The challenge of funding cloud using ‘Monopoly money’

While NHS Digital’s latest guidance on cloud services is helpful, Darren McKenna says we need revenue funding instead of capital budgets to drive up cloud adoption.

Board games were out this Christmas in the McKenna household with Monopoly being a firm family favourite.  It took me back to my own childhood.

During long games I would look at the pile of Monopoly money in front of me and wonder: “Just think what I could buy if this was real money!”.  A Ferrari was usually top of my list, when I was winning of course!

When I was as going through the department budgets recently, it struck me that the capital budget is starting to feel like that Monopoly money from my childhood.  No, I don’t intend to abscond with a Ferrari… I mean it’s becoming harder to use it for real.

Few years ago I had to fight to get the capital budget increased.  A trust with digital ambitions needed capital to build a sound infrastructure, run modern equipment for end-users and most importantly, keep the infrastructure up to date.

You won’t win a clinician over to use an electronic patient record using a seven-year-old PC that takes  ages to boot up and network that falls over.  The fight was won and the budget was earned.  Actually, it was a relatively easy fight due to a supportive Board that understood the problem and had vision to see it as an investment rather than an overhead.

Cloud-first approach

Like many forward-thinking organisations, we have moved on and adopted a cloud-first approach. With increasing cyber threats, scarce technical resource, and the requirement for the NHS to be agile, flexible and cost effective, it’s a logical progression of the on-premise infrastructure.

This week new guidance has been published on the use of cloud by the NHS along with some useful supporting material.

And even though many trusts have been using cloud computing services safely and securely for a while, this will hopefully give reassurance to other organisations and the sections of information governance teams who sit in the “can’t do” camp.

It is interesting to see that this guidance has been written jointly by NHS Digital, NHS England, the Department of Health and Social Care and NHS Improvement.

The framework  is helpful and makes it clear that it is important  to assess risks and put place security and mitigations. Same as on-premise systems.

Monopoly money

However,  from my experience, the biggest challenge of cloud hasn’t been information governance; it hasn’t been security controls; it hasn’t been availability or any of the other challenges.  It is funding. To be precise, it is revenue funding.  When it comes to paying for cloud services, my hard-fought and hard-won capital money is like Monopoly money!

When you commit to the cloud, you are committing to a revenue payment.  There is no sweating the asset with the cloud. You can’t push that server replacement back another year to avoid spend.  In today’s environment that’s not a bad thing, but it comes at a cost, and a constant revenue cost at that.

The global digital exemplars (GDE) scheme is designed to develop blueprints for others to follow. Cloud technology is ideal for building infrastructure that can scale and be replicated rapidly.   However, a high proportion of the funding for GDEs and fast followers is capital.  It was the same with tech funds, it was all capital.

Driving up cloud adoption

If the NHS is really serious about driving up cloud adoption, it needs to think differently about how we fund technology. We need revenue streams instead of capital budgets. It is disappointing that funding is only briefly mentioned in the guidance and it doesn’t provide further guidance for finance staff.

I do hope this is only the start; and that further guidance will be published to help understand the funding challenges and make it easier to convert capital to revenue.

Despite current pressures, good organisations will unlock the capital and build the required business cases to make the transition to the cloud where appropriate, but this needs to be made easier for all.

The  Digital Health Cloud Summit this week in London provides a great opportunity to discuss the topic of funding.  As you wander past Marylebone station or Bond Street station on the way to the event, remember to raise the topic and find a way to fund cloud with Monopoly money!