Implementation of It Projects in Healthcare Indusrty

1. Introduction

The famous article “IT doesn’t Matter” by Nicholas G. Carr created a hot debate on the usage of IT to achieve strategic goals in 2004. It quoted several examples like electricity, rail roads to illustrate his point that IT has slowly developed into a commodity rather than strategic resources. Though Carr recognized that there is benefit in having the first mover advantage in implementing a new IT system in the industry, he insisted that this is short lived. His argument is that eventually other competitors will replicate the system and implement it in their organizations, as IT systems are readily off the racks nowadays. This will level the playing field again.

He also pointed out that best practices can be incorporated into the IT systems to assist companies using them to reap even more benefits from implementing the systems. Work processes and flows will then be redesigned to work around the systems to attain efficiency. In this manner, best practices elsewhere can be easily replicated and implemented. Thus, all these lead to the fast diminishing of the strategic importance of IT.

There are several articles and reports that attempted to counter Carr’s arguments that IT no longer matters.

One of them is from Rob Garrison titled “IT Still Matters”. In this article, Robson mentioned that though the spending on massive IT projects is reducing in recent years, companies are still spending on IT projects. He observed that many CIOs are not ready to give up on innovation or their strategic roles yet. These CIOs are still putting their faith on technology-driven innovation to create long lasting competitive advantage. He has cited several examples in his article on how companies from various industries like internet, manufacturing to energy producers, consumer good makers and sports teams are using IT to improve their businesses and to capture a bigger pie in the market.

In addition, he challenged Carr’s point that companies can easily copy others’ best practices by incorporating them into their IT systems. He countered that human factors will need to be considered as well before a company can reap benefits from implementing a new IT system. We will revisit this point at a later part of this paper.

However, missing in these two articles is the mentioning of the healthcare industry. This is quite a unique industry as people tend to see it as less profiteering and more customers oriented. This industry is growing at an amazing speed in recent years due to more and people becoming more health conscious and global increase in life expectancy.

Thus, can IT be used to enable the hospitals, medical centers or clinics to gain any competitive advantage?? How can this group make use of IT systems to improve their customer service, both internal and external? What are the challenges and key considerations for example a hospital or health group to tackle and handle when they want to implement IT projects?

2. Growth of IT Investment in Healthcare Industry

People in the healthcare industry might have been inclined to agree with Carr’s point that in “IT doesn’t Matter” that IT has little impact on a company’s competitive strategy, as they have been slow in using IT in improving their processes and services all this while. However, situation has changed, especially for the recent three years. IT investment in healthcare is growing fast. It recorded a 4.9% growth in 2006 higher than any other industries. Its strong growth is expected to last till 2010. Why the sudden change now?

As mentioned in the articles “Flexing Their IT Muscles” and “IT Implementation: Challenges and Solutions”, the healthcare organizations have now starting to savor the benefits of what IT has brought. After enjoying little taste of sweetness it brought, they are now craving for more.

3. Success Stories

A few success stories are being cited in the article “Flexing Their IT Muscles”. One of them is Estrella Medical Center in Phoenix, owned by Banner Health. Banner Health has the opportunity to build the center from ground up as all digital and they take full advantage of it. After they realized the power of having the right information at the right time, it just makes them keener to duplicate the success at Estrella at other facilities as well. Banner Health believes that IT will help in differentiating them from the other competitors in terms of providing a better patient care experience and also in providing a more satisfying workplace for their employees. Banner Health has implemented its IT projects in a manner that they believe contributed to the success of the projects. That is the active involvement of all the stakeholders.