A CIO's tale: Fashioning an infrastructure without a budget

One CIO shows how it's possible to change a company's IT infrastructure while reducing costs--even without a budget. He used a little ingenuity, a lot of planning, and good resource allocation to foster cost-effective change without big spending.

I was initially brought on-site as a consultant for a 27-facility healthcare management organization and given the task of developing an infrastructure that would support the company’s needs. My first visit to the hub room—which was no bigger than a phone closet—should have rung warning bells in my head. The room was empty except for a large pile of dirt, dust, and trash.

My network implementation specialist and I were truly taken aback by this, since we were to begin server installation within the week. While the mess in the “hub room” wouldn’t prevent the installation, there appeared to be a bigger stumbling block—a frame relay line apparently hadn’t been established back to the central office at the consulting firm for the connection to the AS400 and MS4 application.

A company manager quickly assured me that the computer room would be cleaned, and I was able to determine that a 128K-frame connection was in place, just not labeled, and the local telco could rectify that immediately.

The next site visit proved more fruitful. We established our router connection and set up the SNA server. We then began to set up the database server and Citrix server for the nursing home application that my company was providing. We established connectivity for two hospitals and set up SNA servers for both. This provided the first client/server connectivity for all three locations.

We also established connectivity to the company’s many nursing homes through a 56K frame network across three states. The ASP handled almost everything for the company.

Due to its limited knowledge of IT systems, the company was completely at the mercy of the ASP. During the project work, I moved from consultant to project manager and then to acting CIO for the healthcare firm. It was at this point that I faced resolving issues related to past IT decisions.

Taking the helm
While the consulting and ASP efforts cost the company millions of dollars, I certainly knew I wasn’t going to have a million-dollar IT budget to run with. In fact, my CEO quickly informed me that the huge infrastructure investment had depleted all of the IT department’s budgeted resources, except for the salaries for a network administrator, a field technician, and me. There was money for the monthly fees for MS4 and frame relay lines, but very little money for new PCs or any network improvements.

I was a bit daunted, but I believe the one place you should pay the price is in your staff, since solutions are tied to having quality staff.

I hired a longtime friend and coworker as my network administrator. Jim had an MCSE and a Novell CNE as well as years of experience with network systems in the Navy and in civilian life. He had the ability to provide remote management and service for our many locations.

I hired a local technician I had been working with through a local computer company. Mike is an excellent desktop technician who stays current on new OSs and applications as well as tools to work with these desktops.

It was my job to handle AS400 tasks and manage the relationship between the ASP and the company. I’d also handle vendor relationships, purchasing, and contract negotiations. I developed the policies and procedures documents for the IT department.

At this point, I began to create and develop a formal IT strategy.

Revamping the current approach
The company was very diverse and without a specific business direction. It consisted of a few small hospitals, nursing homes, and corporate facilities that needed to be connected to provide timely information to management. It had hospitals with nonstandard applications, nursing homes to connect to the main office, and new nursing homes that had to use dial-up connections. To add to the complexity, the company was constantly acquiring and losing facilities.

My plan was to provide an infrastructure that could adapt to any situation the company would require. The first step was to connect the desktops to the AS400 via TCP/IP and free up the SNA servers at the two hospitals and the corporate office. These servers became file servers for the three locations, providing drive space for important files as well as a method to back up those files. In the corporate office, a file server was already available; this server became an experimental machine for trying new apps.

The next step in our plan came with outsourcing our e-mail and Internet services centrally at the corporate office. Previously, the company was using the ASP to provide e-mail and Internet services for three locations. I negotiated contracts with two new providers: one to provide a T1 line and another to provide e-mail hosting on the Internet.

I estimated that this new approach cost us about the same as an SMS setup, except we now had access to the Internet directly from the corporate office and an opportunity to expand the network’s capabilities.

Reducing costs
As a way to reduce costs, we planned to connect the nursing homes using inexpensive DSL and broadband cable and VPN. We implemented this plan with two local offices and one remote office to provide connectivity to the corporate office—which meant saving the cost of T1 or frame relay lines.

But before we could implement the VPN solution for the nursing homes, the company released the nursing homes from the organization, leaving only the hospitals. The VPN solution gave the company the quick-and-easy access it would need to respond to new hospital-related ventures.

While working through these issues, we found a shareware e-mail server application and set it up on a local server. This let us discontinue our e-mail with the outsourcing vendor and gave us complete control of our e-mail services.

The basis for the company’s infrastructure was complete when we were able to provide connectivity through VPN, frame relay, or dial-up connections.

Final strategy phase
The last leg of my strategy was to purchase a client/server-based application that could be installed at the corporate office and controlled by the IT department. This would be a less expensive operation than the currently outsourced MS4 application, and it would also provide more internal control.

My whole strategy was simply to reduce the overall cost and increase the services available. The cost reduction came through reducing the costs of communications lines and the total costs of applications such as e-mail and hospital accounting software.

The return on investment (ROI) included several other benefits. There was an increase in services due to faster response when adding new facilities to the network as well as improved control of the applications that the company provided for its hospitals.

Strategy lives on despite management change
While my role at the company came to an end due to budget constraints, my IT strategy is still in place. The company will be adding another hospital and, instead of using the outsourced MS4 product, they’ll acquire a client/server application and centralize the server at the corporate office, providing a platform for adding future hospitals.

Two years remain on the application-sourcing contract—enough time to provide a tried-and-true central application for the two hospitals that are still using MS4. This will complete the process and realize my goal of providing low-cost, dependable, and flexible IT functionality to the company.

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