We have seen remarkable advances in information technology: mobility, cloud computing, machine learning, ubiquitous networks, sensors and augmented reality.
Ensuring that IT investments result in organizational value, however, remains difficult. Too often, leaders invest significant resources in acquiring and implementing IT but are disappointed with the results. The envisioned value of the IT investment frequently dissipates or becomes much more arduous to pursue than planned. Care quality may not be demonstrably better. Accounts receivables performance metrics are stuck in low gear. Costs have not been reduced.
Achieving value from IT investments requires skilled management. There is no computer genie that descends on the organization once the system is live, waves its wand and — shazam! — value has occurred. Achieving value is difficult, but it’s possible.
Do your homework
Leaders sometimes base IT investment decisions on proposals that rest on shaky ground. They may not rigorously assess the magnitude of the potential value, they may poorly understand the nature of related organizational changes, and they may underappreciate the necessary resources. They fail to do their investment homework, elevating the risk of a suboptimal return.
If the IT investment proposal is sound, the leadership team should be able to respond with a strong yes to each of the following questions:
- Is it clear how the investment advances the organization’s strategy?
- Is it clear how care will improve, costs will be reduced or service will be better?
- Are the measures of current performance and expected improvement well-researched and realistic?
- Have the related changes in operations, workflow and organizational processes been defined?
- Are the leaders whose responsibilities are the focus of the proposed investment clearly supportive? Could they give the project proposal presentation?
- Are the resource requirements well-understood and convincingly presented?
- Have these requirements been compared with those experienced by other organizations undertaking similar initiatives?
- Have the investment risks been identified, and is there an approach to addressing these risks?
- Do our leaders have the right people assigned to the project?
- Have our leaders freed up time for those people?
- Are those people well-organized?
Answering with a “no,” a “maybe” or an equivocal “yes” to any of these questions should cause leaders to consider that the discussion is focusing on an expense rather than an investment.
Few meaningful organizational initiatives are accomplished without appropriate accountability. Ideally, there is a person who is accountable for delivering the desired IT-enabled value, although enterprisewide systems may have several individuals filling this role. Accountable people must have the necessary authority, governance mechanisms, tools and resources. These individuals must also have strong political support as they navigate the often-treacherous waters of introducing new IT.
Value does not automatically occur when an information system is put into place. Value must be managed into existence. Value gains occur through day-in, day-out changes in operational processes; fine-tuning of system capabilities; and follow-up in staff training. Someone has to identify and make operational changes, manage changes in system capabilities and ensure that needed training occurs.
Accountability requires metrics to measure the organization’s progress toward its value goals. These metrics should be those reviewed when the proposal to make the investment was discussed, and all members of the leadership team should be conversant with the status of the organization’s efforts to achieve these metrics.
Manage the change
A new IT system brings change to the organization. Sometimes the changes are modest alterations of workflow and roles. Other times, the changes are truly transformative: An example is introducing a system that accelerates the organization’s movement to population health management.
Managing major change is challenging. It requires leadership, compelling language and vision, trust between leaders and the organization, appropriate organizational incentives and planning, implementation, and iteration. In many ways, the term “information system implementation” is deceiving and, frankly, dangerous. The term “information system–enabled significant organizational change” is more reflective of the nature of the undertaking.
Managing change requires addressing complex, interacting parts of the political, cultural and work-process fabric of the organization — factors made more complex given the diverse professionals and care venues that make up a health system.
Furthermore, IT-enabled value requires business practice innovation. If an organization merely computerizes existing processes without rectifying problems, it may have merely made process problems occur faster.
Finally, innovation is iterative. The organization must engage in a cycle of change-assess-change-assess on its way to more efficient and effective care. The change process never ends.
Shorten the cycle
Projects should have short deliverable cycles. Rather than asking the organization to wait 12 or 18 months to see the first fruits of its system implementation labors, leaders should try to deliver a sequence of smaller implementations. For example, one leader might conduct pilots of an application in a subset of the organization, followed by a staged rollout. Another leader might plan for serial implementation of the first 25 percent of the application features.
Pilots, staged rollouts and serial implementations enable the organization to (1) achieve some value earlier rather than later, (2) support organizational learning about which system capabilities are really important and which were only thought to be important, (3) facilitate the development of re-engineered operational processes, and (4) create the appearance (the importance of which is not to be underestimated) of greater value. Pilots, staged rollouts and serial implementations, however, are not always possible.
Manage implementation well
One guaranteed way to reduce value is to mangle the management of the implementation project. Implementation failures, significant budget and timetable overruns, really unhappy users — all of these dilute value.
Among the many factors that can lead to mangled management of complex projects are the following:
- The project’s scope is poorly defined.
- The accountability is unclear.
- The project participants are marginally skilled.
- The magnitude of the task is underestimated.
- Users feel like victims rather than participants.
- All the world has a vote and can vote at any time.
Complex projects require superior project management, solid project governance, skilled use of project management tools and techniques, great teamwork, and initiative resiliency and adaptability.
Focus on outcomes
Business outcomes should be celebrated. Organizations usually hold parties shortly after applications go live. These parties are appropriate; a lot of people worked very hard to get the system up and running and used.
“Up and running and used,” however, does not mean that value has been delivered. In addition to go-live parties, organizations should consider business value parties — celebrations held once the value has been achieved. Go-live parties alone risk sending the inappropriate signal that implementation is the end point of the IT initiative. Value delivery is the end point.
Rarely do organizations revisit their IT investments to determine whether the promised value was achieved. Post-implementation audits can identify progress toward value and the steps needed to achieve maximum gain. An organization might decide to audit two to four systems each year, selecting systems that have been live for at least six months. During the course of the audit meeting, these five questions can be asked:
- What goals were expected at the time the project investment was approved?
- How close have we come to achieving those original goals?
- What do we need to do to close the goal gap?
- How much have we invested in system implementation, and how does that compare with our original budget?
- If we had to implement this system again, what would we do differently?
Post-implementation audits assist value achievement by:
- Signaling leaders’ interest in ensuring the delivery of results.
- Identifying steps that still need to be taken to ensure value.
- Supporting organizational learning about IT value realization.
- Reinforcing accountability for results.
Realizing IT’s potential
IT investment may be one of the most strategic (and expensive) initiatives ever undertaken by an organization. Leaders should focus their attention accordingly.
Ensuring that the desired value is realized is difficult work that extends over long periods of time. IT can enable an organization to make significant improvements in its performance. Great management is required to harness this power.
John Glaser, Ph.D., is the senior vice president of population health with Cerner in Kansas City, Mo. He is also a regular contributor to H&HN Daily.
The opinions expressed by the author do not necessarily reflect the policy of the American Hospital Association.