Information Technology confidence, spending up across various industries

Improvements and stability in business information technology confidence across a range of industries involving healthcare, will drive stronger IT spending growth this year, in accordance to a new study by International Data Corp.

Professional services firms, involving cloud service providers, will increase their information technology confidence spending by 6% in the year of 2017, while IT budgets in the financial services sector will rise by more than 5%, the IDC research predicts.

By the year of 2021, IT spending will reach $2.7 trillion, with the largest contributions coming from consumers, banks, manufacturers, and telecommunications providers.

Cloud service providers are anticipated to resume data center investment growth in the second half of 2017, after a brief slowdown, and this will drive server and storage spending by professional services firms to almost 9 percent growth this year.

Enterprise buyers are also poised for a server upgrade cycle this year, IDC claimed, driving positive growth in spending across vertical industries. Enterprise software spending remains strong, led by professional services (up 9%), followed by banking, securities and investment services, retail and healthcare (all up 8 percent).

Total annual software spending will surpass $600 billion by 2021, with the largest contributions coming from manufacturing, banking and professional services, the report stated.

"The banking industry indicates highly positive indicators for spending plans, with key projects focused on big data and analytics," said Jessica Goepfert, program director for customer insights and analysis at IDC. "Nearly all of the major banks around the world have highlighted that their [big data analytics] deployments are now a critical part of their competitive strategies. This is particularly the case on the retail banking side, as the banks establish their omnichannel strategies, seek to understand and respond to their customers' behavior, and build strategies for excellence in customer experience."

 

Providers, payers testing the digital transformation initiatives

Providers and payers are early in the procedure of commencing digital transformation initiatives, but an important percentage hope to invest in technologies in the coming months to alter the way they serve and interact with sufferers.

Just 10% of providers and payers say they are actively executing digital transformation initiatives, in accordance to a latest survey from IDC Health Insights, one of the lines of business of IDC, an international consultancy. Research appeared in a report termed as, “IDC Survey: Payer and Provider Investment Plans for Digital Transformation.”

In defining digital transformation initiatives, IDC Health Insights studied the ways in which healthcare agencies interact with customers and sufferers, including a wide-ranging approach to change that involves leadership, “omni-experience,” information technology, operating model and workforce transformation. The latest survey mentions digital transformation and infrastructure and operating model transformation concentrating on individuals, legacy systems, culture, partnerships, leadership, and incentive systems.

While just one in 10 providers and payer organizations are presently executing these wide-ranging projects, but by the year of 2018, IDC Health Insights data prove that 42% of providers and 58% of payers plan to have programs in place, claims Jeff Rivkin, an IDC research director.

Presently, most existing digital transformation initiatives are in a pilot testing or research phase. In both industry segments, digital transformation comprises about 30% of new information technology initiatives, data recommend.

Rivkin states that IDC Health Insights conducted the research to gauge provider and payer investment plans for digital transformation, which involves clinical collaboration and communication via mobile devices, connected health, digital transformation, Internet of Things (IoT) devices and a value-based healthcare approach.

About a third of healthcare provider agencies predict they hope to evaluate such programs over the next one to 3 years, with about one in four payers say they are presently evaluating such programs. Rivkin adds that information technology departments are likely to be leading the way in undertaking digital transformation projects, in contrast to other business units.

Technologies that are the focus of digital transformation involve big data, business analytics, cloud services, cyber security, and mobile devices and applications, the survey discovered.

Healthcare provider agencies are searching to digital transformation to drive increased productivity, decrease overall costs and increase revenue. Payers significantly seek digital transformation projects to embrace new distribution platforms, reduce organizational risk and meet compliance requirements.

Tech Move: More IT dollars flow to analytics, consumer attempts, protection

For years, EHRs (electronic health records) were the big-ticket contribution for hospitals and integrated delivery networks, as they raced to cash in on meaningful use incentives.

Now it seems the bulk of EHR contribution may have been made at the nation’s hospitals. IT dollars are now heading towards elsewhere, going to products that will assist contributors to cope with the pressures of accountable care, sufferer relationship management, and optimizing and securing their IT atmospheres.

Investment in IT is still increasing at various hospitals, but healthcare agencies now are looking at technologies that can assist them take benefit of the EHR infrastructure they have put in place in few years.

There is a perceptible move in IT investment away from EHRs and towards primary technology places, with the top drivers for budget progress being analytics, patient engagement, consumer relationship management and cybersecurity, in accordance to the results of a latest survey of over 200 hospital IT decision makers by IDC Health Insights.

CIOs and federal authorities agree with the findings of the IDC survey, recommending that hospitals are transitioning beyond meeting objectives of the federal Meaningful Use program, and saying the industry is stepping into a “post-EHR era.”

In the “post-Meaningful Use” period the agenda has been came back to sufferers, contributors, payers and developers, claims John Halamka, MD, CIO of Beth Israel Deaconess Medical Center in Boston. “The main concentration is the care management medical record—my term for consumer relationship management and patient engagement—mobile technologies, huge data analytics, and cloud,” he states.

The move in focus makes sense to Judy Hanover, research director for contributor IT strategies at IDC. “The focus of hospitals has moved from a laser focus on EHRs to actually being capable to look at the entire picture of their business and how to align their IT resources and make them ready for alternative payment models.”

The research firm’s survey discovered that 40% of U.S. acute care hospitals with more than 200 beds hope their IT budgets to increase. Some 50% of respondents hoped no spending increase in IT, and fewer than 10% stated that their IT budgets will fall.

But, it is where they are investing in IT that is evolving—merely 25% of respondents from agencies with increasing IT budgets say those increases will be designated for EHRs.

By contrast, the IDC survey observed major increases in other types of technology. Major data analytics spending was the most significant new spending driver overall, highlighted as an area for increased spending by 36.7% of respondents. Mid-sized hospitals (with 500 to 999 beds) were most likely to report analytics and major data spending contributions were driving budget increases (45.2 % of respondents).

Patient engagement planning and CRM platforms are clearly increasing in significance with 31.6% of organizations identifying the requirement to increase spending on these enterprise platforms. Information security is also a center for increased spending, highlighted by 29.1% of hospitals overall.

Engaging patients is growing as a priority for contributors, in accordance to Hanover, who says hospitals are putting more emphasis on sufferer portals, mobile health apps and electronic communication that drive that engagement. “If sufferers do not participate in their care, they know that the latest healthcare models will not work so well,” she summarizes.

Within analytics, hot places for investment involve contributor and care team performance analytics, as well as analytics that examine referral patterns and other economical analytics. “It is critical for value-based care to better comprehend cost structures, make healthcare more cost effective and comprehend the objectives for those changes,” Hanover claims.

Further, contributors are getting critical about what IDC calls the Third Platform, defined as technologies enabled by the cloud, involving mobile, social and big data analytics. Deployed on survey results, new spending by hospitals will be instructed toward optimizing IT departments, right staffing, and adding resources to acquire efficiencies and bring skills required for the Third Platform.

Those growth places stood in contrast with the move away from projected spending on records networks, one of the stunning changes in IT investment over the past couple of years, claimed Hanover of IDC.

“That number—25%—would have been 75% or 80% two or three years ago,” Hanover analyzes, noting that hospitals responding to the survey overwhelmingly reported confidence in their capability to manage meaningful use, but were less confident in their capability to adjust to accountable care reforms.

Major hospital systems are well on their way to completely executing the technology needed to meet meaningful use requirements, admits Michael McCoy, MD, who recently left his post as chief health information officer of the Office of the National Coordinator for Health IT. “Those who do have technology applied should, for the most part, merely require optimizing it at this point. Thus, predictably, the requirement for new systems or increased budgets is decreased,” explains McCoy.

For years, corporate IT in other verticals contributed 7%, 8%, or even 9% of their budgets in infrastructure, while hospitals were in the 1%  to 3% range. 

Nevertheless, in the case of Dallas-based Methodist Health System, CIO Pamela McNutt states that they are still contributing in EHRs and EHR optimization. Although, she agrees that analytics is a top driver, as is making better interoperability.

Contributors envision moving IT investment to enable them to meet the needs of new federal reimbursement program. And even with big investment increases in recent years, healthcare agencies still lag behind in investment in their IT infrastructure. “For years, corporate IT in other verticals contributed invested 7%, 8%, or even 9% of their budgets in infrastructure, while hospitals were in the 1% to 3% range,” McCoy claims.

Cybersecurity is also one of the growth places for contributor IT budgets, and the trend on security spending is pointing up, Hanover predicts. Approximately half of survey respondents demonstrated that security was one of the top priorities for their IT budget increase. When it comes to protecting information and networks, top priorities involve bolstering enterprise-wide security strategies, staffing up and focusing on cybersecurity in the cloud.

Halamka claims that security for Beth Israel Deaconess Medical Center has been an continual multi-year focus and that, “at a high level, we can state that there is move in the way we spend, shifting from capital-focused acquisition of hardware and software licenses to operating-focused services hosted in the cloud.”

Hospitals are becoming more comfortable with protection in the cloud, discusses Hanover. While 50%of software spending growth is still instructed toward on-premise installations, surveyed hospitals reported that 18% of their new software spend is going into software-as-a-service, and 24% is going into projects that leverage managed hosting by a 3^rd party.

“We are analyzing that the perceptions around security uncertainties and the cloud are becoming manageable,” she adds. “As a result, hospitals are initiating to take the cloud critically and are making investments.”