Enhancing the healthcare enterprise with cloud technology
There is no question that the cloud has made solid inroads in enterprise environments, including healthcare. New research from Harvard Business Review Analytic Services (HBRAS) indicates that cloud usage in the enterprise continues to rise. The research found 84 percent of respondents reported their organization’s use of cloud computing had increased in the past year.
Moreover, the report found that enterprises are definitely seeing tangible customer benefits, improved collaboration, and bottom-line growth as a result of deploying cloud applications. Of the respondents, 72 percent said their use of the cloud increased collaboration options, 71 percent reported business agility had been improved and 40 percent indicated the cloud has enhanced revenue. According to the HBRAS researchers’ conclusions, adopting cloud technologies has gone from being a competitive advantage for early adopters to being a competitive disadvantage for those companies who are hesitant to do so.
While lingering hesitancy to adopt cloud solutions in the enterprise may be rooted in the historical experience of IT organizations that are more familiar with the implementation of on-premise software solutions, serious consideration should be given to three major benefits noted in the HBRAS research that cloud-based solutions can deliver to the organization: agility, scalability and total cost of ownership.
These three important benefits hold the promise to deliver improved collaboration and sought after return on investment, serving the critical goals of both the business users and the IT organization within the company. Let’s take a closer look at each.
It would be easy to assume that the initial deployment time for cloud and desktop (on-premise) applications are very similar. However, two areas that impact overall deployment time should not be overlooked: capabilities and accessibility.
Capabilities: Typically, cloud applications have more robust capabilities than on-premise software, making them easier to use and manage by a broader group within the organization. This attribute delivers on the promise of faster deployment while, at the same time, improving the potential for collaboration across the enterprise. The reason why overall deployment of cloud applications often takes less time than desktop applications is that so much of it can be performed by a wider range of (less technical) users, rather than being dependent on the already overburdened schedule and resources of IT.
Gaining the ability to react quickly to market forces and retool applications to take advantage of competitive opportunities enables business users to maintain a competitive advantage. For example, if the need arises to redesign customer-facing content, such as a critical customer document to keep it compliant and effective, the capabilities of software as a service (SaaS) applications greatly simplify this task compared to on-premise applications, which typically require IT involvement to configure them.
Additionally, it is often the case that participation from external teams becomes necessary to complete a task. However, collaborating using on-premise systems designed for a particular workflow can be difficult because such collaboration wasn’t anticipated in the original design of the application. Again, modifying the application to enable external collaboration may involve delays and expense associated with engaging the IT department in the process.
Accessibility: Once a cloud application is deployed, it is ready for use by an unlimited number of authorized users. An on-premise deployment, on the other hand, requires initially configuring servers and other common services and a few desktop users and then later repeating the same number of steps – involving the same amount of time – for each additional user.
Typically, a healthcare organization can achieve deployment using a SaaS model within one or two weeks. Once deployed, the cloud system can be accessed by an unlimited number of users within a short period of time. The on-premise deployment would often only be ready for a few users in that same timeframe. Another challenge with deploying on-premise software to larger numbers of users is that the actual elapsed time to upgrade everyone can be lengthy and cumbersome, creating potential problems such as personnel using different versions of the same software during the upgrade process.
Another robust feature of cloud applications is their ability to scale on many fronts, including performance, capacity, user base and the application itself in terms of the extent of functionality that can be added quickly. Desktop applications, on the other hand, have much more overhead in these areas, including cost and time. Moreover, the cloud scales in real time whereas desktop applications do not. Cloud architectures permit secure distribution of operational activities, allowing companies to assign and make real-time adjustments to the services they require to increase or decrease their capacity as their business objectives change.
3. Total cost of ownership
Comparing the basic software price against the subscription fee does not tell the whole story when calculating TCO. In many cases the savings for on-going costs such as maintenance and upgrades can be exponentially higher for on-premise applications than with a cloud application. Moreover, in a cloud deployment maintenance and upgrades are often more transparent to the user and involve a process that happens once on a single server. On-premise applications, on the other hand, require ongoing investments of time and resources for each user plus any centralized servers and services.
These differences can greatly affect TCO. With a cloud solution the costs required to make adjustments when employees leave or new users are added (which includes installation) can be relatively low compared to using an on-premise software. In fact, depending on the requirements, a SaaS deployment can deliver 10 times less total operating cost as the same deployment using an on-premise application.
Putting it all together
A 2014 survey by Gartner found that global buyers of cloud applications cite cost, innovation and agility among the reasons for adoption. The research firm predicted that the deployment model for on-premise software will shrink from 34 percent to 18 percent by 2017. According to Gartner, “Key drivers for SaaS include the fact that ‘hands off’ IT enables redirection of limited in-house staff to other responsibilities since the SaaS provider is responsible for ongoing support. Rapid deployment and faster access to innovation are also important since SaaS vendors are able to roll out applications when you are ready and lower upfront costs with a pay-as-you-go pricing model.” Gartner anticipates a continued rise in SaaS deployments for mission-critical applications.
Healthcare organizations should give careful consideration to cloud SaaS solutions as an effective means to free up internal IT resources for mission-critical tasks while at the same time gaining agility and scalability, enhancing collaboration and reducing total cost of ownership. Adopting this increasingly popular model for IT deployments can help the entire organization keep pace and remain competitive in today’s rapidly changing healthcare marketplace.