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Welcome to This Week Health. My name is Bill Russell. I'm a former CIO for a 16 hospital system and creator of This Week Health, where we are dedicated to transforming healthcare, one connection at a time.

Now, onto our interview

it's been an interesting conversation throughout this week for me. Those two topics are really top of mind. AppRat from the perspective of people are unsure about the budgets. We thought they were stabilizing and they're like no, I think I'm being asked to cut some more and reduce.

AppRat lends itself really well to that. What should people be looking at if they're thinking about application rationalization?

I think the biggest concern people have around application rationalization is the amount of time it typically takes in those projects, right? You're typically looking at a 12 to a 24 month effort.

And then from there, they can start making some decisions about, okay, now what do I want to pull back? Now what I want to start to rationalize.

I'm smiling because our app wrap project, when I did it started with, let's find all the apps, right? That took. At least six months. Exactly. It's not findable.

So you have a process that's going to come in, identify those apps, help us to identify the dependencies, the priorities, and and then essentially, the other challenge with it is, you can't just turn them off.

You've got to figure out whether or not they're going to be replaced.

whether or not you can implement something else right to replace them, whether you can consolidate. A lot of times it may just be that you over bought too many users in that one application. You don't have enough over in this place. You're out of license compliance, so you're running a financial risk there, right?

So our process looks at all of that to help you understand where your utilization those applications really is. And then we do actually look at the functionality with inside of those applications. So you may have, analogy over here that could benefit from, 95 percent of what they need from this other technology.

We have a lot of partners, vendors, whatever you want to call them, at this point, bundling things together.

And CIOs have been talking to me about this problem of overlap. Like they're paying for something over here, they're paying for something over here. They're actually using it over here, but they're not using it over here. Is there an approach to that? That's

an early

problem.

It is. But I think it goes back to those purchasing decisions. So application rationalization. Sure, it's what we're talking about here, right? Coming in and giving that initial deliverable. But it's creating that ongoing process so that over the next year or two years, as different departments are coming to you with needs, those departments are being put through a process to really help identify whether there's something in the application portfolio that already does that.

They may have found that there's actually another component of another apple over here that does that same thing, and they could have saved the whole purchase to begin.

found over the years that contract management, for whatever reason It's not a disciplined approach in a lot of I. T. Shops.

And so when you go in there and say, Hey, let's take a look at all the contracts and see what we have, that in and of itself ends up being quite the exercise. I think we've gotten better, but I remember the days where we were talking and people go, I don't know where the contracts are. Some are illegal, some over here.

That needs to be a, if you're trying to dial in the numbers, that needs to be a really solid discipline across the organization, doesn't it?

It is. And our application rationalization methodology follows three different phases. That first phase is the eight to ten weeks that I talk about. Then we go to a second phase where we help you plan out the decommissioning and the archiving and the consolidation.

Are they leaving money on the table because the vendors haven't lived up to the SLAs that they were supposed to, right? So there's a whole component of that happens in our third phase, where we really help the organization dig into those contracts, understand those SLAs, see where they're compliant or non compliant, and then we help them rationalize that as well.

And pretty shocking how much money you can actually find on the table.

Yeah, I want to get to AI readiness. When I'm talking to CIOs and they're saying I've been asked for this number. I'm going to do AppRat. I typically say to them, you will get a little bit in the first year.

You'll get a, it'll start to grow in the second and third year. Is that fairly accurate or, you shrink the process down significantly.

We do. So we actually do see returns earlier on than those older traditional processes. But also in that methodology when we deliver that first eight to ten weeks, we're gonna tell you where the one or two really hot applications are that can get you the highest savings.

AI readiness. I'm going to be more vague here, because I want you to set it up. Sure. What does that mean? it about helping my health system to understand the requirements of what I'm going to need to do for data? Is it governance around bringing AI applications in? Is it training my staff? I What is AI

readiness?

So in our opinion, AI readiness is really empowering the CIO with a deliverable. Again, same 8 to 10 week kind of process. All of our methodologies are focused on rapid return to value to these organizations, but it's giving that C. I. O. The ammunition they need to stand in front of their C. E. O. And stand in front of their board and tell them where the organization really is with concrete data rather than just walking in there and telling the organization.

That's what we really want to do is we want to help these CIOs. Give them the data that they need to prove to that C suite to prove to the board that they are not ready for AI for all these different reasons and to get the budget dollars allocated they need to then go in and put the processes in place to be ready.

All those things you mentioned are important. Governance, right? How are you going to establish governance? Where is that going to be? How does that differ if it's a clinical AI solution versus if it's a customer service, AI solution? Looking at the data. Is it the vendors data model? Is it, aggregated data that's coming from multiple health systems that's forming the basis of that AI model?

So what's the governance model that's going to ensure that the AI model is continuously being managed?

This AI conversation is really fascinating to me in that I say to my team now, and I have some in the past, this phrase of expectations are the mother of all disappointment. Yes. What is the expectation of what AI is going to be able to do in healthcare?

I think if you're at the board level, they're sitting there hearing all this buzz. They go, Oh my gosh, are we applying AI? They don't even know what they just said. Are we applying AI? Then you get to the administrative level and they obviously understand healthcare more. And so they're sitting there going, Hey, don't screw things up.

As

The hardest part about this conversation is you're right. Everybody's hearing the buzz, they're hearing their competitors down the street, implementing AI, or at least advertising that they're getting ready to implement it, right? Or at least they got the pressure. That's right, whether they're doing it or not.

And so that's giving them pressure to say, we have to do AI too. to, right? Even if just from a marketing perspective to say that we're keeping up with our peers down the street to stay competitive, we have to show that we're using a I. So I think that's where a lot of that angst and that pressure is coming from.

I don't think that at the board level especially, or even sometimes the CEO level, they know what they want the A. I. To do yet. That's part of why they need an A. I. Ready to strategy, right? Help them define that. But they do know that they want to do a I. And so that's where I think that angst is coming from is it's more just from a competitive market perspective of not wanting to be left behind.

Do you help to define the areas where it will have the least risk, most

There's hundreds of vendors here. As we all know, in this industry, we've all been around long enough. There's a lot of them that have a I splattered all over their booth that will not be here in three years, will not be here in four years, right? And those vendors, because again, it's hard to build a company, right?

It's hard to build something with new technology and roll it out. And so for an organization to immediately grab one of these newer, younger vendors, right? Not even know if they're going to survive, slam that solution in, and then find out later on that they're going to go out of business. So you're going to see new AI solutions continuously coming out.

So it's better for the organization to step back, plan, get ready, think about where they really want to deploy it, and then go out and look for the vendors that are going to help them actually deliver whatever, solution they're looking for. And we don't try to pick and choose. Where they should be.

Closing question. We're sitting here in front of a stage.

I don't know what stage that is. I don't know what the name of it is. I'm watching some CIOs up there. But what are you hearing at the conference? What is the topic of conversation right now?

We're hearing a lot of angst, candidly. You mentioned that when you first walk up, right?

We are hearing a lot of that same angst. This new administration has come in. There's lots of words around Medicare and Medicaid cuts being thrown around everywhere. And as we know, a lot of our facilities live and die on Medicare, right? That is their primary payer, especially in our rural communities.

Medicare and Medicaid are, their number one payer, right? And so there is a lot of concern around, what that is going to do to their budgets, and how that's going to allow them to spend. Even our vendor peers here are all concerned about what that's going to do to tightening budgets, and if that's going to stop spending, if that's going to have them slow down projects, right?

I think that's a lot of the concern in the market right now.

Uncertainty is never a good thing, is it? It is not

a good thing. Not a good thing.

Dave, thank you very much. Bill, always a

pleasure. Appreciate it. Thank

you.

Thanks