IT Innovators: Gaining Clarity through Cloud

The American Society of Health-System Pharmacists (ASHP) is a leader in the pharmacy sector, providing advocacy, career services, continuing education, meetings/conferences, publishing products, and residency training accreditation. For Gregory Smith, ASHP’s CIO and vice president of Information Technology and Operations, the cloud has enabled his staff to identify what their competencies should be, and to develop those core competencies by delegating other things to the cloud.

“I empowered my team to think differently about what we do and what our core competencies should be,” said Smith, who oversees all technology, software development and integration for new products, e-commerce platforms and operational support, including customer service to members. “Initially, we were doing too much across the spectrum and, as a result, had to try to become experts in too many technologies. We’ve pushed non-core competencies out to vendors where it’s their core competency and shrunk our core to focus and increase expertise.”

Smith said ASHP uses a variety of cloud-based systems and services, including Software as a Service (SaaS) platforms for email, contract management, e-invoicing, expenses, travel, and file sharing/collaboration. “We’ve deployed four applications to the cloud via SaaS in the last twelve months. Our e-learning platform is another wildly successful cloud deployment.” He added that the company is integrating a single sign-on solution across internal and external offerings to simplify access for staff.

According to Smith, it’s that staff that has been instrumental in driving cloud adoption at the company. “Today’s technology users are savvy—they know about the cloud in general terms and that it’s easy to procure SaaS,” said Smith. “The relative autonomy that the cloud offers to end users, as well as the efforts ASHP has made to offload processes and services that are complex, but not necessarily core to the company’s business, has enabled IT pros to refocus their efforts on other activities that can help drive the business and add additional operating efficiencies.”

ASHP is also realizing new efficiencies and focus through a defined annual business plan that includes a governance model for oversight. “We have 12 KPIs that we track on a monthly basis for performance, with each indicator having a green, yellow and red threshold range,” said Smith. “Our expectations are high, and we’re performing quite well across our plan.”

Smith said the company is essentially running a hybrid cloud environment, but that he is constantly assessing what is and isn’t running in the cloud—and when it makes sense to change things up; a technique that any IT professional working in the cloud can utilize.

“We have some applications in a private cloud,” he said. “We’re contemplating bringing them back in-house as the model we’re using is essentially IaaS. We still manage the application and operating system. Comparing costs with today’s server and SAN infrastructure, we can run it more cost effectively inside. Doing so will also allow us to centrally focus on replicating mission-critical applications to a cloud [disaster recovery] vendor.”

Smith said he is also evaluating whether business intelligence should be hosted in the cloud or on-premise. “The tools that have come into the market recently are amazing, and giving traditional client-installed applications and vendors a run for their money,” he said. “And the pricing model is easier—an operating lease versus a capital expense and depreciation model.”

As a CIO, author and professor (Georgetown University, graduate program), Smith keeps up with technology trends and how to apply them to make business run better. This is another unique way in which Smith and other IT professionals can get the most out of the cloud.

“It’s very important to note that the cloud is not always the cheapest option. IaaS environments where we’re still managing the applications don’t always result in the right return on investment and total cost of ownership, says Smith. “We conduct a rigorous analysis before leaping towards a cloud model type.”

“Going full bore to the cloud will have a dramatic impact on the IT operating budget. It will go up,” says Smith. “It’s not as big an issue for non-profit and educational organizations as it is for the for-profit world, especially large organizations. Moving from a capital intensive IT model where you own the licenses and hardware to essentially a leased model will result in two things: 1) IT operating dollars will rise as a result of all investments to the cloud being expensed versus depreciated over multiple years, and 2) those increased IT expenses will offset revenue and potentially decrease net income and EPS.”

“Some organizations treasure operating dollars at budget time and dole them out sparingly. In those settings, cloud may not be the best option, as the CIO will have to fight tooth and nail to get the funding. But for those who can look at the bigger picture and see the benefits, they’ll benefit by having applications and systems deployed faster, which can move the needle on revenue and sales. You just need to spend a lot of time with the CFO and fully understand the impact of your cloud model on the bottom line.”

Deb Donston-Miller has worked as a tech journalist and editor since 1990. If you have a story you would like profiled, contact her at [email protected].

The IT Innovators series of articles is underwritten by Microsoft, and is editorially independent.