The Often Elusive but Attainable True ROI of Your IT Investments

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Go beyond the obvious financial calculation to consider the value in freedom of focus.

The practice Administrator paused when her “IT guy” recommended yet another server upgrade. The practice was suffering from intermittent outages…again. It was becoming an all-to-familiar part of their culture. Not only were business office and clinical support staff frustrated, the negative impact was spreading to physicians and patients.

Obviously the practice needed the IT infrastructure to perform with the reliability of a utility. But she didn’t have the time or knowledge to micromanage the people supporting it. And while she wasn’t sure of the exact path, buy another server or consider a second opinion, she was sure it was time to carefully consider the value the practice was receiving from both the infrastructure and their support partner.

More to the point, she needed a tangible, valuable solution…one with an ROI. But what is ROI, really?

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Welcome back to the Systeem Blog where you can find nuggets useful in achieving peace with technology. I’m your host and physician practice technologist, Michael Patrick. Today’s post is the third in a three-part series on the essentials of trust in achieving that peace with technology. Let’s get back to our question, answer it, and see how the story ends.

So what is ROI?

Many people define ROI as the amount saved or realized minus the cost to invest on a purchase or project. Spend $10,000 for a new technology, make $12,000 because of it, and a $2,000 Return On Investment is achieved.

Simple but not necessarily accurate…especially in a physician practice. On its face, purchasing a new server just looks like another line item expense. Right?!

Before ROI can be accurately calculated, a thoughtful determination of the criteria for value must be determined. And contrary to popular opinion, value is not exclusively determined by a financial equation. The best practice for setting value criteria considers factors beyond pricing and associated implementation costs to include difficult-to-quantify things like culture, change-readiness, adoption, productivity, and cost avoidance.

Importantly, when considering investing in outside specialty partners (IT support, software companies, and other tech partners), there is a unique and useful value criteria related to, but not the same as, productivity. That criteria is the “freedom of focus”.

“Freedom of focus” is a max value that you and your team achieve with the investment in a third party team, service, and/or product. That investment frees you and your team with more actual time AND the peace-of-mind to focus on higher value work priorities in the use of that time. The time is the quantity measure. Peace-of-mind is the quality measure. Maximizing both, together, means you are achieving the “freedom of focus”.

So how is “freedom of focus” actually determined?

To answer that, let’s turn back to our story about the practice administrator and her decision path. She decided that something didn’t seem quite right about the recommendation. When she pressed for options, no viable options were provided. It was then that she invested a few minutes of thinking time to determine an estimated ROI including the “freedom of focus” value.

In this case, determining ROI inclusive of “freedom of focus” factored the following key items:

1. Cost of new server (hardware)

2. Cost to implement (third party fee)

3. Cost of staff time required to support the depleted state operations + implementation efforts (estimated # of hours x blended hourly employment rate cost which is determined by multiplying the hourly pay rate times an admin burden like 1.25)

4. Cost of new hours required to still complete higher value priorities that were delayed due to implementation project

5. Cost of additional electric utility

In short, there was no ROI. And the long-term value was simply an end to the short-term pain…which is just an end to a bad situation rather than an ROI.

So the exercise led to exploring a second opinion…and hopefully at least a comparison to an alternative. While this decision initially cost an additional investment of her time and the related cost of delay due to evaluation, it would still deliver a short-term peace-of-mind in achieving clarity as to if there was a better answer. The next step was a call on Systeem to assess the overall performance of their infrastructure. The assessment concluded with a recommendation to partially and securely virtualize her infrastructure.

Now her ROI determination would have an alternative and viable outcome to consider…one that delivered more than simply ending the current pain. Virtualization delivered an ROI encompassing the transformation of short-term costs into investments that delivered long term gains in both direct cost and the often elusive “freedom of focus” including:

• Avoiding the cost of a new server and implementation

• Avoiding future infrastructure maintenance costs (direct cost and lost productivity)

• Improved reliability of the entire infrastructure

• Improved performance of applications

• Reduced power consumption and related utility cost

• Preservation of time for higher value work by staff

• Uninterrupted physician and patient interactions

• The message of a greener utility footprint

The lesson here: the practice administrator didn’t let the frustration of a tactical problem with a strategic asset, nor the absence of a sound recommendation prevent her from objectively creating her ROI value criteria and then achieving it. She instead sought a complete ROI perspective by looking beyond the obvious financial calculation. She managed to not only solve the short term problem, but also achieved a valuable long term ROI.

That brings us to the conclusion of this third and final part in this three-part series on the essentials of trust in achieving peace with technology. The next blog series is just around the corner. In the meantime, feel free to comment on this post, review previous posts, or share it with your team and colleagues.

If you are interested in learning more about how Systeem could help your practice, please contact our sales department at 940.484.0850 or send us an e-mail.