Health Care Providers

Identifying Cost Reduction Targets in Health Care

Health care organizations are under constant pressure to reduce costs and improve patient care services. On top of that, they have the increased scrutiny from oversight agencies and regulations demanding transparency of operations. And yet, we have found health care IT organizations have a unique opportunity for cost reduction.

Hospitals, in particular, because of their standardized (compared to other industries) IT service offerings and unique user profile, can take advantage of virtualization technology and careful analysis of their service offerings for significant cost savings. With respect to front office health care specific applications, in many cases these applications can be virtualized and served from a central data center s with significant savings in licensing and support fees. Server virtualization can be used to consolidate data center infrastructure and improve flexibility. And standardizing applications, services and desktops around fewer offerings saves in support and purchasing discounts.

But it is difficult to know where to apply these projects, how much savings is possible or where to standardize without a thorough understanding of IT service costs. Apptio helps IT organizations model their IT costs to provide a Total Cost of Ownership (TCO) per IT Service, per Line of Business (LOB) or per data center. Apptio’s unique software automates the building of the model making it quick and easy to get an accurate picture of the IT cost structure. Once a model has been created, IT managers can use Apptio’s analytics engine and custom reporting capabilities to compare costs across services, infrastructure types, data centers or geographies in order to find areas for cost reduction.

A Case Study: Desktop Savings at a Midwest Hospital

A large hospital in the Midwest was facing the same issues. The IT architects fundamentally knew that replacing their desktop software environment with Citrix XenDesktop® would provide significant operational savings, but they were having a difficult time quantifying it, and thus justifying it internally. With Apptio, they were able to create a sophisticated, yet flexible, model to understand their fully loaded costs of provisioning and supporting desktops (including software licenses and support) and used “What If” scenario planning to build out a similar model with XenDesktop. They found that their total cost of ownership for desktops using Citrix XenDesktop was 25% less annually, based largely on reduced support costs.

Benefits of IT Cost Transparency

With Apptio, customers such as Blue Cross Blue Shield of Kansas City, are able to:

• Accurately understand their cost per IT service, function or application
• Analyze cost drivers to find new areas for IT cost reduction
• Quantify ROI and justify new IT projects based actual cost data and track project success over time
• Provide transparency of IT cost structure to the CIO and other key stakeholders
• Build an accurate model in a matter of days, not months, for quick decision support

Getting Started with IT Cost Transparency

Many companies in all sectors are turning to IT Cost Transparency as means to optimizing IT operational efficiency and finding new areas for cost reduction. Nowhere is this more necessary than in the financial services companies. Apptio simplifies the modeling of IT costs and provides the insight to find and successfully propose new cost reduction projects. To get started today contact us for a Free Demo and on-site Proof of Concept. Or to learn more download our solution whitepaper or one of our customer case studies.