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Cloud vs. data center—how to make the best decision

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It’s hard to get by without some kind of formal data management system. If an organization isn’t collecting and actively using data that’s been collected on patients and customers, it may not be able to reach them; and if it isn’t using data to optimize operations, it will be working at less-than-peak efficiency indefinitely.

However, data storage and management bring a new web of complexity to an organization. It can try to handle it all itself by investing in a data center and recruiting the right people to handle its management, or it can pay money to an outside firm to handle those responsibilities.

Each approach comes with its share of advantages and disadvantages, so HIT executives should make the decision that’s right for their organizations.

So which factors should be kept in mind when making this decision?

The ability to monitor and troubleshoot. Assume for a moment that an organization is managing data in-house. Is it able to devote the trained resources necessary to constantly monitor data transactions? If something goes wrong, such as a transaction that won’t complete or data that’s unexpectedly unavailable, would it be able to troubleshoot it? Third-party providers are able to monitor and troubleshoot a system on an organization’s behalf, so it doesn’t have to dedicate those resources from its staff.

The budget. An organization also needs to consider its total budget. It might seem like managed services from third-party data service providers are expensive, but compare that with the cost of building a data center—more than $200 per square foot. That also doesn’t consider the cost of ongoing management. Think about the budget carefully—if it has the money to build a data center, it may be worth it. Otherwise, a managed service is more affordable.

The projected growth trajectory. How fast is the organization likely to grow? If it builds a data solution that works for today, will it just become obsolete in another year as it picks up its pace of expansion? One advantage of third-party storage solutions is their ability to scale; if you anticipate future growth, or aren’t sure what to expect, they’re typically the better option.

The need for security. How secure does the data need to be? If an organization is storing some basic information about how the supply chain flows, security may not be a major concern. But it’s more likely that a healthcare organization is storing some patient data or other information that would be devastating if it fell into the wrong hands. With significant investment, an organization can secure its own data effectively, but chances are a specialist will be able to offer higher, more cost-efficient standards.

The desire for control. Some executives like having their own data centers because it gives them a sense of control—data is owned in a tangible, accessible way, and they don’t have to worry about whether a service provider’s lax standards are going to put information in jeopardy. Of course, that also means the organization will have increased accountability for its data, but for many provider systems, the tradeoff is worth it.

The organization’s unique needs. If there are any special needs, which aren’t likely covered by a third-party provider, don’t write them off. For example, an organization may need its data system to integrate with other specified systems, or it may need to make the data available in some specific way. Customizing a solution gives an organization more flexibility to tackle these unique qualifiers.

The willingness to staff up. How willing is an organization to bring on additional staff members who can build, manage and maintain a data center? Employees are a major cost, and they add complexity to an IT operation. For some organization, they’re a practical necessity well worth the investment, but for others, they’re a risk. Consider this—how is the organization going to tell who’s qualified to manage a data center?

If an organization finds itself conflicted over some of these issues, it is possible to take a hybrid approach. For example, an organization might build a small data center to house its most important data, such as patient data, while utilizing a third-party cloud platform for the remainder of its data needs. This is only optimal for a minority of organizations, but is an option worth considering.

For most modern organizations, working with a third-party specialist is the better choice—both financially and logistically. Weigh options carefully, and work with a partner that can be trusted.

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