To ensure that an information technology project is a success, health care leaders must first define the benefits, then manage the project and realize its benefits.
|Roger Kropf||Guy Scalzi|
How do you define a successful information technology (IT) project in your organization? Most of us could probably agree with “on time, on budget and used productively by the intended staff.” But this happy occurrence is much rarer than it should be in health care.
One organization enjoying success of this kind is University Hospitals (UH), a multihospital system with headquarters in Cleveland (www.uhhospitals.org). A few years ago, UH instituted changes in IT governance and project management that have substantially increased the percentage of IT projects that are on time and on budget—from 50 percent to 90 percent.
Among the changes at UH was involving health care managers in IT projects from beginning to end. Managers at UH, and at any organization, must perform three major tasks to obtain value from investments in IT: define the benefits, manage the project and realize the benefits.
Define the Benefits
Defining and agreeing on what value IT brings is essential to success. This is not a trivial task, since IT projects may be undertaken for multiple reasons, and some of the benefits are hard to measure. Financial return on investment (ROI) is one type of value, but IT projects may be undertaken for reasons other than financial return, such as improving clinical quality and patient safety.
Even when financial ROI is the primary goal sought, estimating the financial return may not be easy. Some returns, such as reduced document storage costs, are more certain than others, such as reduced labor costs. Health care managers need to lead their organizations in selecting and using measures of value before making an investment.
To “define the benefits,” health care organizations should:
- Estimate the benefits of an IT project before implementing it;
- Reach agreement on the benefits—tangible and intangible, hard and soft—that are being used to justify the expenditure;
- Decide on the dollar or effort threshold for writing business cases for IT investments and mandate them (recognizing that some projects are not evaluated by financial criteria); and
- Require that an executive sponsor the IT project, as projects with strong sponsorship are more likely to succeed.
Manage the Project
Health care leaders widely consider IT difficult to implement. Implementation requires involving senior and professional project managers. This means putting in place a structure to decide which projects should be undertaken, who is responsible for them, how changes will be made and what resources will be used. Health care leaders should assemble a team of trained project managers to monitor progress and to create systems that provide information on the project. This usually calls for selecting a software tool that enables the collection, analysis and communication of information on projects.
To “manage the project,” health care organizations should:
- Hire a staff member certified in project management or have an existing staff member trained.
- Create a project management office (PMO) even if it is staffed by only one person.
- Make sure the PMO disseminates and provides education and consultation on a project management methodology.
- Agree on who can make decisions and with whom they must consult before money is spent on IT.
The CEO must lead this process.
Realize the Benefits
What can managers do to get the benefits expected? Benefits aren’t automatically achieved because the project is completed and the systems work as planned. IT that produces labor savings doesn’t necessarily result in lower labor costs or allow current staff to redirect their time to another valuable activity. Managers need to ensure that the benefits defined at the beginning of the project are achieved. This requires a plan for achieving them as well as ongoing analysis.
To “realize the benefits,” health care organizations should:
- Conduct a post-implementation audit to determine if the expected benefits are realized;
- Aggressively pursue the benefits by assigning someone the responsibility of achieving them (and evaluate that person on whether the benefits are realized);
- Support those being held accountable (create teams with the knowledge and resources to define the benefits, measure progress and help those accountable produce the changes in processes and staff behavior that will be needed); and
- Develop a contract that includes service level agreements.
Service Level Agreements
Service level agreements (SLAs) are contracts between the organization or a unit within the organization and an internal or external provider of services.These agreements define standards of performance for essential IT services. One SLA may state, for example, that “65 percent of calls to a help desk result in the immediate resolution of the problem on the phone.” Another SLA may state that “the computer network is available 99.9 percent of the time during a given month.”
Some guidelines for using SLAs include the following:
- Use SLAs regardless of whether the hospital outsources IT or uses internal staff;
- Meet with managers and users to define and agree on the SLAs (and continue to change SLAs, raising the target or dropping it if it is regularly achieved, or adding a new one);
- Base a performance evaluation of the IT department and the CIO, at least in part, on their achievement of the SLAs; and
- Conduct customer satisfaction surveys regularly for all the components of IT.
People Make IT Work
Although we advocate adopting systems, processes and procedures, we understand that focusing on people—involving them and helping them deal with change—is critical to success. If people are forgotten, senior managers can drive the project to failure because clinicians resist implementation. The project may be “on time, on budget,” but it may still be a failure.
Focusing on people means taking specific actions, including:
- Involving all stakeholders early in the project;
- Identifying influential and committed “champions” within affected departments;
- Creating budgets and timetables based on experience that everyone buys into;
- Communicating frequently and in multiple formats (in writing, in person, individually and in groups); and
- Finding and giving authority to leaders in the user community.
In conclusion, IT is about the people as well as the tasks. IT projects require leaders to apply change management and human relations skills as well as methodologies for defining value, managing projects and realizing the desired benefits.
Roger Kropf, Ph.D., is a professor in the health policy and management program at New York University’s Robert F. Wagner Graduate School of Public Service in New York City. Guy Scalzi, M.B.A., is executive vice president of Veloz Global Solutions, headquartered in Mountain View, Calif.
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