At a high level, value-based healthcare is a relatively simple concept: It’s a payment model where value is determined by the quality of care, therapy and patient outcomes. Recently, the rallying cry for value-based care in the U.S. has grown louder, challenging the traditional fee-for-service model, which incentivizes providers, hospitals, and drug and device manufacturers to prioritize volume of services over outcome.
Simply put, the traditional model is not working, and right now, I’d argue that traditional approaches to IT are in a similar position.
With a value-based model, the goal is that everyone benefits. It’s a quality versus quantity, more ‘bang for your buck’ way of operating. While IT departments are vastly different from the complex world of healthcare, a value-based IT model would prioritize positive outcomes from IT services at every level of an organization, rather than busy work and task volume.
We’re currently in a heightened state of digital transformation, and that also means we have an opportunity to reimagine IT in a model that distributes greater value to everyone.
Three goals to achieve through value-based IT
The pandemic, the Great Resignation, the New Normal, the looming recession — all of these defining moments have had an ongoing influence on business operations. As such, there’s urgency for businesses to reduce spend, drive operational efficiencies and create exceptional experiences for employees. There’s an urgency for more positive business outcomes at lower costs. Value-based IT is the way to achieve that.
In our new normal, cloud infrastructure and applications have become the lifeblood of the modern organization. As such, IT plays a critical role in their successful implementation, utilization and optimization. When it comes to aligning IT and their expertise with long-term business goals, though, things begin to break down.
In a value-based model, IT would work closely with executives, department and line-of-business leaders in a strategic, consultative role so they can align IT priorities, projects and ongoing recommendations with those business goals.
Let’s dive into three goals — financial sustainability, operational efficiency and positive employee experiences — and how value-based IT can help your organization achieve them.
Goal one: Financial sustainability
Amid economic uncertainty, cost control is top of mind and IT can be a critical partner in achieving that.
Businesses are currently struggling to manage cloud spend and understand its true cost. That’s because it is difficult: The nature of cloud apps and the ease of adoption means everything is decentralized. The data they need to analyze spend, usage and value is fractured and distributed across teams.
For value-based IT, the priority becomes centralizing that data and proactively surfacing insights. For example, if organizations integrate all SaaS applications with a single source of truth, IT can gain visibility into and analyze the full scale of software cost and usage data, and with that, take action on unused licenses, empty user seats, application redundancies and other costly variables that have flown under the radar.
Importantly, other departments will benefit from this data-effort. Procurement and Finance will finally have access to answers they need for effective budget planning, and lines of business can see if they’re wasting money on unused technology.
Don’t think of this as a one and done kind of event. With an SSOT, IT and any stakeholders with access can continue taking actions toward future spend optimization.
Goal two: Operational efficiency
Technology is fundamental to achieving operational efficiency, and yet IT bottlenecks are incredibly common. Perhaps it’s because many IT departments are treated like the emergency room of an organization, operating in a reactive state to treat tech problems and urgent requests.
As various departments come to IT seeking ways to improve their own operational efficiency — requesting reports, security reviews, access to applications and bug fixes all marked urgent — IT’s efficiency suffers as they try to keep up with a growing mountain of tasks.
For value-based IT to work, IT must first get out of this reactive state. If IT is more aligned with departmental operations and given the runway they need to prioritize “big rock” projects that add tangible value to the company, organizations can cut down those bottlenecks that lead to long wait times, project delays and operational waste.
Additionally, IT should develop more ways for end-users to self-serve on tasks — think a shoppable app catalog — and deploy more intelligent automation technologies that free IT from time-consuming, repetitive and manual tasks.
Goal three: Positive employee experiences
In our new normal, applications are our digital HQ. They enable us to do our jobs, facilitate brainstorm sessions, product road mapping and even virtual happy hours. They underpin the employee experience.
One way for IT to support positive and productive employee experiences is to make sure everyone can access tools they need on-demand. For new employees, having the tools and apps they’ll need locked and loaded on day one.
If IT approvals are holding employees up, you can bet they’ll be frustrated and find their own solution — one of the driving forces behind Shadow IT. In some instances, employees are even willing to leave a company over its sub-part technology and services. Removing those IT approval bottlenecks isn’t just contributing to operational efficiency, it’s going to contribute to employee satisfaction.
Employee satisfaction factors into individual success and overall retention, and a recent survey revealed that employee satisfaction is also the top method organizations use for measuring the impact of SaaS technology. As organizations pursue peak operational efficiency and cost optimization, they must also be mindful of which apps help keep employees satisfied in their roles and careful not to cut those from their SaaS stacks.
Usage data will clearly show which apps are being used the most and by whom, but what that data doesn’t tell us is the qualitative side of the story — employee sentiment. Which apps are the fan favorites: The ones that make your employees’ jobs easier or that they even enjoy using? If there are two apps with overlapping capabilities, which would your employees prefer to keep?
With a value-based approach, IT engages with the end-users to understand their needs and preferences to inform software decisions and advise procurement teams as they manage SaaS contracts.
Not only does this help organizations use discretion when IT is tasked with eliminating waste, cutting costs or improving efficiency, but it can also build greater trust between employees and IT.
Optimal outcomes require alignment and collaboration
By pursuing value-based IT, organizations have the opportunity to rethink the purpose and direction of the IT department so that they align with end-user needs and support the mission of the company.
The key to success will be determining how IT can partner with the rest of the company to facilitate the outcomes key stakeholders want to achieve. To do this, IT must be given the tools to connect the threads between data, departments and people, and the willingness of the organization to collaborate around the shared goal of delivering value to and for everyone.
Uri Haramati is co-founder and CEO of Torii, whose automated SaaS management platform helps modern IT drive businesses forward by making the best use of SaaS. A serial entrepreneur, Uri has founded several successful startups including Life on Air, the parent company behind popular apps such as Meerkat and Houseparty. He also started Skedook, an event discovery app. Uri is passionate about innovating technology that solves complex challenges and creates new opportunities.
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