Reducing capital and operational costs through outsourcing: Ep 17, HealthcareTalks

Medical Technology, Healthcare & Government IT

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Often, outsourcing can really save you a lot because it going — it’s going to reduce what your capex and move it more to an opex. So it’s going to reduce your capital requirements because you’re not going to buy storage area networks. You’re not going to necessarily have to buy and pay for small amounts of tapes that you’re — you might buy instead of the outsourcer that might buy ten times as many or 100 times as many as you need. So pure capital, you don’t need to buy the same kinds of equipment. And that includes tape machines. It could include hard drives. It could include new style SSDs, new style file storage, uh, environments, or storage area networks.

So that’s one area that’s pure capital. But that might even be dwarfed by the expertise you need. So a person who understands storage area networks, who understands, um, backups and tapes and archives, et cetera, could cost you 100,000, 150,000, $200,000.00 a year to pay for and maintain on your staff. So you get a really good capex reduction. You’re not having to buy personnel and keep them trained, managed, up to date, et cetera, so it reduces your, uh, HR and human capital cost pretty quickly, which is also, uh, a big assist.

And now when you move to an operational expenditure, you have a much more stable price. So you’re going to get a price that says, “Here is your price per month. Here is your price per year. This is based on your data requirements how much the price will increase,” and that makes it easier for you to budget in an annual or a — or a two-year cycle that many, uh, hospitals are in. So when you need to go to your CIO or you need to go to your CFO and they say, “How much is this all going to cost,” when you outsource it, you can actually give them that answer. If you don’t outsource it, you have to do a lot of finagling with these numbers and say, “Well, if we have this much data, we can have two people. If we have a lot more, we’re going to have to add more.” So stability and understanding the cost, uh, is one thing, but being able to predict it and say that this is what it’s going to look like two years from now or four years from now or six years from now is a whole ‘nother thing.

So uh, cost can play a big, big role in outsourcing, and it makes life a lot easier if you can handle that.

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