Published August 2021
Justin Campbell, VP, Strategy, Galen Healthcare Solutions
After years devoted to the adoption of best-of-breed strategies, the infusion of technology into clinical workflow, and mergers & acquisitions, health systems are suffering from information technology portfolio bloat. This bloat threatens their very survival, as more resources have to be devoted to maintenance, less to innovation. No new project can be launched when the overwhelming preponderance of resources must be applied to the current application portfolio and infrastructure.
In short, information technology portfolio bloat threatens healthcare delivery organizations by diminishing their agility. As complexity in IT continues, costs rise, responsiveness and speed lag, and new security threats emerge. Meanwhile, downward costs pressures have been intensified by COVID-19, while mergers and acquisitions complicate efforts to retain important data. We have reached the point where rationalizing the application and infrastructure landscape has become critical to driving costs out of IT, optimizing the functions of the workforce, and accelerating innovation.
What Must Be Done: Application Portfolio Rationalization
In business management, “rationalization” is a strategic initiative that usually means the company is being reorganized to increase operating efficiencies. When applied to application portfolios, rationalization aims explicitly to improve efficiency by reducing complexity and lowering the total cost of ownership. It entails:
- Retiring aging and low-value applications
- Modernizing aging and high-value applications
- Eliminating redundant applications
- Standardizing common technology platforms and versions
- Consolidating the applications – physically and logically
All of this must be done without losing sight of every business unit’s need for responsiveness. In the healthcare IT environment, rationalization requires “application decommissioning,” a strategic approach for systematically retiring outdated and costly legacy applications – without compromising business needs or compliance requirements.
To reduce operational spending and complexity, the application portfolio can be rationalized through a set of application cost, count, and risk reduction activities:
- Reduce costs: Eliminate licensing, development, support, and infrastructure costs of legacy applications
- Retire technical debt: Migrate from on-premises platforms to take a cloud-first approach, and remove support software versions, legacy architecture patterns, and legacy hardware
- Eliminate functional redundancy: Remove fragmentation, functional overlap, and superfluous integration
- Reduce risk: Focus on and act to enhance high availability, security, scalability, and compliance
The last bullet is of the greatest importance. Applications on aging technology that have outlived support are significantly more vulnerable to cybersecurity threats. This is no surprise since many legacy systems are forgotten and therefore do not receive the latest updates, patches, and anti-virus remedies to ensure security. Furthermore, legacy systems typically do not have active users who can identify abnormal behavior. According to the HIMSS 2019 Cybersecurity Survey and KLAS, 90% of hospitals are keeping old applications running to preserve data when an application is replaced or retired, causing 75% of hospital IT staff time to be consumed by legacy systems that cost more in annual licensing than hospitals pay their IT staffs in wages. In addition, the security of these legacy systems has been continuously compromised: (4.3 million health records affected in 2017; 90% of hospitals affected since 2016).
Ultimately, each healthcare delivery organization must formulate a risk profile of their application portfolios and rank each of those applications in terms of their functionality, the type of information processed, and its business value. A comprehensive risk assessment will make possible a prudent, cost-effective blueprint for consolidation, remediation, or elimination of legacy applications.
For more information, read Part II of this series “A Blueprint for Healthcare Application Portfolio Rationalization,” or download the full whitepaper, Healthcare Application Portfolio Management & Decomissioning, which provides methodology and insight to improve IT responsiveness, reduce costs, and improve security posture.
About Galen Healthcare Solutions
Galen Healthcare Solutions is an award-winning, KLAS-ranked healthcare IT technical and professional services and solutions company providing high-skilled, cross-platform expertise. Since 2005, Galen has partnered with specialty practices, hospitals, health information exchanges, health systems and integrated delivery networks to provide high-quality, expert level IT consulting services & solutions including strategy, data archiving, data migration, optimization, project management, and interoperability. For more information, visit www.galenhealthcare.com.
