Application rationalization is defined as the process of strategically identifying applications across an organization to determine which should be retained, replaced, retired or consolidated. You could argue that this is somewhat intuitive, and that CIOs have been doing this forever. However, it has not always been done well in healthcare, where multiple major applications are usually in use. A HIMSS Analytics study concluded that the average hospital is dealing with 16 different EHRs (see chart below), even if they do not own them all. Even if your number is half that, multiple is likely to be the answer for a while. There are also “non-major” applications such as niche clinical software and web-based tools that form part of the applications ecosystem. This is even more challenging today with a plethora of mobile apps used by clinicians, staff, and patients. Add to that the fact that major applications are almost never in a prolonged state of stability, where version upgrades, product roadmap implications, integration projects, and interoperability issues, are all at rest. If you find yourself in such a nirvana, enjoy the moment…
Rather than aiming just for rationalization which works toward an enhanced operational and financial state for IT, alignment with the business strategy and tactics may be a preferable approach. In a rapidly changing healthcare landscape, with affiliations, M&A, divestitures, and a focus on the broader continuum of care beyond your four walls, you could argue that tactics are more immediate, more challenging, and often take precedence. While there is a solid expectation that as CIO, you are rationalizing and optimizing your resources well, your agility is often a key component of all aspects of operations, strategy, and tactics for the larger organization. For the CIO, the lens of organizational strategy and tactics accomplishes a few things:
- It introduces organizational prioritization. Strategies and tactics have timeframes, and the need to enable them with IT resources will therefore have clear priorities and timeframes.
- It produces alignment. Organizational priorities should coordinate individual C-Suite member priorities and synchronize collaboration. IT Governance should be facilitated.
- It facilitates budgeting and resource allocation. If the projects and operational improvements are directly (or even indirectly) tied to goals that are articulated in business terms, requests for resources are more easily understood and approved. If priorities are clear, resource commitment should follow.
This is not to suggest that infrastructure improvements, product life cycle replacements, and other “lights-on” efforts will lack attention. To the contrary, tying them to strategy or tactics as enabling (or mitigating risk), can often elevate them in priority. Retiring those applications and efforts that have no linkage going forward, might be expedited. The suggestion here is to go beyond application rationalization, or viewed another way, to more explicitly use organizational strategy and tactics as the lens for rationalization.
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