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4/5/2010
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Bob Evans
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Global CIO: St. Luke's CIO Saves Millions With Apptio's Help

Apptio's tools helped $2.5 billion St. Luke's Health System identify where its IT spending was exemplary, okay, or troublesome.

Confronting the daunting obstacle many of her peers are struggling to overcome, St. Luke's Health System CIO Debe Gash knew that the only way to extend IT's strategic value throughout the $2.5 billion organization was to first liberate some spending trapped inside internal operations.

With a lot of strategic planning driven by extensive communication with physicians and nurses and other front-line colleagues, plus some significant financial visibility gained through a spending-analytics tool from Apptio, Gash and her team have begun to strip out millions of dollars in non-essential costs and have started funneling some of those savings over to strategic initiatives such as electronic health records.

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"The desire to gain greater insight into our IT spend was not a main priority, but in the past couple of years it became a necessity based on some issues around the economy and the financial challenges we've had in healthcare over the last few years," said Gash, who oversees IT strategy and operations for St. Luke's 11 hospitals with 1,200 doctors and 9,000 employees overall.

"We realized we needed to figure out ways to maximize IT spend and shift investments over to our strategic initiatives, like electronic health records and new systems that meet our rising quality objectives," Gash said.

"And I've gotta say that we were finding it very difficult to identify ways to increase our strategic spend or shift dollars to our strategic initiatives. And we invested in Apptio to provide us with some analytics into where we were spending our tech dollars and then use that insight as a source to compare against industry benchmarks."

The results showed that while St. Luke's IT team was getting high marks for the service levels it was delivering, it was spending significantly more than comparable healthcare organizations. To make those comparisons, Gash said, her team used benchmarks from Forrester and Gartner as well as those offered by Apptio itself.

"So armed with that insight, we found ways to keep our service levels high but also go after that higher-than-normal spend: in infrastructure, storage, desktops, networks, operating environments, help desk, and various other components," Gash said. Among the accomplishments:

**St. Luke's discovered it had oversubscribed on desktop software licenses , so went back to the vendor with the new insight and details and renegotiated a new contract that cut $300,000.

**St. Luke's used to have two full-time IT people trying to cope with spam management, but Apptio analyses showed there was probably a better way. Gash said the team looked at various alternatives, picked a specialists, and as a result has been able to lower the load on network traffic because the spam junk gets filtered out before intruding. And just as significantly, Gash said, that solution allowed those two full-time IT pros to be moved from spam-hunters to involvement with strategic, forward-looking projects.

**With Apptio showing St. Luke's was spending well above its industry norm for storage, Gash's team hired an outside consultant who came in and quickly discovered the problem: all of the storage systems were geared to Tier 1 levels. "So he then advised us on what could be Tier 2 or Tier 3, and tape, and that let us lower our capital draw on storage significantly," Gash said. Significantly indeed:

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