting Group
Healthcare IT portfolios are complex beasts. Their safety-critical nature and high levels of interconnectivity and dependency require significant effort to manage and maintain. This is something that is frequently overlooked and can result in a number of poor-health indicators that continue to crop up across almost all healthcare organizations.
These indicators can include telltale signs such as multiple ‘point-solutions’ and gaps in end-to-end business process support, which are indicative of organic growth to meet tactical needs, redundancy of application functionality and overly complex ad-hoc systems and processes, incorrectly licensed/sized solutions and the inability to plan or adapt for future capability and capacity needs. The aggregate result of this is overspend, redundancy and mismatched capability.
As healthcare organizations seek to reduce costs and increase efficiency to meet their ever-tightening targets and a changing regulatory landscape, they are increasingly turning to their IT organizations to find substantial savings, match future capability needs and reduce risk. Below are some best practices for healthcare organizations to consider when setting strategic goals, establishing design principles, and optimizing an IT portfolio.
Establishing Strategic Goals and Design Principles
Traditional approaches to IT strategy are often criticized by outcomes that are at odds with future business capability requirements because they lack the necessary financial justification or supporting documentation required to enable executive buy-in and support subsequent implementation. In order to counter this, a sequenced and codifiedprocess is required that is action-based and provides the necessary outputs that directly support strategic goals.
As a first step, healthcare organizations need to define their strategic goals. Examples of common, high-level goals include:saving operational expenditures; reducing technology risk; and/ormaking business processes more efficient.
Next, healthcare organizations should define eight to ten design principles that are action-oriented and align with the organization’s strategic goals. Examples include, but are not limited to:
- Strive for a simplified and standardized technology landscape that is easier to manage and support;
- Take the opportunity to re-engineer processes when implementing new technologies to realize business efficiencies; and
- Understand that application portfolio optimization is an on-going requirement, not just a ‘one-shot’ exercise.
Setting the strategic goals and design principles upfront will help guide an organization’s direction of travel and act as a compass, or sense-check, throughout the process.In short, organizations should remember to roll the decision through each of the design principles and if it supports one or more of those guideposts then it’s probably worth considering.
Steps for Optimizing an IT Portfolio
Once direction has been established,construct a platform on which a future IT portfolio can be built. To achieve this, organizations need to understand the available alternatives in the market, determine the company’s future capability needs, and build a relevant and implementable roadmap.
Below are some steps that healthcare organizations can implement in order to further align the optimization of an IT portfolio:
Build an application inventory:
- Comprehensive and clear view of application and tool attributes—identify the owners, purpose, supported business processes, SLAs, operating platform, upgrade cycle, and security requirements.
Calculate the REAL cost of each application [Total Cost of Ownership]:
- Businesses often don’t know what an application/platform actually costs on an annual basis. It’s therefore imperative to ask the question, does the need justify the cost?
- These costs must take hardware, software, storage, maintenance, and FTE support into account.
Understand the current toolset from stakeholders’ perspective:
- Survey users to gauge their opinion on system value, risk and adequacy—they are the customers at the end of the day.
- Front-line clinicians and back-office workers will have very different views of the same applications, for example, which will need careful consideration.
Map outstakeholders’ future capability needs:
- Conduct capability work-sessions with the business to understand future capability needs [i.e. what’s missing, what don’t they need, what needs enhancing, etc.].
- Get a view of the future-state architectural vision.
- Always consider business continuity or security capability.
Engage the market and build options for each application/platform:
- Conduct a market scan and reach out to vendors where possible to understand the alternatives, the costs, and whether or not this supports the organization’s goals and principles.
Down-select options with the support of the business and build aroadmap and case-for-change:
- Important questions to consider include: what does a sensible set of changes look like, what’s the return on investment (ROI), what’s the risk, what does my resource profile look like, when can this be delivered?
Establish an ongoing governance structure to manage a portfolio on a continuous basis:
- Without proper governance in place the organization will continue to grow organically rather than in a controlled and purposeful way. Set a line in the sand and manage it actively from that point on.
Ultimately, the main indicator of success is early business engagement. IT should be viewed as a service, providing capability to a consumer, in this case healthcare professionals, clinicians, planners, and financiers. Deepcollaboration should be fostered among all of these moving pieces in order to ensure that the organization’s current and future needs are met.