IT Architecture Recommendations to Peachtree Healthcare
The discussions and cursory analyses in the Harvard Business Review case Too Far Ahead of the IT Curve? (Dalcher, 2005) attempt to implement massive IT projects without considering the implications from a strategic and tactical level. There is no mention of the most critical legal considerations of any healthcare provider, and this includes compliance to the Health Insurance Portability and Accountability Act of 1996 (HIPAA) in addition to highly specific requirements by medical practice area and discipline (Johnston, Warkentin, 2008).
Second, there isn't a framework described for governance of the IT strategies as they relate to Peachtree Healthcare's overarching strategic vision and mission. The lack of focus on governance in any strategic IT implementation will eventually lead to confused roles, cost overruns and chaos relating to the long-term contribution of IT to rapidly changing business priorities (Smaltz, Carpenter, Saltz, 2007). Max Berndt is right to be concerned about agility and flexibility; because if he had standardized healthcare processes and workflows with the company's existing systems, the results would be worse. Yet Service oriented Architectures (SOA) are not the answer to this challenge, there needs to be more thorough planning and evaluation of how IT can be made a strategic platform for growth.
Third, Peachtree is woefully deficient in the areas of analytics, key performance indicators (KPIs) and metrics of performance of their enterprise to the audit and performance level of each hospital, treatment center and teaching facility. It is essential for any healthcare enterprise to have a thorough methodology in place to capture HIPAA-based audit data in addition to continually monitoring the process workflow performance of its core business unit (Alhatmi, 2010). Only by having these metrics and KPIs in place can Peachtree hope to gain the full contribution of analytics and the insights available with the latest generation of enterprise applications in this rapidly changing area. Analytics is entirely separate from the decision of whether to implement a monolithic vs. SOA-based architecture. It could be argued that in healthcare enterprises, analytics are the compass that explains the direction of the enterprise, giving senior management visibility into how they can best navigate to their objectives (Smaltz, Carpenter, Saltz, 2007). Peachtree lacks a solid governance architecture though, so the analytics will end to be used to build one based on an assessment of just what areas of the existing IT infrastructure are failing. Without this level of insight, Peachtree's senior management team will continue to churn with very significant IT challenges. Analytics and audit data will show Peachtree that a large scale rip-and-replace strategies may actually harm them even more than help. Without even this layer in their IT architecture today they are in some ways like a car traveling down an interstate late at night without its lights on.
Fourth, the issue of change management is not discussed as a strategic once in the case study (Dalcher, 2005). There is ample evidence this is a critical issue, given the reactions of the physicians and staff at the Decatur hospital. As Max and Candace visit in the middle of a system melt-down. Yet this issue will be the single biggest source of costs and pain of changing from existing systems, even though they are clearly substandard and not doing the job. Max, Candace and the entire board of directors need to stop and think how the decision of using a monolithic vs. SOA-based approach to solving these major problems in their enterprise will be implemented, and how a change management program can be successfully implemented. The fact that physicians each have a very specific approach to how they like to work and expect IT systems to meld to their way of doing things, and not the other way around, Max and his team have a big job ahead of themselves on this issue (Smaltz, Carpenter, Saltz, 2007). The apparent lack of SOA early adopters in healthcare is a warning sign that the CIO doesn't seem to take too seriously, yet demanding user references is going to be critical to the success of any partnership with an enterprise vendor. SOA implementations also challenge every aspect of an organization, from its governance architecture (Smaltz, Carpenter, Saltz, 2007) to its change management strategies (Fickenscher, Bakerman, 2011) with the need for a consistency across a very complex series of processes. Peachtree's senior management has a perceptual blindness to these issues which are the core aspects of any strategic IT implementation.
Fifth and finally the budget figures in the case lack any credibility because the executive team hasn't defined the goals and objectives for this project in the context of a governance framework for Peachtree. There is no governance framework to determine relative levels of spending again, making the massive figures unbelievable. It is common knowledge that any enterprise project will be comprised of 10% of software costs, and 90% being change management-related costs including customizing the applications and systems to how employees work creation and testing of analytics and metrics, and piloting of the system itself (Fickenscher, Bakerman, 2011). None of this is included in the statement of work or in the case which further brings confusion tot the decision making process.
Of the four commentators, Professor John Kastor is the most realistic and accurate as to the true costs and time involved with changing the IT systems to make the staff more efficient. He rightly brings up the fact that change management will be incredibly expensive and time consuming and there is no easy path out of the mess that Peachtree is in during the case analysis (Glaser, 2007). George C. Halvorson, chairman and CEO of Kaiser Permanente is also very accurate in his assessment and the demands of real-time system availability, including fault redundancy. His assessment of the risks associated with monolithic vs. SOA architectures show he has faced comparable challenges before. He also indicates from his analysis that the bigger issue no one in the case is talking about is discovering which areas of Peachtree and most and least dysfunctional from an IT standpoint. It is ironic that the Peachtree management team doesn't opt for a diagnosis first, which is exactly what one would do when a patient is in need of treatment. Monte Ford and Randy Heffner clearly haven't faced this level of challenge in healthcare and show a strong base of expertise in large-scale enterprise system planning and SOA. Their contributions are more oriented towards how Peachtree can align their IT strategies to governance and strategic initiatives, yet they lack the in-depth healthcare expertise that Dr. Kastor and George C. Halvorson have and that is evident in their responses. The recommendations of these two members of the medical profession therefore are more relevant to the consolidated set of recommendations discussed in the next section.
Recommendations to Peachtree Healthcare
Taking into account the ideas and suggestions of the four experts at the end of the article or case, here are the series of recommendations for Peachtree healthcare. First, Peachtree needs to stop the activity on IT systems and redefine its governance structure, taking into account the strategic plan for the corporation, creating a specific strategic information plan for the enterprise company. The strategic information plan will ensure the governance framework aligns both toe long-term goals while also ensuring the IT systems plan aligns to existing and future business requirements (Smaltz, Carpenter, Saltz, 2007). This governance framework also needs to take into account the need for auditability of processes in the healthcare provider, to the HIPAA level of compliance at the national level (Alhatmi, 2010). Planning for this now will save the company literally millions of dollars in possible fines in the future. Right now, there is no governance framework and no strategic information systems plan. Both need to be in place before any kind of investment in IT is even considered.
Once these foundational elements of the company are defined, Peachtree needs to go through an evaluation of just why their IT systems today aren't working by department, location and division. This audit of IT systems effectiveness will save the company from doing a large-scale rip-and-replace of IT systems they can't afford and have no visibility if they are successful or not. The audit of the existing IT system will also be invaluable in seeing which factors are contributing or detracting from existing system adoption. Creating a baseline of user behavior in the context of adoption is critical for any change management strategy to succeed (Dalcher, 2005).
In conjunction with the audit of the existing system effectiveness, Peachtree needs to start thinking about which legacy systems thy have obtained through mergers and acquisitions of other companies can be discontinued. As is the case in many healthcare providers, there is often a multitude of systems in place that have minimal to no value to the existing workflows of the business (Smaltz, Carpenter, Saltz, 2007). This could be making the existing work processes actually less, not more, efficient.
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