Strategic Plan

Chapter12ITAlignmentandStrategicPlanning.pdf

Home >Information Systems homework help >Strategic Plan

Chapter 12 IT Alignment and Strategic Planning

Information technology (IT) investments serve to advance organizational performance. These investments should enable the organization to reduce costs, improve service, enhance the quality of care, and, in general, achieve its strategic objectives. 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 adjudication 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 care coordination application should be a consequence of its population health management strategy.

Developing a sound alignment can be very important for one simple reason—if you define the IT agenda incorrectly or even partially correctly, you run the risk that significant organizational resources will be misdirected; the resources will not be put to furthering strategically important areas. This risk has nothing to do with how well you execute the IT direction you choose. Being on time, on budget, and on specification is of little value to the organization if it is doing the wrong thing!

IT Planning Objectives The IT strategic planning process has several objectives:

To ensure that information technology plans and activities align with the plans and activities of the organization; in other words, the IT needs of each aspect of organizational strategy are clear, and the portfolio of IT plans and activities can be mapped to organizational strategies and operational needs To ensure that the alignment is comprehensive; in other words, each aspect of strategy has been addressed from an IT perspective that recognizes not all aspects of strategy have an IT component, and not all components will be funded To identify non-IT organizational initiatives needed to ensure maximum leverage of the IT initiative (for example, process reengineering) To ensure that the organization has not missed a strategic IT opportunity, such as those that might result from new technologies To develop a tactical plan that details approved project descriptions, timetables, budgets, staffing plans, and plan risk factors To create a communication tool that can inform the organization of the IT initiatives that will and will not be undertaken To establish a political process that helps ensure the plan results have sufficient organizational support At the end of the alignment and strategic-planning process, an organization should have an outline that at a high level resembles Table 12.1. With this outline, leadership can see the IT investments needed to advance each of the organization's strategies. For example, the goal of improving the quality of patient care may lead the organization to invest in databases to

measure and report quality, predictive algorithms to identify patients at risk of readmission, and the EHR.

Table 12.1 IT initiatives linked to organizational goals

Goal IT Initiatives Research and education Research patient data registry Genetics and genomics platform Grants management Patient care: quality improvement Quality measurement databases Order entry Electronic health record Patient care: sharing data across the system Enterprise master person index Clinical data repository Common infrastructure Patient care: non-acute services Nursing documentation Transition of care Financial stability Revenue system enhancements Payroll-personnel system Cost accounting

In many ways the content of Table 12.1 is deceiving. It presents a tidy, orderly linkage between the IT agenda and the strategies of the organization. One might assume this linkage is established through a linear, rational, and straightforward series of steps. But the process of arriving at a series of connections similar to those in Table 12.1 is complex, iterative, and at times driven by politics and instincts.

The development of well-aligned IT strategies has been notoriously difficult for many years, and there appears to be no reason such an alignment will become significantly easier over time.

Overview of Strategy Strategy is the determination of the basic long-term goals and objectives of an organization, the adoption of the course of action, and the allocation of resources necessary to carry out those actions (Chandler, 1962). Strategy seeks to answer questions such as, where does this organization need to go, and how will it get there? Where should the organization focus its management attention and expenditures?

The development of an organization's strategy has two major components: formulation and implementation (Henderson & Venkatraman, 1993).

Formulation Formulation involves making decisions about the mission and goals of the organization and the activities and initiatives it will undertake to achieve them. Formulation could involve determining the following:

Our mission is to provide high-quality medical care. We have a goal of reducing the cost of care while at least preserving the quality of that care. One of our greatest leverage points lies in reducing inappropriate and unnecessary care. To achieve this goal, we will emphasize reducing the number of inappropriate radiology procedures. We will carry out initiatives that enable us to intervene at the time of procedure ordering if we need to suggest a more cost-effective modality. We can imagine other goals directed toward achieving this mission. For each goal, we can envision multiple leverage points, and for each leverage point, we may see multiple initiatives. The result is an inverted tree that cascades from our mission to a series of initiatives.

Formulation involves understanding competing ideas and choosing between them. In our example, we could have arrived at a different set of goals and initiatives.

We could have decided to improve quality with less emphasis on care costs. We could have decided to focus on reducing the cost per procedure. We could have decided to produce retrospective reports of radiology use by provider and used this feedback to lead to ordering behavior change rather than intervening at the time of ordering.

In IT, we also have a need for formulation. In keeping with an IT mission to use the technology to support improvement of the quality of care, we may have a goal to integrate our clinical application systems. To achieve this goal, we may decide to follow any of the following initiatives:

Provide a common way to access all systems (single sign-on). Interface existing heterogeneous systems. Require that all applications use a common database. Implement a common suite of clinical applications from one vendor.

Implementation Implementation involves making decisions about how we structure ourselves, acquire skills, establish organizational capabilities, and alter organizational processes to achieve the goals and carry out the activities we have defined during formulation of our strategy. For example, if we have decided to reduce care costs by reducing inappropriate procedure use, we may need to implement one or more of the following:

An organizational unit of providers with health services research training to analyze care practices and identify deficiencies A steering committee of clinical leadership to guide these efforts and provide political support A provider order entry system to provide real-time feedback on order appropriateness Data warehouse technologies to support analyses of utilization Using our clinical applications integration example, we may come to one of the following determinations:

We need to acquire interface engine technology, adopt HL7 standards, and form an information systems department that manages the technology and interfaces applications. We need to engage external consulting assistance for the selection of a clinical application suite and hire a group to implement the suite. The implementation component of strategy development is not the development of project plans and budgets. Rather, it is the identification of the capabilities, capacities, and competencies the organization will need if it is to carry out the results of the formulation component of strategy. Vectors for Arriving at IT Strategy The IT strategy is developed using some combination of four IT strategy vectors:

Organizational strategies Continuous improvement of core processes and information management Examination of the role of new information technologies Assessment of strategic trajectories By a vector we mean the choice of perspectives and approaches through which an organization determines its IT investment decisions. For example, the first vector (derived from organization strategies) involves answering a question such as, “Given our strategy of improving patient safety, what IT applications will we need?” However, the third vector (determined by examining the role of new information technologies) involves answering a question such as, “There is a great deal of discussion about cloud-based applications. Does this approach to delivering applications provide us with ways to be more effective at addressing some of our organization challenges?” Figure 12.1 illustrates the convergence of these four vectors into a series of iterative leadership discussions and debates. These debates lead to an IT agenda.

IT Strategies Derived from Organizational Strategies The first vector involves deriving the IT agenda directly from the organization's goals and plans. For example, an organization may decide it intends to become the low-cost provider of care. It may decide to achieve this goal through implementation of disease management programs, the reengineering of inpatient care, and the reduction of unit costs for certain tests and procedures it believes are inordinately expensive.

The IT strategy development then centers on answering questions such as, “How do we apply IT to support disease management?” The answers might involve web-based publication of disease management protocols for use by providers, business intelligence technology to assess the conformance of care practice to the protocols, provider documentation systems based on disease guidelines, and CPOE systems that employ the disease guidelines to influence ordering decisions. An organization may choose all or some of these responses and develop various sequences of implementation. Nonetheless, it has developed an answer to the question of how to apply IT in support of disease management.

Most of the time the linkage between organizational strategy and IT strategy involves developing the IT ramifications of organizational initiatives, such as adding or changing services and products, growing market share, improving service, streamlining processes, or reducing costs.

At times, however, an organization may decide it needs to change or add to its core characteristics or culture. The organization may decide it needs its staff members to be more care-quality or service-delivery or bottom-line oriented. It may decide it needs to decentralize or recentralize decision making. It may decide to improve its ability to manage knowledge, or it may not. These characteristics (and there are many others) can point to initiatives for IT. In cases in which characteristics are to be changed, IT strategies must be developed to answer questions such as, “What is our basic IT approach to supporting a decentralized decision-making structure?” The organization might answer this question by permitting decentralized choices of applications as long as those applications meet certain standards. (For example, they may run on a common infrastructure or support common data standards.) It might answer the question of how IT supports an emphasis on knowledge management by developing an intranet service that provides access to preferred treatment guidelines.

IT Strategies to Continuously Improve Core Processes and Information Management All organizations have a small number of core processes and information management tasks that are essential for the effective and efficient functioningof the organization. For a hospital these processes might include ensuring patient access to care, ordering tests and procedures, and managing the revenue cycle. For a restaurant these processes might include menu design, food preparation, and dining room service. For a health plan, information management needs might point to a requirement to understand the costs of care or the degree to which care practices vary by physician.

Using the vector of continuous improvement of core processes and information management to determine IT strategies involves defining the organization's core processes and information management needs. The organization measures the performance of core processes and uses the resulting data to develop plans to improve its performance. The organization defines core information needs, identifies the gap between the current status and its needs, and develops plans to close those gaps. These plans will often point to an IT agenda. This vector may be a result of a strategy discussion, although this is not always the case. An organization may make ongoing efforts to improve processes regardless of the specifics of its strategic plan. For example, every year it may establish initiatives designed to reduce costs or improve services. The organization has decided that, regardless of a specific strategy, it will not thrive if core processes and information management are something other than excellent.

Table 12.2 illustrates a process orientation. It provides an organization with data on the magnitude of some problems that plague the delivery of outpatient care. These problems afflict the processes of referral, results management, and test ordering. The organization may decide to make IT investments in an effort to reduce or eliminate these problems. For example, strengthening the decision support for e-prescribing could reduce the prevalence of adverse drug events (ADEs). Abnormal test results could be highlighted in the EHR to help ensure patient follow-up. For every: There appear to be: 1,000 patients coming in for outpatient care 14 patients with life-threatening or serious ADEs

1,000 outpatients who are taking a prescription drug 90 patients who seek medical attention because of drug complications 1,000 prescriptions written 40 prescriptions with medical errors 1,000 women with a marginally abnormal mammogram 360 who will not receive appropriate follow-up care 1,000 referrals 250 referring physicians who have not received follow-up information four weeks later 1,000 patients who qualified for secondary prevention of high cholesterol 380 will not have an LDL-C on record within three years

When this vector is used, the IT agenda is driven at least in part by a relentless year-in, year-out focus on improving core processes and information management needs.

IT Strategies That Rely on New IT Capabilities The third vector involves considering how new IT capabilities may enable a new IT agenda or significantly alter the current agenda. For example, telemedicine capabilities may enable the organization to consider a strategy of extending the reach of its specialists across its catchment area to improve its population health efforts. Data-mining algorithm advances might enable an organization to assess different treatment approaches to determine which approaches lead to the best outcomes.

In this vector, the organization examines new applications and new base technologies and tries to answer the question, “Does this application or technology enable us to advance our strategies or improve our core processes in new ways?” For example, advances in sensors and mobile applications might lead the organization to think of new approaches to providing feedback to the chronically ill patient. Holding new technologies up to the spotlight of organizational interest can lead to decisions to invest in a new technology. An extreme form of this mechanism occurs when a new technology or application suggests that fundamental strategies (or even the organization's existence) may be called into question or may need to undergo significant transformation. In general these strategies lead to a decision to adopt a new business model. A business model is the combination of an organization's decisions about what it will do, how it will do it, and why “the what and how” are of such value that customers will pay them.

For example, Uber's business model is that it will get you from point A to point B (the what) but it will do so in a way that involves “renting” capacity from drivers already on the road and making the process of ordering a ride and paying for a ride very easy (the how). The what for Uber is no different than that for a traditional taxi company but the how is very different. Uber's superior business model was made possible by new information technologies—the web, mobile devices, and advanced analytics.

Perspective Internet of Things

The Internet of Things is a class of information technology that has several components; things (people, buildings, equipment, etc.); sensors attached to the things (sensors that measure heat, acidity, movement, etc.); processors that read and interpret sensor data; and a network (the Internet usually) that connects sensors and processors to cloud-based (usually) analytics.

There are several potential uses of the Internet of Things in health care:

Monitor equipment utilization and performance; for example, is a part in the MRI about to fail? Supply management; for example, where is a supply in its transit to the hospital? Monitoring of environmental data; for example, what is the humidity outside? Monitoring the physiological status of a patient; for example, is the patient's blood sugar level too low? Process orchestration; for example, is the orderly who needs to take the patient to radiology on her way? In an IT strategy discussion, these questions could be raised:

What is the Internet of Things? What are the possible uses and are those uses mature? Does the Internet of Things help us advance strategies or suggest new strategies? If so, what do we do?

IT Strategies Based on Assessment of Strategic Trajectories Organization and IT strategies invariably have a fixed time horizon and fixed scope. These strategies might cover a period of time two to three years into the future. They outline a bounded set of initiatives to be undertaken in that time period. Assessment of strategic trajectories asks the questions, What do we think we will be doing after that time horizon and scope? Do we think we will be doing very different kinds of things, or will we be carrying out initiatives similar to the ones we are pursuing now?

For example, we might be planning to implement a broad portfolio of health care information technology. The organization believes that through medical advances and preventive care the number of patients older than one hundred will increase dramatically. The strategic trajectory discussion asks, “Does this increase in longevity have significant implications for the types of health care that we deliver and hence on the types of information technology that we implement?”

Or we might be in the process of using IT to support joint clinical programs with other hospitals in the area. These efforts would be greatly helped by the availability of broad interoperability. However, such pervasive interoperability has proved elusive and may be elusive for a decade. How would pervasive interoperability affect our IT strategy?

The strategic trajectory discussion can be highly speculative. It might be so forward looking and speculative that the organization decides not to act today on its discussion. Yet it can also point to initiatives to be undertaken within the next year to better understand this possible future and to

prepare the organization's information systems for it. For example, if we believe our information systems will eventually need to store large amounts of genetic information, it would be worth understanding whether the new population health systems we will be selecting soon will be capable of storing and analyzing these data. The IT Assest The discussion of vectors and alignment up to this point has focused generally on the development of an application agenda as the outcome. In other words, the completion of the IT strategy discussion is an inventory of systems, such as the EHR system, customer relationship management system, and an enterprise data warehouse, that are needed to further overall organizational strategies. However, the application inventory is a component of the larger idea of the IT asset. These areas are discussed in the following sections.

The 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. The IT strategy discussion identifies specific changes or enhancements to the composition of the asset—for example, the implementation of a new application—and general properties of the asset that must exist—for example, high reliability of the infrastructure. The IT asset has four components: applications, infrastructure, data, and IT staff members.

Applications Applications are the systems that users interact with: for example, scheduling, billing, and EHR systems. In addition to developing an inventory of applications, the organization may need to develop strategies regarding properties of the overall portfolio of applications.

For example, if the organization is an integrated delivery system, decisions will need to be made about the degree to which applications should be the same across the organization. E-mail systems ought to be the same, but is there a strategic reason to have the same pharmacy system across all hospitals? Should an organization buy or build its applications? Building applications is risky and often requires skills that most health care organizations do not possess. However, internally developed applications can be less expensive and can be tailored to an organization's needs. Strategic thinking may center on the form and rigor of the justification process for new applications. Formal return on investment analyses may be emphasized so that all application decisions will emphasize cost reduction or revenue gain. Or the organization may decide to have a decision process that takes a more holistic approach to acquisition decisions, so that factors such as improving quality of care must also be considered.

In general, strategy discussions surrounding the application asset as a whole focus on, in addition to the application inventory, a few key areas:

Sourcing. What are the sources for our applications? And what criteria determine the source to be used for an application? Should we get all applications from the same vendor or will we use a small number of approved vendors?

Application uniformity. For large organizations with many subsidiaries or locations, to what degree should our applications be the same at all locations? If some have to be the same but some can be different, how do we decide where we allow autonomy? This discussion often involves a trade-off between local autonomy and the central desire for efficiency and consistency. Application acquisition. What processes and steps should we use when we acquire applications? Should we subject all acquisitions to rigorous analyses? Should we use a request for proposal for all application acquisitions? This discussion is generally an assessment of the extent to which the IT acquisition process should follow the degree of rigor applied to non-IT acquisitions (of diagnostic equipment, for example).

Infrastructure Infrastructure needs may arise from the strategic-planning process. An organization desiring to extend its IT systems to community physicians will need to ensure that it can deliver low-cost and secure network connections. Organizations placing significant emphasis on clinical information systems must ensure very high reliability of their infrastructure; computerized provider order entry systems cannot go down.

In addition to initiatives designed to add specific components to the infrastructure—for example, new software to monitor network utilization—architecture strategies will focus on the addition or enhancement of broad infrastructure capabilities and characteristics.

Capabilities are defined by completing this sentence: “We want our applications to be able to …” Organizations might complete that sentence with phrases such as “be accessed from home,” “have logic that guides clinical decision making,” or “share a pool of consistently defined data.”

Characteristics refer to broad properties of the infrastructure, such as reliability, security, agility, supportability, integratability, and potency. An organization may be heading into the implementation of mission-critical systems and hence must ensure very high degrees of reliability in its applications and infrastructure. The organization may be concerned about the threats posed by ransomware and denial of service attacks and decide to strengthen the security of its infrastructure. The asset plans in these cases involve discussions and analyses that are intended to answer the question, What steps do we need to take to significantly improve the reliability of our systems or improve security?

Data Data and information were discussed in Chapter Two. Strategies concerning data may center on the degree of data standardization across the organization, accountability for data quality and stewardship, data sources, and determination of database management and analyses technologies.

Data strategy conversations may originate with questions such as, We need to better understand the costs of our care. How do we improve the linkage between our clinical data and

our financial data? Or, we have to develop a much quicker response to outbreaks of epidemics. How do we link into the city's emergency rooms and quickly get data on chief complaints?

In general, 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.

IT Staff Members IT staff members are the analysts, programmers, and computer operators who, day in and day out, manage and advance information systems in an organization. IT staff members were discussed in Chapter Eight. IT strategy discussions may highlight the need to add IT staff members with specific skills, such as mobile application developers and population health implementation staff members. Organizations may decide that they need to explore outsourcing the IT function in an effort to improve IT performance or obtain difficult-to-find skills. The service orientation of the IT group may need to be improved.

In general, the IT staff member 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—is it, for example, innovative, service oriented, and efficient?

A Normative Approach to Developing Alignment and IT Strategy You may now be asking yourself, how do I bring all of this together? In other words, is there a suggested approach an organization can take to develop its IT strategy that takes into account these various vectors? And by the way, what does an IT strategic plan look like?

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 members 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 development of the annual budget. In other organizations, IT strategic planning goes on all the time and permeates a wide range of formal and informal discussions.

There is no single right way to develop an IT strategy and to ensure alignment. However, the process of developing IT strategy should be similar in approach and nature to the process used for overall strategic planning. If the organization's core approach to strategy development is informal, its approach to IT strategy development should also be informal.

Recognizing this variability, a normative approach to the development of IT strategy can be described.

Strategy Discussion Linkage

Organizational strategy is generally discussed in senior leadership meetings. These meetings may focus specifically on strategy, or strategy may be a regular agenda item. These meetings may be supplemented with retreats centered on strategy development and with task forces and committees that are asked to develop recommendations for specific aspects of the strategy. (For example, a committee of clinical leadership members might be asked to develop recommendations for improving patient safety.) These discussions will examine the organization's external environment—such as changes in reimbursement and competitive position—and internal environment—such as operational efficiency, financial health, and clinical strengths. This examination invariably results in the identification of gaps between the organization's desired position and role and its current status. This examination usually includes a review of the status and capabilities of the organization's IT capabilities and application portfolio.

Regardless of their form, the organization's CIO should be present at such meetings or kept informed of the discussion and its conclusions. If task forces and committees supplement strategy development, an IT manager should be asked to be a member. The CIO (or the IT member of a task force) should be expected to develop an assessment of the IT ramifications of strategic options and to identify areas where IT can enable new approaches to carrying out the strategy.

The CIO will not be the only member of the leadership team who will perform this role. Chief financial officers (CFOs), for example, will frequently identify the IT ramifications of plans to improve the revenue cycle. However, the CIO should be held accountable for ensuring the linkage does occur.

As strategy discussions proceed, the CIO must be able to summarize and critique the IT agenda that should be put in place to carry out the various aspects of the strategy. Exhibit 12.1 displays an IT agenda that might emerge. Exhibit 12.2 displays a health plan IT agenda that could result from a strategy designed to improve patient access to health information and self-service administrative tasks for a health plan.

Exhibit 12.1 IT Initiatives Necessary to Support a Strategic Goal for a Provider Article I. Strategic Goal

Improve service to outpatients

Article II. Problem

Patients have to call many locations to schedule a series of appointments and services. The quality of the response at these locations is highly variable. Locations inconsistently capture necessary registration and insurance information. Some locations are over capacity, whereas others are underutilized. Article III. IT Solution

Common scheduling system for all locations A call center for “one-stop” access to all outpatient services Development of master schedules for common service groups such as preoperative testing Integration of scheduling system with electronic data interchange connection to payers for eligibility determination, referral authorization, and copay information Patient support material, such as maps and instructions, to be mailed to patients

Exhibit 12.2 IT Initiatives Necessary to Support a Strategic Goal for a Health Plan Article IV. Strategic Goal

Improve service to subscribers Reduce costs Article V. Problem

Subscribers have difficulty finding high-quality health information. The costs of performing routine administrative transactions such as change of address and responding to benefits questions is increasing. Subscriber perceptions of the quality of service in performing these transactions is low. Article VI. IT Solution

A plan portal that provides: Health content from high-quality sources Access to chronic disease services and discussion groups Subscriber ability to use self-service to perform routine administrative transactions Subscriber access to benefit information Functions that enable subscribers to ask questions Plan ratings of provider quality A plan-sponsored provider portal that enables: Subscribers to conduct routine transactions with their provider, such as requesting an appointment or renewing a prescription Electronic visits for certain conditions such as back pain Subscribers to ask care questions of their provider

IT Liaisons All major departments and functions (for example, finance, nursing, and medical staff administration) should have a senior IT staff person who serves as the function's point of contact. Because these functions examine ways to address their needs (for example, lower their costs and improve their services), the IT staff person can work with them to identify IT activities necessary to carry out their endeavors. This identification often emerges with recommendations to implement new applications that advance the performance of a function, such as a medication administration record application to improve the nursing workflow. Exhibit 12.3 provides an example of output from a nursing leadership discussion on improving patient safety through the use of a nursing documentation system.

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 goals and plans of the organization. These presentations may lead to suggestions that the organization form a task force to closely examine a new technology. For example, a multidisciplinary task force could be formed to examine the ability of telehealth to support the organization's strategies. Table 12.3 provides an overview of different types of telehealth and an overall assessment of strategic importance.

Table 12.3 Assessment of telehealth strategic opportunities

Type of Telehealth Potential Strategic Value Level of Support of Organization's Strategy Semi-urgent care Enables patients to reach a clinician at any time to get advice on addressing low acuity health issues, for example, a modest fever of a child Moderate Remote patient monitoring Supports efforts to manage patient's with a chronic disease High Fitness monitoring Provides information on a patient's exercise program Low Visit substitution Supports conducting visits, for example, surgery follow-up through video rather than requiring a face-to-face visit High Clinician consultation Enables clinicians to seek a consult from a remote specialist High Critical care Provides ability to perform remote stroke assessments and ICU monitoring Moderate

Exhibit 12.3 System Support of Nursing Documentation Section 6.1. Problem Statement Both the admitting physician(s) and nurse document medication history in their admission note. Points of failure have been noted: Incompleteness due to time or recall constraints, lack of knowledge, or lack of clear documentation requirements Incorrectness due to errors in memory, transcription between documents, and illegibility Multiple inconsistent records due to failure to resolve conflicting accounts by different caregivers Most of the clinical information required to support appropriate clinician decision making is obtained during the history-taking process. Section 6.2. Technology Interventions and Goals A core set of clinical data should be made available to the clinician at the point of decision making: Demographics Principle diagnoses and other medical conditions Drug allergies Current and previous relevant medications Laboratory and radiology reports Required information should be gathered only once: Multidisciplinary system of structured, templated documentation

Clinical decision support rules, associated to specific disciplines, should guide gathering Workflow should support the mobile care giver with integrated wireless access to clinical information Needed applications could be implemented in phases: Nursing admission assessment Multidisciplinary admission assessment Planning and progress Nursing discharge plan Multidisciplinary discharge plan

Synthesis of Discussions The CIO should be asked to synthesize or summarize the conclusions of these discussions. This synthesis will invariably be needed during development of the annual budget. And the synthesis will be a necessary component of the documentation and presentation of the organization's strategic plan. Table 12.4 presents an example of such a synthesis.

Table 12.4 Summary of IT strategic planning

Strategic Challenge IT Agenda Capacity and growth management Emergency department tracking Inpatient electronic bed board Ambulatory clinic patient tracking Quality and safety Inpatient order entry Anticoagulation therapy unit Online discharge summaries Medication administration record Performance improvement Registration system overhaul Anatomic pathology Pharmacy Order communication Transfusion and donor services Budget management and external reviews Disaster recovery Joint Commission preparation Privacy policy review The organization should expect the process of synthesis will require debate and discussion; for example, trade-offs will need to be reviewed, priorities set, and the organization's willingness to implement embryonic technologies determined. This synthesis and prioritization process can occur during the course of leadership meetings, through the work of a committee charged to develop an initial set of recommendations, and during discussions internal to the IT management team.

An example of an approach to prioritizing recommendations is to give each member of the committee $100 to be distributed across the recommendations. The amount a member gives to each recommendation reflects his or her sense of its importance. For example, a member could give one recommendation $90 and another $10 or give five recommendations $20 each. In the former case, the committee member believes that only two recommendations are important and that the first recommendation is nine times more important than the second. In the latter case, the member believes that five recommendations are of equal importance. The distributed dollars are summed across the members, with a ranking of recommendations emerging.

The leadership should not feel compelled to accept the ranking as a definitive output. Rather, the process of scoring will reveal that members of the leadership team will rate recommendations differently. For example, some members will rate a project as having a high contribution to patient quality and others will view that contribution as low. The discussion that investigates these discrepancies can help the team understand the recommendation more fully and lead to a consensus that strengthens political support for the recommendation. Moreover, if the leadership team decides to approve a recommendation with a low score, it should ask itself why it views the recommendation as more important than the score would suggest.

For an example of the scoring of proposed IT initiatives, see Figure 12.2. It lists categories of organizational goals (for example, enhance patient care), along with goals within the categories. The leadership of the organization, through a series of meetings and presentations, has scored the contribution of the IT initiative to the strategic goals of the organization. The contribution to each goal may be critical (must do), high, moderate, or none. These scores are based on data but nonetheless are fundamentally judgment calls. The scoring and prioritization will result in a set of initiatives deemed to be the most important. The IT staff members will then construct preliminary budgets, staff needs, and timelines for these projects.

Figure 12.3 provides an overview of the timeline for these initiatives and the cost of each. Management will discuss various timeline scenarios, consider project interdependence, and ensure that the IT department and the organization are not overwhelmed by too many initiatives to complete all at once. The organization will use the budget estimates to determine how much IT it can afford. Often there is not enough money to pay for all the desired IT initiatives, and some initiatives with high and moderate scores will be deferred or eliminated as projects. The final plan, including timelines and budgets, will become the basis for assessing progress throughout the year.

Overall, a core role of the organization's CIO is to work with the rest of the leadership team to develop the process that leads to alignment and strategic linkage.

Once all is said and done, the alignment process should produce these results:

An inventory of the IT initiatives that will be undertaken (These initiatives may include new applications and projects designed to improve the IT asset.)

A diagram or chart that illustrates the linkage between the initiatives and the organization's strategy and goals An overview of the timeline and the major interdependencies between initiatives A high-level analysis of the budget needed to carry out these initiatives An assessment of any material risks to carrying out the IT agenda and a review of the strategies needed to reduce those risks It is important to recognize the amount and level of discussion, compromise, and negotiation that go into the strategic alignment process. Producing these results without going through the preceding thoughtful process will be of little real benefit. IT Strategy and Alignment Challenges Creating IT strategy and alignment is a complicated and critical organizational process. The following sections present a series of observations about that process.

Planning Methodologies Formal processes and methodologies that help organizations develop IT plans, whether based on derived linkage or the examination of more fundamental characteristics of organizations, can be very helpful. If well executed, they can do all of the following:

Lead to the identification of a portfolio of IT applications and initiatives that are well linked to the organization's strategy. Identify alternatives and approaches that might not have been understood without the process. Contribute to a more thorough analysis of the major aspects of the plan. Enhance and ensure necessary leadership participation and support. Help the organization be more decisive. Ensure the allocation of resources among competing alternatives is rational and politically defensible. Enhance communication of the developed plan. In addition to formal IT strategic planning methodologies, organizations will often use strategy frameworks that help them frame issues and opportunities. For example, Porter's Competitive Forces Model (Porter, 1980) identifies strategic options such as competing on cost, differentiating based on quality, and attempting to raise barriers to the entry of other competitors. By using this model, the organization will make choices about its overall competitive position.

Models such as these help the leadership engage in a broader and more conceptual approach to strategy development.

Persistence of the Alignment Problem Despite the apparent simplicity of the normative process we have described and the many examinations of the topic by academics and consultants, achieving IT alignment has been a top concern of senior organizational leadership for several decades. For example, a survey of CIOs from across multiple industries found improving IT alignment with business objectives to be the number one IT top management priority in 2007 (Alter, 2007). A survey of CIOs in 2015 (Information Management, 2016) found alignment to be, once again, the top concern. There are several reasons for the persistent difficulty of achieving alignment (Bensaou & Earl, 1998):

Business strategies are often not clear or are volatile. IT opportunities are poorly understood and new technologies emerge constantly. The organization is unable to resolve the different priorities of different parts of the organization. Weill and Broadbent (1998) note that effective IT alignment requires organizational leadership to clearly understand and strategically and tactically integrate (1) the organization's strategic context (its strategies and market position), (2) the organization's environment, (3) the IT strategy, and (4) the IT portfolio (for example, the current applications, technologies, and staff skills). Understanding and integrating these four continuously evolving and complex areas is exceptionally difficult.

At least two more reasons can be added to this listing of factors that make alignment difficult. First, the organization may find it has not achieved the gains apparently achieved by others it has heard or read about, nor have the vendors' promises of the technologies materialized. Second, the value of IT, particularly infrastructure, is often difficult to quantify, and the value proposition is fuzzy and uncertain; for example, what is the value of improved security of applications?

In both these cases the organization is unsure whether the IT investment will lead to the desired strategic gain or value. This is not strictly an alignment problem. However, alignment does assume the organization believes it has a reasonable ability to achieve desired IT gains.

The Limitations of Alignment Although alignment is important, it will not guarantee effective application of IT. Planning methodologies and effective use of vectors cannot, by themselves, overcome weaknesses in other factors that can significantly diminish the likelihood that IT investments will lead to improved organization performance. These weaknesses include poor relationships between IT staff members and the rest of the organization, incompetent leadership, weak financial conditions, and ill-conceived IT governance mechanisms. IT strategy also cannot overcome unclear overall strategies and cannot necessarily compensate for material competitive weaknesses.

If one has mediocre painting skills, a class on painting technique will make one a better painter but will not turn one into Picasso. Similarly, superb alignment techniques will not turn an organization limited in its ability to implement IT effectively into one brilliant at IT use. Perhaps this reason, more than any other, is why the alignment issue persists as a top-ranked IT issue. Organizations are searching for IT excellence in the wrong place; it cannot be delivered purely by alignment prowess.

Alignment at Maturity Organizations that have a history of IT excellence appear to evolve to a state in which their alignment process has become deeply intertwined with the normal management strategy and operations discussions. A study by Earl (1993) of organizations in the United Kingdom with a history of IT excellence found that their IT planning processes had several characteristics.

IT Planning Was Not a Separate Process IT planning and the strategic discussion of IT occurred as an integral part of the organization's strategic planning processes and management discussions.

In these organizations, management did not think of separating out an IT discussion during the course of strategy development any more than it would run separate finance or human resource planning processes. IT planning was an unseverable, intertwined component of the usual management conversation. This would suggest not having a separate IT steering committee.

IT Planning Had Neither a Beginning nor an End In many organizations, IT planning processes start in a particular month every year and are completed within a more or less set period. In the studied organizations, the IT planning and strategy conversation went on all the time. This does not mean that an organization doesn't have to have a temporally demarked, annual budget process. Rather, it means that IT planning is a continuous process that reflects the continuous change in the environment.

IT Planning Involved Shared Decision Making and Shared Learning IT leadership informed organizational leadership of the potential contribution of new technologies and the constraints of current technologies. Organizational leadership ensured that IT leadership understood the business plans, strategies, and their constraints. The IT budget and annual tactical plan resulted from shared analyses of IT opportunities and a set of IT priorities.

The IT Plan Emphasized Themes A provider organization may have themes of improving care quality, reducing costs, and improving patient service. During the course of any given year, IT will have initiatives that are intended to advance the organization along these themes. The mixture of initiatives will change from year to year, but the themes endure for many years. Because themes endure year after year, organizations develop competence in these themes. They become, for example, progressively better at managing costs and improving patient service. This growing prowess extends into IT. Organizations become more skilled at understanding which IT opportunities hold the most promise and at managing implementation of these applications. And the IT staff members become more skilled at knowing how to apply IT to support such themes as improving care quality and at helping leadership assess the value of new technologies and applications.

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 strategy implementation are not needed. Replacing an inpatient pharmacy system, enhancing help desk support, and upgrading the network, although requiring well-executed projects, do not always require leadership to engage in conversations about organizational goals or to take a strategic look at organizational capabilities and skills.

There are many times when it is unlikely that the way an organization achieves a goal will create a distinct competitive advantage. For example, an organization may decide it needs to provide personal health records to patients, but it does not expect that that application, or its implementation, will be so The Challenge of Emerging Technology The information technology industry in general and the health information technology industry in particular are ever-changing and evolving. New technologies are being introduced every day. How does a health care executive know when to support the adoption of the “latest and greatest” technologies? When does the organization acknowledge its current technologies are out-of-date and need upgrading? How much of the current literature about new technologies is “hype”? Which new technologies are likely to survive to become industry standards?

In this textbook we cover specific methods for selecting health care information systems to meet the health care organizations' operational needs. The questions posed here are more general in nature and relate to the technologies on which these systems are built. Take, for example, the use of smartphones and tablets by health care providers.

Individuals adopted those technologies for personal use with significant spillover into the work environment. Now hospitals and other health care organizations are purchasing these devices as a part of their overall information system infrastructure and are facing the challenges associated with incorporating these devices into their overall systems. At what point should the health care executives have known that these technologies were here to stay and were something to be managed? Do the early adopters of the technologies have an advantage or a disadvantage in the market?

There are no easy answers to these questions, but Gartner, Inc., has developed a useful framework for health care executives to think about when considering adopting new technologies. The hype cycle presents a view of how a technology will evolve over time. The stated purpose is to “provide a sound source of insight to manage its deployment within the context of . . . specific business goals.” The hype cycle (Figure 12.4) supports organizations in their decisions to adopt the technology early or wait for further maturation. There are five key phases to the cycle:

Technology trigger. A potential technology breakthrough kicks things off. Early proof-of-concept stories and media interest trigger significant publicity. Often no usable products exist and commercial viability is unproven. Peak of inflated expectations. Early publicity by proponents of the technology reaches a crescendo; often with little practical experience using the technology. Some companies take action; many do not. Trough of disillusionment. Interest wanes as experiments and implementations fail to deliver on the hype of the peak. The technology is often immature and users of the technology are just beginning to learn how to apply the technology to further organizational goals. Producers of the technology shake out or fail. Investments continue only if the surviving vendors improve their products to the satisfaction of early adopters.

Slope of enlightenment. More instances of how the technology can benefit the enterprise start to crystallize and become more widely understood. Second- and third-generation mature products appear from technology providers. More enterprises fund pilots; conservative companies remain cautious. The real value of the technology begins to emerge. Plateau of productivity. Mainstream adoption starts to take off. Criteria for assessing vendor and product viability are more clearly defined. The technology's broad market applicability and relevance are clearly paying off. superior to a competitor's personal health record that an advantage accrues to the organization.

Much of what IT does is not strategic, nor does it require strategic thinking. Many IT projects do not require thoughtful discussions of fundamental approaches to achieving organizational goals or significant changes in the IT asset. The Challenge of Emerging Technology The information technology industry in general and the health information technology industry in particular are ever-changing and evolving. New technologies are being introduced every day. How does a health care executive know when to support the adoption of the “latest and greatest” technologies? When does the organization acknowledge its current technologies are out-of-date and need upgrading? How much of the current literature about new technologies is “hype”? Which new technologies are likely to survive to become industry standards?

Peak of inflated expectations. Early publicity by proponents of the technology reaches a crescendo; often with little practical experience using the technology. Some companies take action; many do not. Trough of disillusionment. Interest wanes as experiments and implementations fail to deliver on the hype of the peak. The technology is often immature and users of the technology are just beginning to learn how to apply the technology to further organizational goals. Producers of the technology shake out or fail. Investments continue only if the surviving vendors improve their products to the satisfaction of early adopters. Slope of enlightenment. More instances of how the technology can benefit the enterprise start to crystallize and become more widely understood. Second- and third-generation mature products appear from technology providers. More enterprises fund pilots; conservative companies remain cautious. The real value of the technology begins to emerge. Plateau of productivity. Mainstream adoption starts to take off. Criteria for assessing vendor and product viability are more clearly defined. The technology's broad market applicability and relevance are clearly paying off.

In the strategic discussion of new technologies it is prudent to identify where the technology sits on the hype cycle. It may be premature to invest at scale in technologies that are the peak of inflated expectations. The organization may be well served to let the market evolve and the products mature before it initiates significant investment.

However, the organization may decide that the technology, although immature and cloaked in a fog of hype, has significant potential and that there is merit to conducting pilots so that the organization begins to understand the potential of the technology and develop prowess in its use. For example, the Internet of Things mentioned previously is solidly at the peak of inflated expectations. However, the organization's strategy may identify this class of technologies as a potentially very important contributor to its goal of monitoring the health of people with a chronic disease. Hence the organization will pilot the technology to better understand the impact of the technology in improving disease management.

Summary The development of IT alignment and strategic linkage is a complex undertaking. Four vectors, each complex, must converge. The difficulty of this undertaking is manifest in the frequent citing of IT alignment in surveys of major organizational issues and problems. There are no simple answers to this problem. At the end of the day, good alignment requires talented leaders (including the CIO) who have effective debates and discussions regarding strategies and who have very good instincts and understandings about the organization's strategy and the potential contribution of IT. Perspective Hype Cycle for Healthcare Provider Technologies and Standards On the Rise

FHIR Blue Button+

Real-time health care system Voice user interface At the Peak

Natural-language processing (clinical enterprise) E-prescribing of controlled substances Logical data warehouse C-CDA Clinical communications and collaboration Consent management Enterprise file synchronization and sharing Enterprise fraud and misuse management Secure text messaging Health care master data management IT GRCM Sliding into the Trough

Continua Business continuity management planning Unified communications Semantic interoperability/healthcare Legacy decommissioning End-user experience monitoring ICD-10 (US) Direct messaging HIE GS1 Healthcare (GDSN) HL7 Infobutton Climbing the Slope

Desktop virtualization Patient self-service kiosks Positive patient identification Vendor-neutral archive Enterprise mobility services Information life cycle management IHE XDS.b Location- and condition-sensing technologies User administration/provisioning Enterprise content management Patient portals Entering the Plateau

Strong authentication for enterprise access

Medical device connectivity Source: Gartner (2015). Used with permission.

It appears that organizations that are mature in their IT use have evolved these IT alignment processes to the point at which they are no longer distinguishable as separate processes. This observation should not be construed as advice to cease using planning approaches or disband effective IT steering committees. Such an evolution, to the degree that it is normative, may occur naturally, just as kids will eventually grow up (at least most of them will).

References Alter, A. (2007, Dec.). Top trends for 2008. CIO Insight, 88, 37–40. Bensaou, M., & Earl, M. (1998). The right mind-set for managing information technology. Harvard Business Review, 76(5), 119–128. Chandler, A. (1962). Strategy and structure. Cambridge, MA: MIT Press. Earl, M. (1993). Experiences in strategic information systems planning. MIS Quarterly, 17(1), 1–24. Gartner. (2014, Aug.). Hype cycle for emerging technologies, 2014. Retrieved May 2016 from http://www.gartner.com/newsroom/id/2819918 Gartner. (2015, July). Hype cycle for healthcare provider technologies and standards, 2015. Retrieved May 2016 from https://www.gartner.com/doc/3086917/hype-cycle-healthcare-provider-technologies Henderson, J., & Venkatraman, N. (1993). Strategic alignment: Leveraging information technology for transforming organizations. IBM Systems Journal, 32(1), 4–16. Information Management. (2016). Top 10 CIO concerns. Retrieved April 2016 from http://www.information-management.com/gallery/data-in-2016-top-10-cio-concerns-10027647-1. html Porter, M. (1980). Competitive strategy. New York, NY: Free Press. Weill, P., & Broadbent, M. (1998). Leveraging the new infrastructure. Boston, MA: Harvard Business School Press.