Healthcare organizations have a painful history of investing in expensive information technology solutions, only to end up disappointed. This often stems from a disconnect between the IT department’s role in the organization and the overall business goals of the enterprise. A number of factors can cause this misalignment, the first of which is that IT is historically a service-oriented, back-office function. IT sees their internal counterparts as clients rather than colleagues, and IT tends to focus first on complying with requests from other departments rather than contributing to, and prioritizing the overall goals and strategy of, the business as a whole.
Additionally, like many business units, IT departments often have a tendency toward empire building. They strive to grow the department through bigger projects, driving the need for more staff and more budget, elevating the influence of the department within the organization. This mentality can create a bias toward building, versus buying and/or outsourcing, regardless of what might be best for the company in the long-term.
In healthcare, we see this phenomenon most recently and most dramatically in the population health push. Provider organizations aggressively seeking ways to use big data to identify better clinical guidance and opportunities to improve quality and lower cost have been turning to their IT departments for guidance. The most common approach has been to launch massive data integration and enterprise data warehouse (EDW) projects costing in the tens of millions and taking 3-5 years to complete. Given the biases described above, these choices are not surprising, but a more impartial counsellor might argue that health systems should be in the business of patient care, not building advanced analytics and big data capabilities.
Projects like this ensnare IT departments in a trap of underperformance, and businesses often end up paying twice for the same project when they finally turn to outside solutions in an attempt to remedy the situation. Well-intended company leadership, as well as IT leadership, all too often find themselves in these situations. But, there is a new school of thought of how to approach transformational IT investments:
Run your IT department like business unit.
Start by aligning the department with the overall strategy and goals of the business, and tasking it with contributing to top and bottom line growth, just as any business unit would be expected to do. That way, IT is engaging its daily tasks with the values of the company firmly in mind, rather than just resolving ticket after ticket for their “customers” in sales or marketing. By shifting their focus toward strategic goals and opportunities rather than just taking orders, the IT department will re-orient around achieving outcomes that truly meet the needs of the business and do not just answer the question at hand.
Looking back at the population health example above, a properly empowered and aligned IT business unit might respond to the request for an EDW with questions about the fundamental wisdom of that approach rather than scoping out a multi-year development and implementation plan. Looking at outsourcing data integration and big data analytics to firms that are purpose-built for those tasks should be on their short list of approaches that would better align with corporate goals, incur much less risk and achieve accelerated time to value.
Once you’ve aligned your IT department with the business strategy, it will only be effective if IT is held accountable for its performance. To achieve this, you have to define success and how it is measured. Success may be measured in the form of time-to-market, customer satisfaction, or its contribution to revenue and margins. Whatever success looks like for your company, be sure to clearly define it so IT can develop and execute a proactive strategy, rather than being reactive order takers.
Ultimately, empowering your IT department to operate as a business with aligned values, defined goals, and the power to discern the best course of action will alleviate many of the chronic challenges that many IT departments face. Options like outsourcing capabilities (or finding partnerships) will come into play much more frequently, creating flexibility for the business, limiting risk and protecting the bottom line.