The Growing Role of Artificial Intelligence in Ambulatory Health Care

 

Introduction

Yesterday, I wrote about the use of Robotic Process Automation (RPA) in health care. Today, I want to discuss the growing role of artificial intelligence in ambulatory health care.

Artificial Intelligence (AI) is reshaping nearly every aspect of modern health care, and ambulatory care settings such as outpatient clinics, physician offices, and same-day surgery centers are no exception. Ambulatory health care has traditionally relied on high patient volume, efficient workflows, and rapid decision-making. With AI emerging as a key enabler of smarter operations, organizations are finding new ways to enhance efficiency, improve diagnostic accuracy, and strengthen patient engagement outside of hospital walls.

What AI Means for Ambulatory Health Care

AI in ambulatory care involves the use of machine learning, natural language processing, and predictive analytics to automate tasks, assist in clinical decision-making, and deliver personalized patient experiences. Unlike inpatient settings, ambulatory care focuses on long-term, short-term and preventive services where time and data coordination are critical. AI systems can quickly analyze patient data, detect patterns, and offer actionable insights that help clinicians make faster and more informed decisions.

Key Use Cases of AI in Ambulatory Care

1. Predictive Scheduling and Resource Management

AI algorithms can analyze historical patient flow, appointment types, and seasonal trends to optimize scheduling and reduce no-show rates. Predictive analytics helps allocate staff and resources more effectively, improving both operational efficiency and patient satisfaction.

2. Clinical Decision Support

AI-powered systems can assist clinicians by analyzing patient data, lab results, and medical history to recommend potential diagnoses or treatment options. In an outpatient setting, this can speed up consultations and ensure early detection of chronic conditions such as diabetes, hypertension, or COPD.

3. Patient Engagement and Virtual Assistance

AI chatbots and voice assistants can manage routine communication such as appointment reminders, pre-visit screenings, and post-visit follow-ups. This frees up administrative staff while improving accessibility for patients who prefer digital interaction.

4. Documentation and Coding Automation

Natural language processing (NLP) tools can transcribe clinical notes, extract relevant information, and automatically assign billing codes. This reduces manual documentation, minimizes errors, and allows clinicians to spend more time with patients.

Ambient listening technology such as that provided by Nuance DAX Copilot and Abridge can listen in on a patient encounter and transcribe the pertinent information into the note section of the patient’s chart in the electronic health record (EHR) system, completing 80-85% of the encounter note for the provider to later review, edit and sign. This frees the provider up to have a more positive interaction with the patient without having to be buried in a laptop taking notes. It also makes the encounter more efficient, allowing the patient to be able to discuss more of their issues with the provider leading to better overall outcomes.

5. Predictive Analytics for Identifying At-Risk Patients

AI algorithms can be applied data stored in an EHR system using a risk-scoring model looking at such data as medical history, social determinants of health, lab results and trended vital stats, treatment plans, medications and urgent care or emergency department and/or inpatient admissions to identify patients who may be at risk of being admitted or readmitted to the hospital. Identifying these patients allows the provider to reach out and potentially intervene to prevent an admission or readmission which could make a huge difference in the health of the patient. Waiting until a condition worsens to the point where the patient has to be admitted to the hospital could have adverse effects on the future health of the patient. Not to mention the huge risk of potential hospital-borne infections, especially for those patients who are immune-compromised. Additionally, these avoiding these preventable admissions or readmissions free up health care dollars and resources that can applied elsewhere to further the health of the community.’

This is rather new use that is still developing and will continue to evolve as more and more data is used to train and refine the models and experts continue to calibrate them. This could also lead to breakthroughs in identifying new protocols and further developing and applying existing ones.

6. Population Health and Risk Stratification

AI can aggregate and analyze data across patient populations to identify those at higher risk of hospitalization or disease progression. Ambulatory clinics can use these insights to implement targeted preventive interventions and reduce avoidable admissions.

Protecting Patient Health Information (PHI) in an AI Environment

As AI systems handle sensitive health data, maintaining privacy and compliance with regulations such as HIPAA is essential. The use of AI in ambulatory care introduces specific security challenges, including the protection of EHRs and the safe handling of data used for model training.

To mitigate these risks, organizations should adopt the following safeguards:

 

1. Data De-Identification: Remove personally identifiable information before using data to train AI models.
   
   
2. Encryption and Access Controls: Encrypt all PHI at rest and in transit and use role-based access to limit data exposure.
   
   
3. Audit Trails and Monitoring: Maintain detailed logs of who accesses data and when to ensure accountability.
   
   
4. Vendor Due Diligence: Evaluate AI vendors for compliance with HIPAA, HITRUST, and other relevant standards.
   
   
5. Human Oversight: Keep clinicians and compliance officers involved to review AI recommendations and identify potential biases or anomalies.
   
   
6. Local Storage and Execution of Models: Wherever and whenever possible, store and run AI models locally. While this requires more compute resources and deeper knowledge to train the models, it ensures that PHI doesn’t leave the organization through the use of a shared model. As models become more specialized to particular tasks and industries, they are also becoming much smaller. Something the size of ChatGPT is not required to run the use cases that we just discussed as models like ChatGPT, Gemini, Claude, etc. are created to handle a wide-open array of questions and requests which require an enormous breadth of data, while the uses we just discussed only require specialized data, such as patient data, charges, etc. making them substantially smaller in size. In fact, some models have been demonstrated that can be run on just a laptop and accomplish amazing tasks! Some vendors may also train and deliver models for on-premises use that can be delivered and retrained at regular intervals.
   
   
7. Create an Organizational Policy Covering the Use of AI: Just as most organizations have policies covering security, having an AI policy that governs the use of AI in the organization is key. Additionally, these policies should be written in such a way that they can be evolved and updated as the technology and use of it grows.

Security and privacy must be treated as foundational elements of responsible AI use in health care.

The Future of AI in Ambulatory Health Care

The future of AI in ambulatory care is deeply connected to interoperability and precision medicine. As electronic health records, wearable devices, and remote monitoring systems continue to generate vast amounts of data, AI will play a central role in integrating this information and making it clinically useful.

In the coming years, we can expect advances in:

• Personalized treatment recommendations that adapt to individual patient profiles.
  
  
• AI-Driven Preventive Screening Tools that analyze biometric, genomic, and lifestyle data to identify early indicators of disease before symptoms appear.
  
  
• Automated Clinical Workflow Optimization that continuously monitors clinic operations, identifies process bottlenecks, and recommends real-time adjustments to improve throughput and efficiency.
  
  
• Emotion and Sentiment Analysis for Patient Interaction that enables AI to assess tone and engagement during patient communications, helping clinicians identify patients at risk of anxiety, depression, or disengagement from care.
  
  
• AI-driven triage systems that guide patients to the appropriate care setting before they arrive at a clinic.
  
  
• Synthetic Data for Research and Model Training that allows developers and researchers to create realistic, privacy-safe datasets for testing and innovation without exposing real patient information.
  
  

The most effective AI systems will act as augmented intelligence, enhancing rather than replacing human clinicians. When designed responsibly, AI can empower health care teams to deliver more efficient, data-driven, and compassionate care.

Conclusion

AI is transforming ambulatory health care by reducing administrative burdens and allowing clinicians to focus on what matters most: patient well-being. By combining automation with strong data governance and security practices, health care organizations can confidently adopt AI while maintaining patient trust and privacy. As technology continues to advance, AI will help make outpatient care faster, more accurate, and more human-centered.

Revolutionizing Health Care with Robotic Process Automation (RPA)

 

Introduction

The health care industry faces constant pressure to accomplish more with fewer resources. Hospitals and clinics must handle increasing patient volumes, growing data demands, and complex regulations, often with limited staff and budgets. To meet these challenges, many organizations are turning to Robotic Process Automation (RPA). RPA uses software “robots” to automate repetitive, rule-based tasks, allowing clinicians and administrative staff to focus more on patient care and less on paperwork.

What is RPA in Health Care?

RPA involves the use of software bots that mimic human actions to complete digital tasks across multiple systems and applications. These bots can log into systems, enter or extract data, and perform calculations without human intervention. In a hospital or clinic, this means that bots can process insurance claims, manage patient records, and schedule appointments, all while reducing manual effort and human error. The goal being to take low level processes that don’t require human judgement off of employees to free them up for much higher value work that does require human judgement and interaction. These higher value tasks could be patient care, system troubleshooting in IT, deeper data analysis and forecasting in Finance and Operations, etc.

Key Use Cases of RPA in Health Care

1. Patient Data Management

RPA can automatically collect, verify, and update patient information from various systems, ensuring that electronic health records (EHRs) remain accurate and current. This helps reduce data entry errors and administrative delays while freeing up clinicians to spend more time with patients.

2. Claims Processing and Billing

Insurance claims often involve complex, time-consuming processes that are prone to errors. RPA bots can check claims for accuracy, submit them to payers, and follow up on rejections. Automating these steps speeds up revenue cycles and minimizes costly mistakes.

3. Appointment Scheduling and Reminders

Managing appointments requires coordination between patients, staff, and multiple systems. RPA can simplify this by integrating scheduling tools, sending automated reminders, and rescheduling appointments when necessary. This improves efficiency and reduces missed appointments.

4. Regulatory Compliance and Reporting

Health care organizations must adhere to strict regulations such as HIPAA and CMS requirements. RPA can assist by tracking access to sensitive data, generating compliance reports, and maintaining detailed audit logs to ensure accountability.

5. Supply Chain and Inventory Management

Hospitals depend on a steady supply of medications, instruments, and protective equipment. RPA bots can monitor inventory levels, generate purchase orders, and alert staff when supplies are low. This prevents shortages and reduces waste.

Benefits of RPA in Health Care

• Improved Accuracy: Automation reduces manual data entry errors and inconsistencies.
• Increased Efficiency: Tasks that once took hours can be completed in minutes.
• Enhanced Patient Experience: Staff can dedicate more time to patient interaction and care.
• Scalability: RPA systems can handle larger workloads without additional staffing.
• Cost Reduction: Automating repetitive processes lowers labor and operational costs.

Challenges and Considerations

Although RPA provides many benefits, health care organizations must address certain challenges such as system compatibility, data security, and employee adoption. A successful implementation requires careful selection of processes for automation, strong collaboration between IT and clinical teams, and consistent performance monitoring to ensure the bots function properly.

The Future of RPA in Health Care

The next evolution of RPA combines automation with artificial intelligence (AI) and machine learning (ML), creating what is known as Intelligent Automation. These advanced systems can not only complete routine tasks but also make informed decisions, detect irregularities, and predict outcomes. For example, intelligent bots could prioritize urgent patient requests or assist clinicians in making diagnostic decisions. This integration of automation and intelligence promises a more proactive and adaptive health care environment.

Obviously, any introduction of AI into a health care context requires careful consideration of HIPAA privacy and security regulations and the protection of protected health information (PHI). As you evaluate Intelligent Automation solutions, protection of PHI has to be of paramount importance. In many cases, this may involve localized implementation of AI processes where large language models (LLM) are hosted and managed on-premises or in a cloud implementation controlled by the organization to ensure that PHI are not leaked out into broader implementations of the LLM that could lead to leakage outside the organization and a breach event. This is where organizational policies regarding the use and governance of AI are crucial.

Conclusion

RPA is transforming the health care industry by reducing administrative burdens and allowing staff to focus on what matters most: patient well-being. As automation technology continues to evolve, it will play an even greater role in improving safety, efficiency, and overall quality of care. For health care organizations ready to innovate, RPA represents a major step toward a smarter and more sustainable future.

The Importance of Our Community Health Centers

With National Health Center Week just wrapping up a couple of weeks ago (August 3-9, 2025), I think it is timely to highlight the work and obstacles that our community health centers across the country are facing, especially in light of increased regulation and decreased funding.

What Are Community Health Centers?

First off, for those of you who aren’t aware, Community Health Centers (CHCs) or Federally Qualified Health Centers (FQHCs) as they are also known are community-based health clinics that provide primary care and, in many cases, also provide other comprehensive services such as mental health, dental, pharmacy, and other key services designed to strengthen the health of the communities that they serve. These health centers are patient-governed with at least 51% of their board members being comprised of patients of the health center and the board composition matching the demographics of the community in which they operate. These FQHCs typically operate in underserved areas ensuring essential access to health care services for those who might have barriers to access elsewhere such as cost, no insurance, or language differences. FQHCs offer sliding fee schedules to accommodate those who don’t have insurance and might not be able to fully pay for their health care treatment. These health care centers provide a health care “safety net” for the populations that they serve ensuring that they always have access to essential health care services to improve the health of the communities they serve.

How Are FQHCs Funded?

Now that we all know what FQHCs are and the essential services that they provide, let’s talk a little bit about how they are funded. Like all health care providers, FQHCs have a mix of payors that fund or reimburse them for the services that they provide. These payors can include Medicaid programs, Medicare, federal grants, and to a lesser extent, commercial insurance payors. Additional sources of funding may also include private grants and donations. Federal grants for FQHCs are administered by the Health Resources and Services Administration (HRSA) which is part of the Department of Health and Human Services (HHS). These are competitive grants where potential grantees have to demonstrate need in their community and ability to serve that need. HRSA then looks at all grant applications and determines which communities have the most demonstrated need based on socioeconomic, demographic, and available health care resources to determine which areas qualify for the limited new grant funding available each year. Once a grant is awarded, a grantee has to continue to demonstrate performance through the annual submission of Uniform Data Systems (UDS) reports to HRSA which provide information on patient demographics, services, and outcomes which HRSA then uses to assess program performance and recommend quality improvement programs. Additionally, FQHCs are subject to intensive weeklong site visits either annually for newer or lesser performing FHQCs to every three years for more mature, higher performing grantees. 

To be clear, FQHCs probably have some of the most rigorous reporting and review requirements of any federal grantees and taxpayers can be assured that money spent on this program is not only put to the use that it was intended, but that those dollars are achieving measurable outcomes in the communities in which they are invested. The word "invested" in the last sentence is critical here as these programs aren’t entitlements as some politicians would like to frame them, but rather they are investments in the health of communities all around our country. Without healthy communities, we truly cannot have a healthy country, and these programs are quietly contributing to overall health and well-being of our country one community at a time.

Another service that many FQHCs provide is pharmacy services through a program administered by HRSA known as the 340B program. This program allows eligible entities such as FQHCs to access drugs from pharmaceutical manufacturers at deeply discounted rates. The FQHCs in turn use these savings to provide free or reduced-cost prescriptions to patients. In many cases, these pharmacies operated by FQHCs are the only pharmacy available in the community.

So, now that we have discussed what FQHCs are and their importance to the overall health and wellbeing of our communities, let’s talk about the challenges that FQHCs face. I am going to break these down into the following categories:

1. Funding
2. Workforce Shortages
3. Administrative Burdens and Regulation

Funding

We have talked a little bit about the sources of funding that FQHCs face. Unfortunately, most of those sources are under continuous political attack. The recently passed “One Big Beautiful Bill” is anticipated to result in the loss of Medicaid coverage for over 10 million people according to the Congressional Budget Office (CBO). Many of these recipients are currently patients of FQHCs and will probably remain patients in some respect even after they lose their Medicaid coverage. This means that in these cases, instead of receiving reimbursement from Medicaid for the essential services provided to these patients, these FQHCs will be providing care on a greatly reduced sliding fee scale which doesn’t even come close to covering the cost of those services. When an FQHC receives full Medicaid payment for a patient visit, that payment may only cover about 82% of the cost of providing the service. If that service has to be provided for only a nominal fee or even free under a sliding fee scale, that problem is greatly amplified. At the same time, grant funding is stagnate and has not kept up with inflation. Grant funding is what FQHCs depend on to bridge the gap between what they receive on fee-for-service basis to provide services and what those services actually cost. So, with inflation raising the cost of those services, fewer patients being eligible for Medicaid, and stagnate or even decreasing HRSA grant funding available to bridge the cost gap of those services, you can see how our system of FQHCs is becoming increasingly vulnerable to funding challenges. Without changes to how we prioritize and fund this valuable work, many of these essential health care centers providing safety net services are going to be forced close their doors in the coming years.

Workforce Shortages

While staffing and workforce shortages are rampant across our entire health care system, especially after COVID, the impact on FQHCs is even more dramatic. With limited funding, FQHCs struggle to compete with larger, private sector health care entities that can offer higher benefits and salaries. On top of that, many FQHCs are in rural areas which just adds to the difficulty in recruiting and retaining talent. Add to that the ever-increasing demand for FQHC services resulting in heavy workloads and high patient volumes and you have a recipe for staff burnout and dramatic staff turnover.

Administrative Burdens and Regulation

The administrative burdens and associated costs of running an FQHC are great. We already discussed the fact that FQHCs are under strict oversight by HRSA requiring submission of detailed UDS reports every year and intensive site visits, not to mention whatever regulatory burden that is imposed by state or local agencies. But in addition to that, FQHCs are increasingly being required to adopt frameworks around and address the complex needs of Social Determinants of Health (SDOH) which requires the FQHC not only to consider the patient’s physical health needs, but also things like housing or food insecurity which many traditional reimbursement models do not adequately address. SDOH requires complex coordination of services across various needs and specialties with ever shrinking resources.

Additionally, FQHCs are responsible for ensuring access to care for the populations that they serve. This means providing non-traditional care mechanisms such as telehealth services. Telehealth services require increased technology capacity and capabilities and, in some cases, even providing technology devices to their patients to ensure their ability to access services.

All health care entities are highly regulated under HIPAA which requires strict controls to protect the privacy of patient data. Compliance with these regulations require extensive and expensive compliance and cybersecurity programs. With all of the breaches of health care organizations that are occurring, the requirements under HIPAA are going to become even more extensive over the next year. These additional controls will just add to the expense and complexity of managing cybersecurity operations for FQHCs. Unfortunately, while acute (inpatient) organizations have access to funds from large technology companies like Microsoft and the federal government for cybersecurity, these funds are not made available to FQHCs. While inpatient health care is a key component of our health care system in this country, we need to keep in mind that the whole point of a healthy primary care system is to help keep our patients out of inpatient settings as much as possible. Many hospital admissions can be prevented by providing access to adequate primary care services, a fact that seems lost on our technology communities and government.

Conclusion

In this article, we have discussed what an FQHC is, how they are funded, and some of the challenges that they face to their continued survival. Through this article, I hope I have explained the urgent necessity behind our FQHC system and why they are vital to the continued health and well-being of our communities. The threats that our FQHCs currently face really threaten our entire health care system. When FQHCs are not available to provide services in their communities, that need will eventually need to be met, usually by emergency departments and urgent care centers. This additional load on our emergency departments and urgent care centers means that those services are less available to everyone else. FQHCs providing preventive and primary care services to these patients prevent that escalation in the need of care that results in emergency department or urgent care visits and relieves overall pressure on our entire health care system.

In future articles, I will address some of the challenges faced by FQHCs from my perspective as an executive responsible for the technology portfolio of an FQHC and integrated health system.

Recruitment Is a Form of Marketing!

 

During my discussions with a number of executives, many of whom I am mentoring in one way or another, the topic of how they have been treated by various organizations during the recruitment process has come up a lot. One of the biggest gripes that I hear over and over again is the lack of respect that they receive when they interview for a position and don’t receive an offer. Typically, when you make it to the step of getting an actual interview for an executive level position, you are one of only  a handful of candidates being considered. As such, one would expect that when they are not chosen, they would receive some form of personal communication regarding the decision and maybe, if the company is really on the ball, some feedback on what they liked and what they felt the candidate could have improved on. What I am hearing is that many times, all the candidate receives is the same basic form email that every other candidate receives that wasn’t even selected for an interview. “We regret to inform that we will not be moving forward with your candidacy…blah, blah, blah.” Sometimes, it is just automatically generated through Indeed or whatever platform that they posted the job on, which makes it even worse. Keep in mind, that we are only talking about the candidates that were interviewed which is typically a very small number and to whom it shouldn’t be difficult to provide personalized messaging.

What you need to understand as someone who is responsible for recruitment for your organization, especially at the executive level, is that how you treat your candidates can strongly impact how that candidate views your organization, positively or negatively.

Recruitment as Marketing

As executives, many of us have to make decisions on vendor relationships. That could be whether we want to start doing or continue to do business with a particular company. Now, think about this. You are an executive of Company A who once went through the recruitment and interview process with Company B and felt that it was impersonal and disrespectful. Company B now is lobbying heavily to do business with Company A and you are a major influencer of whether that happens. How likely are you to let that negative experience impact your decision to do business with Company B? I would say the probability of that is very high. Some might say that allowing personal experiences to impact a business decision is slightly unethical. I would argue against that by saying that your experience gave you insight into how Company B operates. If Company B is disrespectful to high-level job candidates and fails to show empathy and personal interaction for something as simple as communicating that they didn’t get the position, what makes you think that the treatment that you would get as a customer would be any better? When you are exposed to the recruitment process of an organization, you get a sneak peek into their culture. In a lot of ways, Human Resources is one of the main gatekeepers and advocates of the company’s culture. So, if your experience with HR during an advanced stage of recruitment for a high-level position is cold and impersonal, it wouldn’t be a stretch to say that approach probably permeates a lot of the culture of the company. Thus, this is where HR unwittingly becomes part of the marketing process. That negative impression that you leave with a candidate may be what prevents your company from making a sale. In some cases, depending on the organizations involved, that sale could be substantial. What HR did during that interaction completely overrode anything that the Sales and Marketing departments did to get the sale.

Going Beyond Recruitment

Now, in this blog post, I kind of picked on HR and how many HR departments are handling their recruitment processes (this is not completely anecdotal as I have experienced it myself in past job searches), however, we all need to realize that no matter our role, we are ambassadors of our organizations and not just our current organization. Many of us remember names. If we had a bad interaction with someone, we tend to remember that. That memory tends to stay with us regardless of which organization that person is currently with. Our interactions with each other matter and can build or destroy credibility. I know that these days, it is common for many to have a short-term outlook on things. Many people aren’t planning on being tied to any one organization for the long-term and don’t think that the impressions that they make during their tenure with their current organizations can have long-term impacts on them. What this short-term thinking totally misses is that most of us have long-term memories and those memories tend to follow specific people as well as organizations. So, the impression or impact you make today can have long-term ramifications. Always be aware of the impressions and perceptions that you leave. When you interact with others, you are a brand ambassador for not only your current organization, but any organization that you work for in the future.

Conclusion

HR has a lot more brand and marketing influence than I think many HR professionals realize. How often does HR’s impact on the organization’s brand perception enter the thoughts of CHROs and recruiters? I would love to hear feedback from HR professionals on this and not just the negative. If you are doing something really forward thinking and progressive to represent your organization as an HR professional, I would love to have you share that here.

Additionally, we need to realize that all of us, in our interactions with others, can impact the brand perception of our organizations – past, present, and future!

What is IT Governance and Why is it Important?

 

In my almost three decades in IT, what has truly amazed me is how few organizations actually have IT governance programs. What is even more amazing is how few C-suite leaders and other leaders even understand what IT governance is and the value that it can bring to their organizations. This group of leaders includes those within IT as well, many of whom see IT governance as a threat to their leadership. Let’s take a dive into what IT governance really is, why it is valuable and why IT leaders should actually embrace and not fear it.

What is IT Governance?

Simply put, IT governance is a framework that helps organizations manage and align their IT operations with their business goals and objectives. At the end of the day, isn’t meeting the organization’s goals and objectives what we should all be about? IT doesn’t exist in a vacuum. In order to make sure that IT is properly aligned with and working towards the organization’s goals and objectives, stakeholders outside of IT need to be involved in determining what that looks like from a strategy and performance management perspective. The goal of IT governance is to bring those outside stakeholders to the table.

Why is IT Governance Important?

So, now that we know what IT governance is, why is it so important? Bringing outside stakeholders to the table to help IT leadership create an aligned strategy ensures that the projects that IT takes on are the right projects to help the business progress. Furthermore, these stakeholders work with IT to help prioritize these projects and provide support and funding to ensure that they get done. One of the most common reasons for projects failing is unclear business objectives or poorly defined project goals and milestones. Including stakeholders in this process can help ensure that the business objectives, project goals, and milestones are clearly defined before the project is even approved and started. This increases the likelihood of project success and that the project will provide the organization value. IT governance is really a “shared responsibility” model where IT works with its key stakeholders to share the responsibility for the success of the IT department and ensure that its efforts are optimized and delivering value to the organization.

Why Should IT Leadership Embrace IT Governance?

In the traditional IT model, IT owns the total responsibility for the success or failure of its initiatives and projects and whether or not it delivers value (real or perceived) to the organization. In this model, IT leadership really becomes the scapegoat for failures related to lack of engagement and support from other business leaders. I don’t know about you, but to me, that just seems like a recipe for failure. And a lot of times, it is.

With a true IT governance model, on the other hand, responsibility for the success or failure of IT to deliver value to the business is a shared responsibility with stakeholders having input into the strategy and execution of the IT department. If done right, there really is very little reason that there should be failure as we will see in the next section when we talk about the mechanics of how IT governance works and how it delivers value.

How Does IT Governance Work?

We stated earlier that, in its most simple terms, IT governance is a framework that brings together IT leadership and leaders or stakeholders from across the organization to share the responsibility for the governance of IT. Let’s talk a little bit, in a very generic way, about ways in which this is typically achieved. Keep in mind that these are broad, high-level applications and the approach and the details required to make this work for a particular organization really depends on that organization’s needs and resources.

1. The Chief Information Officer (CIO) should be a part of the business strategy development process and should be in attendance at board of directors’ meetings. In order to ensure IT alignment with business goals and objectives, the leader of the IT department needs to be in the room when those are developed and discussed.

2.  An IT Steering Committee should be formed made up of stakeholders from across the organization. This committee makes recommendations on the IT strategy and ensures that it aligns with the overall business strategy before being passed up to the board of directors for approval. 

a.      This committee acts as a governance body for IT where key metrics and KPIs for evaluating the operational performance of IT are developed, approved, and presented.

b.     Prioritization of projects and initiatives for that the IT department works on should also generally occur in this committee.

c.      The agreed upon KPIs, metrics, and project portfolio performance should be captured in a balanced scorecard which can then be used to measure the overall effectiveness of the IT department in achieving its strategic objectives. Plans for corrective action, if necessary, can be discussed and developed in this committee and then progress against those corrective action plans can be monitored along with the balanced scorecard. 

      3.  The IT scorecard, as approved and validated by the IT Steering Committee, should then be presented to the board of directors along with summaries of any actions discussed and taken in the IT Steering Committee and project portfolio status.

Conclusion

As you can see, this model sets up an organization for the most effective use and deployment of its IT resources by ensuring that said use and deployment is always in alignment with the needs of the business as directed by the business leaders. This avoids the IT department making key decisions in a vacuum and increases transparency in the effectiveness of the operation of the IT department. This transparency increases credibility and sets the IT department up to be trusted technology advisors and a strategic asset for helping the organization scale and achieve its objectives.

What CEOs Often Get Wrong About Innovation

Innovation at its core is really just defined as a new idea that solves a problem. Let’s focus in on the last three words of that sentence “solves a problem.” To be innovative, one needs a problem to solve. We need to help our CEOs understand that as CIOs, we are here to solve problems. We aren’t typically creating a product, we are supporting the business and helping it grow by providing technological solutions that help the organization achieve its goals. That often comes in the form of solving problems that are holding it back or that are pain points for the business’s operations.

Unfortunately, these days, many CEOs feel that their CIOs aren’t innovative enough unless they come up with flashy solutions and throw around buzzwords like AI or digital transformation not really knowing what they mean or how they even apply to their business. I have been shocked lately as I have talked with several CEOs and discussed projects with them about how many of them seem disinterested in solutions that merely solve the problem. When discussing projects with them, they all perked up when I talked about using AI agents, generative AI solutions or AI scribes for healthcare when they were disinterested in discussing projects around payroll solutions or other system implementations or improvements. This mindset is very dangerous in that a good CIO is there to help the business solve problems by proposing the best solution, not the flashiest or the sexiest solution. When we think about project management, three main tenets come to mind: the project is to be delivered on time, on budget, and be technically adequate (within scope). When we are delivering a project, we don’t add features to give the final product more wow factor as that would typically either mean increasing the budget throw additional manhours or duration or both. The goal is to deliver something that is technically adequate to meet the needs of the business. The same should go for the technological problems that we solve as CIOs. Being innovative means solving the problem in the manner that best suits the organization, nothing more, nothing less.

Unfortunately, our CEOs are inundated with marketing hype trying to sell them flashy solutions to problems that don’t exist or at least are not the most feasible solution to an existing problem. Additionally, they are also exposed to things that other organizations are doing that may or may not be applicable to their organization. As CIOs, this is where we need to put on our educator hat and educate our CEOs on how and why we choose the solutions we do. Sometimes the best solution to a problem is really the simplest solution.

Given this introduction, let’s talk about several questions about innovation in IT.

What is the CIOs role in innovation?

As a CIO, our role is the use of technology with business goals. The investments that we recommend in technology should directly support the goals and objectives of the business and be aligned to strategic objectives stated in the strategic plan or be solutions to problems that are preventing the business from achieving one or more of its goals or objectives. Innovation comes into play in providing those solutions. As stated earlier, innovation is just a new idea that solves a problem. As CIOs, it is our job to facilitate those new ideas.

Does innovation always require a novel idea?

Unfortunately, I think there is a misperception that innovation always requires a novel idea. While a lot of innovation really does start with a novel idea, especially those that we hear and read about, innovation can happen on a daily basis without creating something “novel”. Just coming up with a new idea or solution to a problem that your organization hasn’t tried before is being innovative. That doesn’t require that the idea or solution be so entirely new or original that no one has ever done it, just that the application of it is new to your organization or new to that problem.

With all of the focus and emphasis on innovation these days, isn’t there a cost to trying to drive innovation?

Absolutely. Organizations that want to strive to be innovation-first organizations where their goal is continuously come up with innovations invest in research and development or experimentation time. That may look like entire departments devoted solely to innovation or organizations over staffing their IT departments to give their staff time to experiment and play with new technologies in the hopes of them coming up with innovative solutions. There are very real costs to doing this. Taking your average overworked, understaffed IT department and coming in with a mandate that it needs to become more innovative just doesn’t work. Now, that doesn’t mean that they can’t come up with innovative solutions (many that I have observed do, by the way). It just means that they aren’t going to be actively looking for new ways to be innovative because the organization hasn’t staffed them for that ability.

What are the pitfalls that a CEO can get into when trying to hire an “innovative” CIO?

This really comes down to knowing your business, budget and what you need and can sustain. If you work for a nonprofit healthcare organization, as I do, you probably aren’t going to want or need to hire an executive from one of the big tech firms, even if you could afford them, thinking that they are going to bring innovation to your organization. If you do, the following will probably happen. They will recommend solutions that you can’t afford and the process of constantly being told no and not getting to work on cutting-edge technology will drive them away and you will be stuck recruiting for a CIO yet again, which can be a very costly endeavor. You are much better off hiring someone who understands and gets your industry and can bring their experience and expertise to your problems. Just because they have developed AI solutions or worked on the latest self-driving vehicle technology doesn’t mean they aren’t innovative or can’t provide an innovative approach to problem solving at your organization.

Does innovation by the CIO always involve technology?

To this question, I would answer with a resounding “NO”. At the end of the day, what you should be looking at is the best solution, not the most cutting-edge solution, not the most technical solution, not the most complicated solution, but the best solution. Sometimes, the best solution may involve a process change and may not require any technology at all or the best solution may require a process change followed by a technological solution. This is where you should listen to your candidate’s problem-solving skills and judge those rather than judging whether they fit your vision of being innovative or not.

This blog post has been written from my experience in technology both as a technologist and a leader and in dealing with numerous CEOs. Given that my experience may not be the same as yours and as always, I welcome your comments and perspectives and always look forward to hearing the perspectives of others as an opportunity to potentially learn and grow.

 

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As the CIO for a nonprofit, community-based healthcare center, I interact with vendors a lot. Probably 25% or more of my week involves dealing with vendors on new project proposals, renewals, research, or getting support. With that experience, here are a couple of things that I would like you, all of the IT vendors out there who want a nonprofit’s business, to know about how to do business with a nonprofit and have more understanding of the people across the table from you.

1. Nonprofit organizations are way different from for-profit organizations. That should be obvious, but let me explain how this should play into how you interact with or understand a nonprofit organization:

a. Most nonprofit organizations, especially those of us relying on federal funding to serve vulnerable populations, have to fight for every dollar we get, therefore, it is imperative to make sure that we are good stewards of those dollars and get the most value for every dollar spent that we can.

b.  This means that we are going to ask more questions, move more slowly to make decisions, maybe consider more options, and certainly push on you for more information than maybe a for-profit customer might.

2. I am going to ask you for a nonprofit discount or special pricing every day, all day long. Your competitors offer this, and I will expect you to as well if you want to do business with me!

3. If you are a VAR representing multiple vendors, we are really going to lean on you to make sure that you are living up to the value-added component of our relationship. For the reasons stated above in item 1b, you might have to spend more time and effort to make a sale to us for a specific product or service. Please understand this before agreeing to enter into a relationship with us. We are going to bring you problems and look for you to help provide us with solutions.

a.  Just because we don’t buy today doesn't mean that we won’t in the future. You may present us with a great solution that we just can’t afford today, however, we will be continually working to find a way to swing that purchase in the future so your working on putting together solutions and proposals for us should be seen as an investment in future business even if you don’t immediately make a sale.

4. Due to lean staffing models, we are always in firefighting mode. Anything you can do to help us become more proactive is appreciated and will be reciprocated in the form of referrals to other colleagues. I personally speak to many of my colleagues in other nonprofit organizations and we frequently discuss our vendor experiences. I always highlight those vendors that I feel have gone above and beyond for us and make strong recommendations advocating for those vendors. Understand that the reverse is also true.

5. We generally want to establish a relationship and have trust in our vendors. We are going to be hesitant when we first start to do business with a new vendor, and it is incumbent on that vendor to build trust with us. While we are always price-sensitive, we also look to the value of the service offered. I don’t mind spending a little more money on a service if it helps me scale to the point where we can do more without adding more FTEs. I am always looking for that value beyond just the bottom-line cost. 

That being said, if you sell me on that value, you had better deliver or else any trust or goodwill will quickly evaporate and your opportunity to do business with us in the future will be greatly hampered.

In conclusion, the relationship between IT vendors and nonprofit organizations is built on understanding, trust, and mutual respect. Vendors who take the time to comprehend the unique challenges faced by nonprofits and offer tailored solutions, discounts, and unwavering support will find loyal and long-term partners. By recognizing the value in each interaction and seeing beyond immediate sales, IT vendors can foster strong, lasting relationships that benefit both parties and ultimately serve the greater good of the community.