The upside of an enterprise ‘as-a-Service’ approach for healthcare CFOs
Healthcare chief financial officers (CFOs) are actively evaluating how shifting to an ‘as-a-Service’ (aaS) approach of ‘access-over-ownership’ protects capital dollars, enables agility and supports strategic priorities while still being fiscally responsible.
New aaS business models with partners can enable CFOs to optimize working capital, predictably forecast spend and ensure financial investment decisions are tied to clinical key performance indicators (KPIs), as well as operational performance and business success. This enables greater throughput of the ‘flywheel of value creation’ and enables CFOs to play a more strategic, impactful role in achieving the metrics that matter most in their organization.
One key benefit is more financial flexibility. By changing typical capital expenditure (CapEx) costs to operating expenditure (OpEx) costs or hybrid (CapEx/OpEx) costs, CFOs can optimize working capital. This enables them to more easily adjust as their business demands shift, making managing profitability easier while enhancing clinical or operational performance.
With an ‘as-a-Service’ approach, CFOs no longer need to consider how they might finance a significant upfront cost of a clinical system as a capital expenditure. Instead, they have a predictable amount to pay each month as an operating expense, dependent on volumes. This increases cash on hand so CFOs can make more strategic decisions, like redirecting capital dollars to buy new equipment or build a new wing for more revenue generating opportunities for their health system.
Ultimately, when CFOs focus less on the financial negotiation (lowest price) and focus more on value creation (driving optimization and transformation) they see how a service approach is more financially prudent for technology systems rather than bearing the burden of ownership and responsibility themselves.
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