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Cost optimization is perpetually one among the highest agenda items for many healthcare CIOs. Why? Because leadership and business believe IT to enable more innovation and organizational strategy while at an equivalent time costing less. And don’t forget—all of this has got to be safer and stable. In other words Faster, Better, Cheaper…and Secure.

But cutting costs alone isn’t always the right solution. to satisfy today’s challenges, IT must deliver financial transparency, the endless discipline of cost optimization focused on business outcomes, and in fact, 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 attempt to satisfy the demand for high-quality solutions that are optimized for business profitability, we are taking a three-pronged approach to extend the worth of IT to the business.

Optimizing Spend

Do you want to start optimizing? If so, take a glance at your existing overhead with vendor contracts and maintenance agreements, as these are an excellent place to start out. Begin by tracking the annual spending for all major vendors. Once you do that, you’ll be amazed at how opportunities to leverage volume discounts will quickly present themselves. Armed thereupon knowledge, start reviewing all enterprise contract renewals for opportunities to secure the simplest pricing and terms—but you've got to plan ahead and do the work and negotiations a minimum of six months before expiration in order that there's time to barter or worst case, seek alternative solutions. Your organization can also find that by delivering applications differently, you'll have a positive impact on the application’s total cost of ownership (TCO). 

It’s time to develop a cloud strategy if you don’t have one. Cloud providers are touting their ability to save lots of us money, but it’s our job to define what that appears like for our organizations. The journey to the cloud necessarily involves conducting application assessments on your active portfolio to raise understand where the cloud might deliver on the promise of faster, better, cheaper for each of your applications. Certainly, the cloud isn't a one-size-fits-all solution for an organization—rather; it'll be an application by application or maybe application component (archive storage, backups, databases) based decision.

The overarching principle to remember: don’t reduce costs at the expense of IT service quality

In some cases, it's going to cost more. That’s why it's important for you to acknowledge that not everything within the data center is going to be an optimal fit for the cloud environment, which suggests we'd like a hybrid multi-cloud strategy. As you perform this application assessment, start to also define your own internal platform costs for servers and storage. By knowing your platform costs as an indoor service provider, you’ll be during a better position to take care of applications on the acceptable platform while optimizing costs.

Internal data center platforms got to be cost-optimized also. The normal 3-tier and converged architectures are not any longer a one-size-fits-all solution and lots of times carry a really high TCO. Hyper-convergence may be a proven platform that uses more commodity-based servers to support the enterprise requirement of our application portfolios. Employing a hyper-converged platform isn't a one-size-fits-all solution either, but as we still virtualize our application environments, it's a practical approach to optimizing our data center overhead.

Financial Transparency

As CIOs begin to focus their message and metrics on how it's supporting the enterprise, it becomes our responsibility to supply financial transparency on the value of conducting digital business. Start by identifying and assigning the platform and labor costs to every application as to how to speak the business costs per service. Because the cost per business service begins to be communicated in terms the business understands, the conversations will shift from a technology focus to a business partnership. From that time, we will start a subsequent level of optimization and rationalization of the appliance portfolio. By rationalizing the utilization and impact of every application within the portfolio, we have the chance to scale back application overlap, sunset underutilized applications and reduce IT complexity. 

Improve Demand Management

Shifting the main target from cost reduction requires financial transparency and therefore the ability to run IT sort of business. One among the foremost significant ways to extend the business value of it's to more effectively manage the availability and demand of our resources. Managing the demand side of the equation requires prioritization of efforts with attention on the impact and benefit to the organization. Supply-side management features a similar approach with removing the waste or non-value adds steps within many of our processes. Map your project, enhancement, maintenance, and break-fix workflows to spot efficiencies, remove the wasted time and ultimately increase the supply of IT to try to more work for the business initiatives.

Building an honest digital business partnership is often daunting, not impossible—it requires an honest governance process and therefore the support of executive leadership within the organization. By enhancing the event of business cases and justification for projects through governance, the decision-making process will begin increasing IT’s value to the digital business. Then as these efforts still mature, make certain to create in program features where you continually review the projects underway and therefore the organization’s demand to make sure the work portfolio remains aligned to the business agenda. Doing so will assist you to hone your focus and cancel projects that not align with the organization’s strategic direction.

By following this three-pronged approach at Children’s Health in Dallas, we've removed over 30 percent of the value from IT budgets and still identify more opportunities as we mature our financial models. Additionally, executive-level sponsored governance structures have strengthened the partnership between IT and therefore the business, ultimately right-sizing the availability and demand dilemma. As a result, the business is now sharply focused on prioritizing strategic work and understanding the requisite IT effort needed to support organizational initiatives and digital business strategies.