The Impact of IT on Hospitals Dr. Yan-Dih Cheu Department of Healthcare Administration I-Shou University

Introduction Hospitals are also organizations IT improves medical quality IT improves the efficiency and effectiveness of hospital operations

Facts to Remind IT offers new ways to change the structure of an existing organization or design an entirely new non traditional one IT can substitute for physical proximity and contact in a number of situations Top management has a key role to play in the management of information processing activities in the organization

What are Information Systems? Information systems exist in the context of an organization; they do not operate in isolation

What are Hospitals? An organization is a rational coordination of activities of a group of people for the purpose of achieving some goal How about “Hospitals?”

Modern Organizations They are many factors that influence the structure and design of modern organizations –Uncertainty –Specialization –Coordination –Interdependence

Uncertainty Managers try to eliminate or reduce uncertainty Where “Uncertainty” comes from? –Outside or inside of an organization? There is some evidence that uncertainty is most effectively handled by decentralizing decision making to management level in the organization with information to resolve it

Specialization Why specialization can influence the structure and design of modern organizations?

Coordination When there is specialization, one task of management is to coordinate the diverse specialties to achieve the goals of the organization Management must balance differing orientation and resolve disputes between specialized subunits

Interdependence The type of interdependence affects the amount of power one unit has in the organization Three types of mutual dependence –Pooled interdependence –Sequential interdependence –Reciprocal interdependence

What Is Organization Flexibility? Flexibility is the ability to adapt when confronted with new circumstances A flexible organization defends quickly against threats and moves rapidly to take advantage of opportunities

IT and Organizational Flexibility IT has the ability to change the pace of work and to alter time and space boundaries for work With properly designed systems, the organization can increase its ability to respond to customers, competitors, and the environment in general

MIS Belief The purpose of employing any technology is to obtain an advantage over old ways of doing business

Framework A framework provides you with a view to organize your thoughts and analyze a problem A framework is not necessary accepted by everyone

Anthony’s Framework of MIS MIS support management activity, that is, the structure of IS can be classified in terms of hierarchy of management planning and control activities (Anthony, 1965)

Simon’s Framework of DM The decision making stages of intelligence, design, and choice proposed by Simon (1965) Programmed and Nonprogrammed decisions

Harold Leavitt’s Framework for IT Applications Organizational Structure People Firm’s Technology Environment Information Technology Task Environment

Decision Support, Executive IS, and Expert Systems Decision Support Systems Executive Information Systems Expert Systems Group Support Systems

Knowledge Work Support Personal Computers Office Software Portable Computer: –Notebooks –PDAs (Personal Digital Assistants)

Interorganizational Systems Partnerships and strategic alliances are created and enhanced with interorganizational systems. (IOSs) IOSs can vary from connections to full system-to-system connections. IOSs make possible Virtual Components in which a partner substitutes for some component of your company. (eg. Federal Express)

Key Technology Communications Networking Database

The Basics of Information Systems Some Generic Types of Systems –Transactions Processing Systems –Decision-oriented Systems –Communications-oriented Systems

Transactions Processing Systems Input ValidateUpdateOutput Report User Database Workstation

Decision-Oriented Systems Retrieval System Analysis and Presentation Model Management User Database Workstation Model Base

Communications-oriented Systems User Workstation User Workstation Computer Mail Box Communications Link

Different Types of Technology Simple Batch Systems Inquiry Fully On-line Command and Control Internet/Intranet Client-Server

Is There Value in IT? Various Observers have criticized information technology for not providing a satisfactory return on investment. How valid is this criticism? The Investment Opportunities Matrix shows that there is not the same likelihood of a return from each IT investment.

What is Value? Investment can be measured in –Direct measurement: Money, NPV, ROI,…etc. –Indirect measurement: preventing negative return, keeping up with a competitor, avoiding loss in market share. –Indirect measurement is hard to measure

Implications for Management Why should you care about different kinds of technology? How do you adapt and use a combination of old and new technologies when you work in a business with old technologies?

The Nature of Information Information can be defined as some tangible or intangible entity that reduces uncertainty about some state or event Information is data that has been processed into a form that is meaningful to the recipient and is of real perceived value in current or prospective decisions

Characteristics of Information Time Frame Historical Predictive Expectation Anticipated Surprise Source Largely Internal Largely External Scope Detailed Summary Frequency Real Time Periodic Organization Highly Structured Loosely Structured Precision Highly Precise Not Overly Precise Decision Type Operational Control Strategic Planning Managerial Control

From Information to Knowledge Knowledge can be defined as information plus know-how (Kogut and Zander, 1992) Information alone is not enough to produce knowledge We must also understand the best way to use information to solve a problem, contribute to a product or service, or make a similar contribution to the organization

From Information to Knowledge Knowledge builds over time in the heads of employees in the form of past decisions, processes in the organization, characteristics of products, interests of customers, and similar experiences

The Role of CEO A key task of top management is formulating corporate strategy –What opportunities for new directions are available? –What are competitors doing?

The Role of IT IT offers new ways of doing business IT can speed up the pace of work and increase the capacity of processing IT can alter the space and time boundaries of work

The Value Chain The activities in an organization add value to its products or services (Porter and Millan, 1985) The primary activities in the value chain include inbound logistics, operations outbound logistics, marketing and sales, and service

The Value Chain Each of these activities adds value directly to the firm’s output Supporting these primary activities are the firm’s infrastructure, human resource management, technology development, and procurement

The Value Chain What is the potential impact of IT on the value chain? –Low-cost producer –Differentiation –Market niche

Four Steps to Take Advantages of IT Look for ways to incorporate technology in a product or service Seek ways to use technology to connect with other firms Look for ways to use technology to make dramatic changes in the way your structure the organization Integrate technology with planning

Creating and Sustaining A Competitive Edge Using resources to advantage Protecting an IT innovation –To sustain an advantage is to overwhelm the competition with technological leadership

Integrating Technology with the Business Environment Managers must consider how technology affects their decisions and how their decisions affect the technology

The Mgmt Challenge of Integrating Tech Information technology Search for new technology (find out what technology offers) Seek opportunities Decision making Planning Execution Technological constraints Manage existing technology Manage development of new technology + Constraints Impact Technology Opportunities

A Framework for Managing IT Vision for the Organization & Information Technology IT and Organization Structure Corporate Strategic Plan Strategy Alliances & Partnership IT Infrastructure IT Initiative Ongoing IT Operations Integration of IT and Decision Making

Questions & Discussion