Real ROI of Archive & Retirement Services: Saving Money, Reducing Risk, and Running More Efficiently

“Please make sure this never happens again”. It’s funny how the message changed in a very short period-of-time.  A few weeks prior to this, my project sponsor was adamant about the need to show real dollar savings in order to keep our project funded and moving forward. Now, after a catastrophic event that rendered key business processes unavailable, the message changed. Real dollar savings were now taking a back seat to mitigating business interruption. As a young – and very green – technology consultant, this conversation has been seared in my memory. No, it wasn’t an Application Archiving project, yet the same premises still apply.

With finite resources and lots of good ideas, businesses prioritize (and re-prioritize) projects; determining which projects save them the most money or which projects help them better align their business processes.  It is either a forward-thinking and insightful management team, or a management team showing the scars of a catastrophic event, who make risk mitigation a priority when deciding whether or not to fund a project.

In my last blog I discussed how Baptist Health (of Kentucky) averted significant business interruption by moving  data from antiquated applications to an archive shortly before events took place that could have rendered that data inaccessible. My Baptist Health management team; forward-thinking and insightful.

You see, to them, Return-on-Investment (ROI) is about putting together several pieces of the puzzle. Yes, hard dollar savings are important. So is risk mitigation. Soft dollar savings in the form of streamlining business processes and operational efficiencies are also valued. ROI to Baptist Health, is about Business Value.

Hard Cost Savings

Hard dollar savings calculations are straight-forward enough. To guide our application archiving customers, Dell Technologies presents them five primary categories for consideration:

  • Total Server Cost
    • Server Hardware Retired
    • Server Support Eliminated
  • Total Software Cost
    • Application and Database Licenses / Annual Maintenance Fees Eliminated
    • Direct Labor (Subject Matter Experts) Support Eliminated
    • Training and Other Costs Mitigated
  • Total Operations Cost
    • Labor, Maintenance, and Support Costs Reduced or Eliminated
  • Total Facilities Cost
    • Data Center Costs (A/C &Power, Security, Network, Hosting Costs) Reduced or Eliminated
  • Total Backup Cost
    • Backup Costs Reduced or Eliminated

This is Dell Technologies’ Application Archiving ROI Framework for capturing hard-dollar costs. Using this framework, we work with each customer to tailor an ROI model that works for their organization. Over the years, I’ve come to understand how differently organizations capture cost data and how readily accessible that cost data is.  It goes without saying, but in healthcare particularly, the applications being archived are often as a result of acquisition and consolidation activity. Quite often we find yearly cost detail and other costs are not easily retrievable.

Good record keeping at Baptist Health helped as we began to quantify the real dollar savings associated with retiring their legacy applications; though cost detail for some applications was hard to find. Because not all application cost details are available and because the Baptist Health archiving program leadership team chooses to include only those savings that are verifiable, the ROI results- though impressive – are more than marginally understated.

Healthcare and Finance are industries ripe with opportunity for strong application archiving ROI. In both, continued access to data is a function of policy and compliance requirements. Rarely in healthcare do we see retention requirements less than 7 years.  Often, as is the case with data relating to care of Minors, data retention requirements are 21 years. The one-year ROI for Baptist Health is very good, with the two- and three-year ROI being even better. As you can imagine the 5, 10, and 21, year numbers are phenomenal. As more applications are archived at Baptist Health, the ROI story continues to grow.

Hard dollar savings exceeded project costs once only 16 applications had been archived; meaning we were saving more money than the program was costing to run.  At the end of the program’s third year – and after close to 70 applications archived – real dollar ROI is projected to be 28% above the cost it took to archive those ~70 applications. Baptist Health’s Application Archiving Program is self-funding.

Risks of Aging Applications

Adoption of Baptist Health’s application archive has been swift and without reservation.  Be it a care-worker looking up past patient records, or financial resources referencing billing details, or Release of Information resources aggregating information to comply with records requests, we see the use of the archive increasing.

Access – often immediate access – to this data is necessary.  With aging applications there are so many things that can impede this access. Legacy hardware failures, unrecoverable passwords, and application expertise becoming stale or leaving the organization all contribute to a level of confidence as to whether the data is accurate and accessible when needed.

The hardware hosting these applications are rarely modernized and are susceptible to breach through exploitable vulnerabilities. On a number of application hosts, the Baptist Health Security team found thousands and hundreds of thousands of potentially exploitable vulnerabilities. The application archiving program is enabling the retirement of much of this vulnerable and exploitable older hardware.

In healthcare we see application vendors consolidate at a rate faster than the healthcare institutions that use their applications. Larger vendors are buying smaller vendors and – though vowing to support these legacy applications – the new software vendor organization looks to phase out these older applications as soon as possible.  Support for these applications is minimal. Updates are non-existent. These applications too are exploitable through vulnerabilities.

So, as we archive the data in these older applications we’ve run across several instances where finding vendor expertise to help us gain access to the data has been problematic.  As with everything, time marches on. Those that knew the applications have either gone on to bigger and better things or left the workforce entirely. The older the application gets, the harder it is to find people who have the expertise in it and are willing to support it.

The Third Leg

Imagine a world where access to the data in these legacy applications is centralized.  In this world, Users hit a single URL to access an archive. Once there, integrated network credentials present a customized landing page showing each User only a list of archived applications to which they’ve been granted explicit permissions. Because the interface to these applications is consistent in look and feel, the need for User training is minimal.  IT operations supports only a single platform. Updates to address new vulnerabilities are now necessary on only a handful of easily managed servers. System knowledge and expertise are intuitive and easily obtained.

How does an organization quantify the value in this single centralized platform? How does an organization understand and measure the savings in training dollars or in User efficiencies gained? How does an organization place value on peace-of-mind and knowing that the data the organization is mandated to keep is available to them and will be for as long as they want and need it?

Pulling it Together

Each organization will view ROI a little differently. Capturing hard dollars savings is the most straight forward. At Baptist Health each most applications yearly license and support costs are easily discoverable; a few are not. So are yearly database license and maintenance fees. To track yearly server maintenance and support costs, Baptist Health allocates a single dollar value that can be applied to each server. This value includes a differentiation between physical and virtual servers (it costs more to keep a physical server running each year). It includes an estimated amount for labor to support a typical server in their environment (labor costs). Facilities costs and backup costs are part this cost allocation, as well. It is, primarily, these three elements (application costs, database license costs and server costs) from which each application’s ROI is derived. ROI projections over a period of time (1, 3, 5, and 10 years) are calculated by adding yearly costs together and applying a number to account for the time value of money.

Baptist Health doesn’t include any cost detail in the ROI calculations that is not verifiable.  Some application cost information is not available and therefore is not part of the overall ROI. As such, their ROI numbers are most assuredly understated. Understated as they are, and not factoring in ROI for risk mitigation or efficiencies gained throughout the organization, the Application Archiving Factory Program at Baptist Health achieves more hard dollar savings than it costs to run the program. As mentioned above, the program is self-funding – and then some. How many programs can boast they eliminate costs, reduce risk, and increase efficiencies for less than it costs to run the program?

The Business Case. It’s There.

If you’re a bean-counter the hard dollar savings of eliminating older applications is there.  If you’re IT Ops manager, the value of a centralized platform is obvious.
If you’re on the Security or Risk Management teams, doesn’t the elimination of vulnerable applications appeal to you?  Doesn’t knowing that data is protected and available through all compliance periods give you peace-of-mind?
If you’re a Clinical or Financial Consumer of this data, hasn’t this single pane of glass to the older data just made your job many times easier?
If you’re a C-Level resource and mindful of cost, and risk, and the people who work for you – see all the above.

Next time we talk we’ll dig into just how Baptist Health’s App Archiving & Retirement program sponsor and management teams put in place the foundation of our program’s success.

For More On How Baptist Health Achieved ROI Success

To learn more about our project and to get to know my client; Baptist Health. And, if you’re in need of healthcare, it’s my hope that you’re lucky enough to visit a place that cares as much about you as Baptist Health cares about the patients and communities they serve.  Read their full story here. Or watch the video. Learn more about Dell Technologies Application Archive and Retirement Services.

Read their full story here. Or watch the video.

If you have any comments or questions about this story, please comment below!

About the Author: Scott Malson

Scott Malson is Dell Technologies Senior Program Manager, working in Dell Technologies Application Portfolio Optimization discipline, leading an Application Archiving Program for a large Healthcare organization based in Louisville Kentucky. As a Sr. Program Manager with many years of experience overseeing transformational programs for some of Dell Technologies most strategic customers, Scott Malson has a proven track record of successfully planning, developing, and implementing state of the art technical solutions that solve real business problems. Prior to joining Dell Technologies, Scott was an IT leader in the Automobile Insurance industry. This is Scott’s first foray into the blogging world, taking this opportunity to share his thoughts and experiences on a customer and technology about which he is most passionate.