IT Alignment and Strategic planning

1. IT Alignment and Strategic planning Lecture 9

2. Goal of Alignment and Strategic Planning • The goal of IT alignment and strategic planning is to ensure a strong and clear relationship between IT investment decisions and the health care organization’s overall strategies, goals, and objectives. • For example, an organization’s decision to invest in a new claims settlement system should be the clear result of a goal of improving the effectiveness of its claims processing process. • An organization’s decision to implement a computerized provider order entry system should reflect an organizational strategy of improving patient care.

3. Objectives of Alignment and Strategic Planning • Ensure that IT plans and activities are well linked to the plans and activities of the organization. • Ensure that the alignment is comprehensive. In other words: • Each aspect of strategy has been addressed from an IT perspective, recognizing that not all aspects have an IT component and not all IT components will be funded. • The non-IT organizational initiatives have been addressed, such as any process reengineering needed to ensure maximum leverage of the IT initiative.

4. Cont. Objectives of Alignment and Strategic Planning • Develop a tactical plan that details approved project descriptions, timetables, budgets, staffing plans, and plan risk factors. • Create a communication tool that can inform the organization of the IT initiatives that will be undertaken and those that will not. • Establish a political process that helps to ensure that the IT plan has sufficient organizational support.

5. IT Support of Organizational Goals (Example)

6. Challenges and Approaches to IT

7. 1. Overview of Strategy

8. Formulation • Involves making decisions about the mission and goals of the organization and the activities and initiatives it will undertake to achieve that mission and those goals. Implementation • Involves making decisions about how the organization structures itself, acquires skills, establishes capabilities, and alters processes in order to achieve the goals and carry out the activities defined during formulation.

9. 2. Areas Requiring IT Strategy • First, an IT strategy is important in the development of the application agenda, an inventory of desired applications or major improvements to existing applications.

10. Areas Requiring IT Strategy • Second, the IT strategy shapes initiatives designed to improve the IT asset. An organization’s IT applications, infrastructure, data, staff and department, and governance make up its IT asset. • Initiatives can be designed to add major capabilities to this asset—the ability to access the organization’s applications around the globe. • Or initiatives might aim to enhance characteristics of the asset to make the IT organization more agile.

11. 3. IT Strategy Vectors • Vectors: means the perspectives and approaches through which an organization chooses to determine its IT investment decisions.

12. 4. The IT Assets and Governing Concepts • IT asset is composed of those IT resources that the organization has or can obtain and that are applied to further the goals, plans, and initiatives of the organization.

13. IT Assets • Applications are the systems that users interact with: for example, scheduling, billing, and electronic medical record systems.

14. IT Assets • Infrastructure needs may arise from the strategic-planning process. Architecture strategies will focus on the addition or enhancement of broad infrastructure capabilities and characteristics.

15. IT Assets • DataStrategies surrounding data may center on the degree of data standardization across the organization, accountability for data quality and stewardship, and determination of database management and analyses technologies. • Strategies surrounding data focus on acquiring new types of data, defining the meaning of data, determining the organizational function responsible for maintaining that meaning, integrating existing sets of data, and obtaining technologies used to manage, analyze, and report data.

16. IT Asset • IT Staff are the analysts, programmers, and computer operators who, day in and day out, manage and advance information systems in an organization. • IT staff strategies focus on the acquisition of new skills, the organization of the IT staff, the sourcing of the IT staff, and the characteristics of the IT department

17. IT Asset • IT Governance is the organizational mechanisms by which IT priorities are set, IT policies and procedures are developed, and IT management responsibility distributed.

18. Governing Concepts • Certain technology, applications, and IT management techniques have the potential to make a significant impact on the health care industry and its organizations and on the way those organizations implement and apply information systems. • Examples today include Web 2.0, service-oriented architectures (SOA), knowledge management, and electronic medical record systems.

19. Web 2.0 • A powerful means for communities of patients to learn from each other but not something that the hospital can influence • Something that teenagers and people who are bored do • A mechanism that the hospital can use to leverage its support of patients with chronic diseases • A way to keep track of what people are saying about an organization

20. A Normative Approach to IT Strategies • There is no right way to develop an IT strategy and to ensure alignment. • Across health care organizations the approaches taken to developing, documenting, and managing an IT strategy are quite varied. • Some organizations have well-developed, formal approaches that rely on the deliberations of multiple committees and leadership retreats. • Other organizations have remarkably informal processes—a small number of medical staff and administrative leaders meet, in informal conversations, to define the organization’s IT strategy. • In some cases the strategy is developed during a specific time in the year, often preceding the development of the annual budget.

21. 1. Strategy Discussion Linkage • Organizational strategy is generally discussed in senior leadership meetings. • These meetings may be focused specifically on strategy or strategy may be a regular agenda item. • Example:a committee of clinical leadership might be asked to develop recommendations for improving patient safety. • Regardless of their form, the organization’s CIO should be present at such meetings or kept informed of the discussion and its conclusions.

22. 2. New Technology Review • The CIO should be asked to discuss, as part of the strategy discussion or in a periodic presentation in senior leadership forums, new technologies and their possible contributions to the organization’s goals and plans. • For example, a multidisciplinary task force could be formed to examine the role of wireless technology in nursing care, materials management, and service provision to referring physicians.

23. 3. Synthesis • The CIO should be asked to synthesize, or summarize, the conclusions of these discussions. • Synthesis will be needed during the development of the annual budget. And it will be a necessary component of the documentation and presentation of the organization’s strategic plan.

24. References • “Health Care Information Systems: A Practical Approach for Health Care Management”By Karen A. Wager, Frances W. Lee, John P. Glaser • “Information Systems and Healthcare Enterprises”By Roy Rada

25. IT Strategy and Alignment Challenges

26. Persistent Problems with Alignment • Business strategies are often not clear or are volatile. • IT opportunities are poorly understood. • Often the value of IT, particularly in terms of infrastructure, is difficult to quantify, and the value proposition is fuzzy and uncertain.

27. Limitations of Alignment • Although alignment is important it will not guarantee effective application of IT. • Planning methodologies and effective use of vectors cannot overcome weaknesses in poor relationships between IT staff and the rest of the organization, inadequate technical infrastructure that can significantly diminish the likelihood that IT investments will lead to improved organizational performance.

28. Alignment at Maturity

29. IT Strategy is Not Always Necessary • There are many times in IT activities when the goal, or the core approach to achieving the goal, is not particularly strategic, and strategy formulation and implementation are not needed. • Replacing an inpatient pharmacy system, enhancing help desk support, and upgrading the network, do not always require leadership to engage in conversations about organizational goals or to take a strategic look at organizational capabilities and skills.

30. IT as a Competitive Advantage • Competitive strategy involves identifying goals in ways that are materially superior to the ways that a competitor has defined them (formulation). • It also involves developing ways to achieve those goals and capabilities that are materially superior to the methods and capabilities of a competitor (implementation). • Competitive strategy should attempt to define superiority that can be sustained.

31. End of Lecture 9