“You Have to Take This On”: HIT Leaders Share Best Practices for Application Rationalization

When Chuck Podesta assumed the CIO role at Renown Health two years ago, a mammoth task awaited him. The four-hospital integrated delivery system had 728 active applications on the network, which was costing nearly $30 million per year for software maintenance — not to mention putting the organization at risk from a security standpoint.

The situation was untenable, to put it mildly. “There are so many tentacles to this thing,” said Podesta during a recent panel discussion. The biggest issue, however, was a lack of IT governance. “People were buying whatever they wanted to buy. That’s how it all starts,” he added. And when the problem isn’t solved, “they go out and buy something else and plug it in — maybe it works, maybe it doesn’t.”

In the meantime, IT departments are saddled with a host of issues that need to be resolved, quickly.

“We’re in an age where it’s easier than ever for people to obtain software, whether it’s a phone app or cloud-based,” said Matt Everhart, Associate CIO for Applications at Denver Health. “That creates a burden for us to integrate them and make them safe after they’ve already been purchased.”

And the problem isn’t going away anytime soon, which is why application rationalization has become such a critical priority for CIOs. During the webinar, Podesta, Everhart, and Jeff Tennant (EVP, Healthcare IT Strategy and Services, ROI Healthcare Solutions) talked about their approaches and shared takeaways based on what they’ve experienced.

What’s out there

Like any initiative, application rationalization starts by defining the problem. Or more specifically, in this case, figuring out what’s on the network — which isn’t as simple as it might seem.

“You may have a piece of software that’s been on your servers for five or 10 years — but nobody’s used it for three years and nobody really knows what it does. What are the odds it’s been patched?” stated Tennant. “It’s not just about removing the expense, but also the risk piece.”

At ROI Healthcare Solutions, he encourages clients to adopt an ‘if not, why not’ approach to help reduce redundancy. “If we have something in our core system that has this function, why wouldn’t we use it? Why would we add another piece of software?” It isn’t about limiting functionality, he pointed out, but ensuring that third-party applications aren’t purchased without solid justification.

Everhart agreed, adding that application redundancy has been a challenge for Denver Health. “Everyone seems to be selling something that has a chat feature,” he said. “How many chat features do we actually need?” The more logical approach is to focus on enterprise solutions  over best-of-breed — particularly given the fact that the benefits aren’t always worth the effort.

“If you peel away everything that’s redundant and look at the difference between what is wanted and what is delivered in your other software, usually the margin’s very small,” he said. “These systems have a decent amount of overlap in their functionality. And so we’ve been trying to focus on what’s the actual difference maker.”

And it’s not just duplication. The costs stemming from unused apps can add up over time, in addition to posing security risks.

“That’s low-hanging fruit,” said Podesta. Of the 728 apps on Renown’s network, 70 weren’t being used and were “spinning on the system.” Removing those apps — and, along with them, the maintenance charges they racked up — resulted in nearly $1 million in savings.

Governance’s Role

The main factor in being able to “stop the bleeding?” Implementing a solid IT governance structure using the SBAR (situation background assessment recommendation) approach, Podesta said. What that means is all recommendations for new apps must be attached to an ROI and gain approval from both finance and senior leadership.

“That’s our IT governance,” he said. “Senior leadership gets together on a weekly basis. We put these SBAR items on the agenda so we know what’s coming in the door.”

Once that happens, there are several steps that leaders can follow to ensure a smooth application rationalization process.

• Establish ownership. A major component in figuring out the inventory is determining not just which applications are out there, but who is responsible for them. “You have to have an operational owner,” Podesta added. Everhart concurred, noting that it goes far beyond merely listing a name. “You need to make sure people understand the responsibility of ownership,” and are willing to be accountable.
• Involve leaders. At that point, he advised bringing in operations to help justify whether, in fact, new applications are necessary — and it needs to be strong senior leadership. “It can’t be IT or supply chain. It has to be the senior leader saying, ‘This is serious. We don’t need five of anything. We’re going to pick two, and you’re going to work with us on it.’ You need that strong leadership at the top to help with this.”
• Educate. One of the biggest challenges is the misperception that application rationalization requests are coming directly from IT, Podesta noted. “They look at it like one more thing IT wants them to do, and they don’t understand why,” he noted. This is where education plays a crucial role. “They need to understand that when we cut $1 million from the IT budget, that gets spread across the organization,” he noted. “That’s savings for everybody, not just IT.”
• Find low-hanging fruit. “If I were a new CIO coming into an organization, one of the first things I would want to do is embark down this path,” said Tennant. “Not necessarily to start getting rid of things, but to understand the ecosystem. Then, you can start taking little bites out of it and find the low-hanging fruit.” Demonstrating ROI can help build clout, which can serve leaders well in the long run.
• Collaborate, collaborate, collaborate. At the core of all of this is collaboration, according to Podesta, which starts by creating and fostering strong relationships throughout the organization. At Renown, he has a team that helps guide decision-making by analyzing various systems and comparing them in terms of capabilities. “You need to work very collaboratively with them so it’s clear that we’re not threatening to take things away. We don’t have an end date where we’re going to shut something off,” he said. Rather, “it’s about trying to figure out a path to get from five to three to two over a period of time. That way, we know which ones we’re going to get rid of, and we can lock in the savings.” But without that collaboration among IT, finance, operations, and other departments, “trying to get this done would be almost impossible.”
• Ask why. Similarly, it’s important to validate requests and seek to understand where they’re coming from and what specific needs aren’t being met, said Tennant. That way, “it’s not just IT folks who want to add software or take their software away.”

It may seem like a lot of pieces, but basically application rationalization boils down to a few basic principles, according to Podesta. “It’s governance, collaboration, and making sure those who utilize the systems are part of the decision-making process — both for getting rid of old things and bringing in new things,” he noted. “That’s extremely important.”

And although the process itself can be daunting, what’s far more detrimental is doing nothing at all, noted Tennant. “As an organizational leader and as someone who’s looking out for the best interests of your organization, you have to take this on,” he said. “You have to gain the support of senior leadership. You have to gain the support of the clinicians. It’s not easy. But when you start to show that ROI, it becomes easier to sell.”

To view the archive of this webinar — Strategies for Pursuing a Comprehensive Application Rationalization Approach — please click here.