Strategic Initiatives for Tough Economic Times

March 26, 2012

– by Kathleen Gaffney, Business Transformation Specialist

The current challenging economic conditions have forced healthcare executives to postpone IT strategic initiatives and look for ways to reduce overall costs and increase return on investment. It is estimated that 80% of an IT non-payroll budget is spent on maintaining existing system and software infrastructures within the organization. To meet this challenge, it is imperative that executives have strategies that enhance their decision making in identifying, selecting, financing, monitoring and maintaining a mix of assets that balance the desired outcomes with alignment of IT to the organization’s goals. This full pdf presents several key strategies, which are summarized here:

  • Technology Portfolio Management
  • Lifecycle Management
  • Contract Management

Technology Portfolio Management
Technology Portfolio Management (TPM) is the identification and assessment of technology assets. These assets include the hardware, software, operating systems, data and projects within the organization. Items frequently forgotten but which should be included are telephones, PDAs and cell phones, printers, copiers, TVs, hands-free communication devices and others.

Asset Lifecycle Management
Many organizations do not plan and budget for critical technology assets such as desktops, servers or storage primarily because they are unaware of when items need to be replaced or upgraded. They are then surprised by a purchase requisition or worse yet; do not have funding due to the lack of accurate planning and budgeting. The goal in having a lifecycle management program is to lower net costs and to support a finance-driven process of cash flow planning and capital allocation for IT expenditures.

Contract Management
Knowing that a large portion of a healthcare organization’s budget is consumed by commitments for maintenance and support services in the form of contracts, licenses, support maintenance, and warranty agreements, it makes sense to manage these contracts. Gaining control over IT spending requires a complete inventory of all technology contracts (including those not under the control of the IT department). The goal is to develop a comprehensive inventory of the contracts in place to assess renewal/cancellation deadlines, identify opportunities for cost avoidance, and assess current usage levels against licensing.

The strategies discussed rely more on processes, procedures and low-tech solutions such as an Excel spreadsheet or simple database. Software solutions that automate and consolidate the TPM, Lifecycle Management and Contract Management processes have only been available in the past few years, but are catching on. Whether the solution implemented is low-tech or high-tech, both will improve an organization’s decision making by providing visibility into its assets, lifecycle stage and maintenance costs, and the ability to closely manage them. This can lead to cost savings, improved budgeting, risk reduction, and enhanced regulatory compliance.

Click here to download the full pdf white paper


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