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IT Is Reaching Commodity Status – Are You Taking Advantage?

Though my business card says Principal, I’d prefer the term Provocateur. As a year-long challenge to traditional thinking, I have proposed the notion to professional friends and colleagues that many skills, processes, and technology in the healthcare sector have reached commodity status. That change presents great potential benefits for the entire healthcare sector.

Reactions range from enthusiastic agreement to skepticism, sometimes even denial. The skepticism is generally limited to the portion of the IT environment based on legacy solutions – a combination of talent and technologies which may have been mainstream at some point, but clearly are outdated now. At this point, in my non-scientific survey, the distribution of opinion is a bell curve shifted right toward the “no way” end of the continuum, slowly moving to the left. My goal and that espoused by my partner Sue Schade is to motivate people to move from wait-and-see to 1) contemplate, 2) plan, and 3) act.

The pendulum of managed services (formerly outsourcing) has swung back to practical. Unlike previous experiences, the commodity status of the elements mentioned – skills, processes, and technologies – means a sustainable future that is better, faster, and cheaper. It is also more secure and less stressful for the responsible IT executive(s).

In this opportunity-rich environment, benefits appear to be substantial and accrue across the spectrum – in clinical, financial, and administrative areas. Partial or comprehensive managed services allow an enterprise to:

  • Achieve better clinical outcomes,
  • Reduce overall costs, lower capital expenditures thereby freeing capital for use in other pursuits,
  • Improve some key financial metrics such as debt ratio, fixed versus variable cost, and FTE counts,
  • Minimize the time to achieve value from IT investments,
  • Provide a more flexible IT infrastructure to support mergers, acquisitions, and divestitures,
  • Enable and support strategic initiatives including digital transformation,
  • Leverage data assets to support existing analytic efforts, to create and share information and knowledge, to discover patterns that will promote wellness and healing,
  • Provide a secure environment that continuously evolves to counter new cybersecurity threats,
  • Improve the end user experience and satisfaction, and
  • Ignite and support innovation.

The key to success is novel thinking using innovative approaches.

The adoption of managed services, better expressed as modernization, should be planned carefully and approached in stages. Though we talk about a selective versus comprehensive approach, it’s all selective. The candidates for modernization include but are not limited to the areas below. The general categories presented in order from least to most controversial are Infrastructure, Interfacing and Integration, End User Support and Applications, Cybersecurity, and Talent and Staffing.

Optimize those items which used to occupy so much space in your data center including but not limited to network architecture, data storage, servers, backup and disaster recovery technologies. Use a managed services vendor’s NOC (Network Operations Center). The NOC can monitor, report, and respond to the important events at a level of diligence that most of us could not afford to staff. They have the resources to use evolving augmented intelligence and machine learning to improve resilience and vigilance. Let the vendor independently or with assistance from your technical architects create and manage the appropriate mix of storage and servers that grows and shrinks based on usage to optimize cost and performance and ensure flexible scalability in a redundant, secured environment.

Another option is data center consolidation. That consolidation may occur more quickly and could be much less costly if you function virtually instead of physically.

If you don’t think that makes sense, ask yourself

  • How many times in a day on a personal and professional basis do you use some form of infrastructure as a service?
  • How many of the applications you use are resident in the cloud, and where do you think your data is stored?
  • How close is your cloud hosted experience to dial tone – the availability gold standard which has been at commodity status for a very long time?

In my experience, the critical path for most projects is interfacing and integrating. A backlog for an interface team is common. You will still need some end-user assistance in the testing and validation phase of projects, but let the vendor provide the initial coding and internal testing of interfaces at a pace that is based on the needs of your business, not the size and availability of your interface team.

As for integration, take advantage of the data science teams that reside inside large managed service firms. That allows you to focus on data governance and improving data quality instead of thinking about database management and all the other activities that don’t offer any competitive advantage. Your focus can switch to formulating more meaningful questions instead of simply extracting and transferring data.

Some of the more challenging areas for a CIO are the Help Desk and Applications Suite. There are numerous examples of these areas which have been outsourced successfully. In the Applications area, as mentioned before, the greatest concern is legacy support, oftentimes dependent upon an individual. Using application management services (AMS) allows you to transfer the knowledge from one or more individuals to a team.

The act of moving the applications is often a catalyst for creating missing or updating outdated documentation. Hopefully, another outcome is improved workflows. When done well, you can use AMS to reduce and eliminate diversity in your applications portfolio, and to streamline processes using newer, better, and evolving features and functions.

Bad actors in the cybersecurity space are putting increasing pressure on providers. Though our visual acuity doesn’t allow us to see them, thank goodness, cyber threats are everywhere and they’re getting more sophisticated every minute. Large managed service providers are constantly improving their protection, detection, and response capabilities at a pace and scale that even the largest of healthcare systems cannot afford – or do. Let the managed services provider focus on the technology countermeasures while you focus on the human factors including better training and awareness, creating a culture of security and privacy.

IT is expanding rapidly into every aspect of the care continuum. Complexity and diversity of technologies is accelerating. The breadth and depth of responsibilities borne by IT staff require a new way of thinking about talent management and staffing. A managed services company is more capable of attracting and managing a diverse, experienced staff familiar with the broadest spectrum of practices. They can afford the incentives to get people to work at scale effectively and efficiently with thousands of legacy, new, and emerging technologies.

Think insourcing, outsourcing, or a hybrid approach – the one that makes the most sense for your culture and helps meet your strategic goals and tactical objectives. Personalize your approach from many options, some of which are listed below.

  • Augment the skills not already present in your existing staff, capabilities that you need but cannot afford. Fill virtual roles such as a vCISO (virtual Chief Security Officer) when you need permanent help but on a limited basis and actual roles which are hard to find, e.g., AI programmer or Chief Digital Officer on a part or full-time basis.
  • Augment the skills of your existing staff to create flexible staffing, e.g., to deal with a project or address peaks in demand that your current staff cannot address due to time or competing priorities.
  • Staff to backfill legacy and current support to allow your staff to focus on innovation related activities.
  • Let the vendor hire some portion of your staff mixed with their staff and by leveraging scale, do so at a lower cost. That means rebadging some or all the staff that is necessary to meet your needs as defined by service level agreements. You should consider doing this on an individual by individual basis. Retrain if possible, and remove if necessary, both with sensitivity and compassion.

With employees, you’re often challenged to measure productivity. With a managed services firm you can negotiate a service level agreement with remedies to make sure you get just what you need.

Celebrate the fact that much of IT has reached commodity status. Let someone else help you keep the lights on. Focus on what keeps you competitive. Champion the use of managed services to improve the efficiency, efficacy, and performance of your organization’s IT functions.

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