Financing a transition to the cloud

October 11, 2012 – Transitioning to cloud services may be the next big technology move for your organization. What’s involved? How much does it cost? Is it worth it? We talked to some folks familiar with cloud computing for “Navigating the Cloud,” an e-supplement available on our websites in November. Here’s an excerpt from “Financing your transition to the cloud.”

What is the cloud and why does my healthcare organization need it?

Terry Rennaker, vice president, Skanska USA’s Mission Critical Center of Excellence, and Andrew Quirk, senior vice president, Skanska USA’s Healthcare Center of Excellence: Cloud is a term for computing that is done on multiple servers and possibly in multiple data centers on a flexible platform that can move the computing around as computing demand and capacity change. A cloud can be small and contained within a single data center and can serve a private use, or can be large, covering multiple data centers and serving multiple clients. … In both cases computing and storage capacity is purchased from the provider who then hosts the computing of the procuring company. This provides a flexible computing base to the customer providing computing and storage in a utility like model; use it when you need it and pay only for what you use.

This decouples the need for building your own facilities and buying servers to satisfy your computing needs.

This is important to healthcare organizations as an outlet for their computing needs, which are growing exponentially as a result of bring your own device (BYOD) pressure, electronic medical records, electronically interconnected medical equipment and many other demands on IT infrastructure. The cloud can provide a rapidly responsive computing capacity to ever-changing and escalating computing needs.

The challenge for healthcare organizations is to move to the cloud while maintaining all of the security and compartmentalization required by healthcare regulation and patient record security.

What are the costs associated with transitioning to the cloud, and are there “hidden” costs?

Tony Vitelli, director of managed services, Infor: There are costs necessary to facilitate the transition to the cloud, but they are quickly recoverable and can provide an attractive ROI. Depending upon the application, upfront costs may include a migration project and all that those entail (testing, data validation, etc). In many cases the application will not change with a migration to the cloud (no end user effect). Also, by timing these moves to previously planned hardware spend, we find that the initial investment needed can be significantly lower than continuing with the status quo.

By doing the proper amount of due diligence and planning, hidden costs can be greatly minimized or even eliminated. As mentioned previously, by timing your move to the cloud with previously planned activities, the cost of migration can usually be accomplished with existing budget. Even in cases where an existing contract may not have an out clause, changing business requirements may still allow for an attractive ROI. Regarding security, this is always a concern, with a proper amount of due diligence and proper architecture you can be comfortable that your data is safe.

Source: Healthcare Finance News