This paper covers two distinct but related topics in information technology management. The first section presents a structured IT acquisition plan for a new video shop, walking through problem identification, requirements documentation, alternative solutions (ethics training and e-business structures), risk analyses, work breakdown, economic analysis, and an investment assessment rating matrix. The second section examines the application of information technology in healthcare administration, drawing on an interview with a healthcare CEO and supporting literature. It addresses e-health adoption drivers and barriers, cultural and social adjustments required for hospital IT implementation, organizational decision-making frameworks, and cost constraints that continue to limit IT diffusion across healthcare institutions.
Organization: Showtime Video Store
Component: Business Capture Group
The problem is that no real information technology security measures are employed in the video shop. There is very little awareness of necessary IT security measures among the current management, which is why an effective IT security plan and structure must be implemented to prevent copyright infringement and theft.
The problem directly affects all products and videos available to customers — both online and on-site.
The guidelines associated with the information security strategy should incorporate contingency actions that will allow the video shop to endure and respond to any disruption or crisis. Actions such as data storage and extraction using data-warehousing and data-mining techniques, preserved equipment, and implementation of a Database Management System (DBMS) are of great importance for enabling consistent overall functionality.
Assemble the organizational information security strategy for the video shop: Managerial executives of the video shop should provide appropriate guidance based on their own experience and expertise, systematize information security guidelines, generate efficient methodologies and mechanisms, augment procedural methodologies, and ensure accurate filing of all procedures.
Ensure employee acknowledgment: To adhere to strict and dedicated implementation of the video shop's information security guidelines, every employee should understand the significance of these guidelines and provide an explicit signed acknowledgment of them.
Ensure confidentiality agreements: Clearly formulate confidentiality agreements that will protect the video shop in situations where external parties are engaged in ventures that require strict correspondence involving classified information.
Guarantee the security of premises and informational equipment: Workplace materials — including procedural filings, technical data, intranet hardware and software, wiring, and other vital components — should be addressed with the utmost priority, and protecting them should be of the highest importance.
The performance gap lies clearly in the lack of IT measures and the low level of awareness of those measures at the administrative level. This leads to a deficit in IT applications needed to improve security.
Sales revenue, return on assets, return on investment.
Chief Executive Officer, Video Distributors, Manager of IT Department.
Investigate the feasibility of current security measures applicable in video shops with similar structures. Use those strategies as a basis to customize IT security measures and then implement them with backup contingency plans applicable to different risk scenarios.
IT security measures will definitively address the current shortcoming in this video shop's security posture, and IT services will become increasingly necessary over time.
Objective of the Requirements: Ethics
All personnel should understand their obligations, which are aligned with the expectations of the video shop. As encountered by Siemens, a corruption inquiry prompted management to instill ethical values and accountability from the lowest level of personnel to the highest — in contrast to the usual practice of training top-tier staff first and then moving downward through the organizational hierarchy.
When initiating a profit-generating venture, it is common practice to consider all associated factors — both positive and negative. Although the factors for a video-based venture will differ in nature compared to those of a conventional venture, the most effective approach during the planning phase is that the primary objective of the evaluation should be congruent with and focused on the anticipated success factors.
There are few if any personnel currently employed in the firm who can assert and implement the necessary security measures. The video shop is a new business and therefore has a very limited network of suppliers and contracts from distributors.
The anticipated cost of an entirely new IT security system will be upward of $200,000 for the initial investment. Upgrades to these security systems will also cost between $2,000 and $30,000 on a quarterly basis. Monthly maintenance costs will depend on the overall software applied for the security matrix and its scope.
All employees will need to be trained on the new requirements that IT acquisition will bring to the business. A new department — whether an IT department or an R&D department — will need to be established to focus on the upgrades and advancements of the IT acquisition over time.
Establishment of a network security structure and contractual agreements with IT experts in the industry.
The solution must be provided for the entire online database as well as the physical shop location.
The acquisition can be completed within three to four months in order to achieve heightened security quickly and generate early financial returns.
Regular training sessions for the workforce; attainment of contractual agreements with distributors.
Objective: Reduce the amount of time required to prepare graphics for proposals and to integrate graphics with text.
A contemporary training schedule was formulated that encompasses the ethical obligations of personnel, granting them an accurate understanding of their individual responsibilities associated with their roles. Similarly, certain ethical challenges were faced at HP, creating difficulties for staff. Management should therefore formulate a training schedule capable of addressing these issues. These decisions benefit both the video shop and its employees because they encourage healthy participation from staff, which ultimately leads to overall improvement in the organization's functioning.
It is important to assess the commodities or services that can be traded through a video shop. Services, compared to physical commodities, are more readily exchanged through a video platform due to their intangible nature. Therefore, when assessing the details of a video-based venture, one should understand every detail carefully. Evaluate every commodity or service that can be traded, assess the pricing of different items within that commodity or service category, and if feasible, gather information on the reputation of that commodity or service among consumers. Always bear in mind that pricing criteria differ from venture to venture, and it is good practice to assess the psychology behind pricing decisions rather than focusing solely on absolute figures.
It is straightforward to recognize that an online video shop venture would generally require a website. The common practice is to use an existing domain name, which either involves an annual outlay or a lump-sum payment if the domain is already owned; the annual arrangement is generally more cost-effective. When purchasing a domain, the question of renaming the website in line with the venture arises. After arranging a website, a web hosting solution is required to present the website on the World Wide Web. Appointing a specialized entity that offers web hosting and assists with any prospective issues is a very efficient way to secure an internet-based venture. To build a website there are two approaches: hiring a graphic designer to construct a creative and novel site — which could be important for the brand image of a video shop — or using software that assists in website construction by offering templates and layouts.
IT Acquisition Confirmation: Each alternative solution described above requires the acquisition of IT services from an external IT service provider selected in open competition.
Alternative #1 — Ethics and Training: Can meet all requirements; feasible; supports the enterprise architecture with no conflict. Risk includes potential conflict between business ethics and social ethical standards. Costs are the highest of the alternatives but remain affordable, requiring regular sessions with trained IT professionals. Creates increased business awareness. Ranked #1.
Alternative #2 — E-Business Structures: Can meet all requirements; feasible; supports the enterprise architecture with no conflict. Risk includes lack of prior experience potentially leading to amateur e-business constructions and rigid structures in the initial stages. Higher costs, but justified by the urgency and necessity of IT application. Offers long-term benefits for conducting business beyond time and space limitations, enabling the business to scale nationally without investing in additional tangible assets. Ranked #2.
Risk: Conflict between business ethics and social ethical standards.
Organizational Risk:
Complexity Risk (Unforeseen Assumptions): Probability: 15%; Impact: $5,000–$20,000; Mitigation: Run prior analysis on costs, possible patterns, and identification of variables based on competitor analysis; Approximate Risk Exposure: $1,000–$3,000; Priority: 4.
Infrastructure Risk (Possible Hardware and Software Problems): Probability: 40%; Impact: $20,000–$40,000; Mitigation: Require regular check-ups and maintenance calls; Approximate Risk Exposure: $20,000–$30,000; Priority: 5.
Average Probability: 22% | Total Approximate Risk Exposure: $43,000–$50,000.
Risk: No prior experience could lead to amateur e-business constructions and rigid structures in the initial stages.
"Probability, impact, and mitigation for each solution alternative"
"Hardware, development, training costs and five-year benefit projections"
The primary questions addressed to the interviewee included the following:
The interview was a face-to-face conversation. Because the questions were open-ended, there was opportunity to ask follow-up questions based on the interviewee's responses. The interviewee works at a local hospital and also practices at local clinics, and chose to remain anonymous for this study.
"Information technology (IT) has the potential to improve the quality, safety, and efficiency of health care. Diffusion of IT in health care is generally low (varying, however, with the application and setting) but surveys indicate that providers plan to increase their investments. Drivers of investment in IT include the promise of quality and efficiency gains. Barriers include the cost and complexity of IT implementation, which often necessitates significant work process and cultural changes. Certain characteristics of the health care market — including payment policies that reward volume rather than quality, and a fragmented delivery system — can also pose barriers to IT adoption. Given IT's potential, both the private and public sectors have engaged in numerous efforts to promote its use within and across health care settings. Additional steps could include financial incentives (e.g., payment policy or loans) and expanded efforts to standardize records formats, nomenclature, and communication protocols to enhance interoperability. However, any policy to stimulate further investment must be carefully considered because of the possibility of unintended consequences" (Medpac, 2004). This assertion sums up precisely what the local healthcare provider highlighted in the interview.
The interviewee was forthcoming in saying that IT could prove a useful addition to the healthcare sector if and when people in the industry became open to it. He confirmed that there were promising signs of increasing investments, but that IT costs and required cultural changes remained the main deterrents for most local healthcare providers and recipients.
The interviewee added that by offering new IT techniques and methods, healthcare providers and recipients gain the ability to willingly access and utilize all relevant health data, thereby increasing the probability of improved healthcare quality, protection, efficiency, and competence. He also noted, however, that only a small number of healthcare providers have successfully implemented modern IT structures, and that these successful cases could serve as foundations for many local providers.
Most recent studies assert that this minimal level of IT penetration in healthcare is partly a result of the complex IT investment structures that extend beyond mere technology adoption and require alterations in established work structures along with increased responsibility for healthcare staff (Medpac, 2004; Graham et al., 2010).
Other aspects that discourage IT implementation — as highlighted by the interviewee — include the existing market structure in the IT domain. The interviewee explained that healthcare is fundamentally about quality of life, not volume of services, which is why IT infrastructure can seem like a poor fit. Most payment policies and structures are designed to incentivize quantity over quality, a major de-motivating factor for providers and recipients who want high-quality care. One way to counter this, in the interviewee's view, is to study more closely the implementation structures of healthcare providers who have successfully integrated IT into their medical services. This would help others recognize whether IT enhances quality and, if so, adopt the appropriate model for their own institution.
Numerous studies support this conclusion, finding that observing other IT implementations encourages wider adoption. Such observation also ensures that necessary processes are analyzed and outlined before adoption, that healthcare providers receive adequate training and knowledge beforehand, and that only those processes demonstrably beneficial to the specific institution are adopted (Medpac, 2004; Graham et al., 2010).
"Any policy to stimulate further investment must be carefully considered because of possible unintended consequences — such as implementation failures due to organizations' inability to make the necessary cultural changes" (Medpac, 2004).
The aim for all healthcare providers like the interviewee chosen for this study is to provide top-quality healthcare services. For this purpose, the interviewee explained, healthcare providers and recipients need to find common ground on these complex issues by gathering information from different authoritative sources. Once that common ground is established, the following outcomes are expected to further encourage IT penetration within healthcare structures:
Having outlined these potential benefits, it is important to note that the IT structure can deliver them only when the right structure is implemented in the right environment. The interviewee was very clear on the importance of finding the "best fit" for any institution, explaining that IT investment cannot be blind or short-sighted. Alongside observing successful IT structures elsewhere, it is important for healthcare providers to analyze their own institution's atmosphere and structure and identify the most beneficial, customized IT format. Overall social circumstances and economic conditions must also be taken into account from the outset in order to avoid unnecessary obstacles in early implementation stages.
Numerous studies support this position, noting that recognizing the best fit is critical because different settings can produce different effects from the same IT structure. While some technologies can universally improve care, the focus must still rest on personal institutional analysis first, since many evaluations are conducted from restrictive viewpoints and have limited coverage of human environments and structures (Medpac, 2004; Graham et al., 2010).
Currently, healthcare institutions generally utilize far fewer IT models than industries in other sectors, confirmed the interviewee. However, surveys indicate that healthcare service providers are increasing their investments in IT. The interviewee further explained that the amount of IT investment and the categories of structured investments vary by location and institutional type.
For many healthcare providers, quality improvement and practice development are the main drivers of IT adoption. In most other industries, the primary motivation for IT investment is monetary gain and production efficiency, which is why IT structures tend to emphasize those benefits — and why healthcare, dominated by quality demands rather than profit motives, is slower to adopt them. Moreover, the interviewee noted that when the promoted IT structure has no tangible evidence of increased quality of care, the expenditure and complexity of IT implementation — including the essential managerial and workflow restructuring requirements — create further barriers for most healthcare providers. Doubts also persist about the reliability and efficiency of IT across all spheres, particularly in healthcare (as supported by Medpac, 2004; Graham et al., 2010).
As Medpac (2004) noted in support of the interviewee's observations: "The larger health care market poses additional barriers to investment in IT. Payment systems that tie reimbursement to the volume of services delivered, for example, may penalize providers who improve quality in ways that result in fewer units of service. To the extent that IT investments lead to reduced volume, many who make the investment will not reap all of the benefits. Systems that integrate care across settings tend to be more advanced users of IT because they are able to capture some of these efficiencies. In addition to barriers posed by payment systems, a fragmented delivery system leads to redundant investments by multiple providers who lose the benefit of economies of scale. Although this aspect of our delivery system is a barrier to adoption, widespread use of IT could help providers coordinate care across settings, overcoming some of the problems of fragmentation" (Medpac, 2004).
The interviewee was quick to acknowledge that both private and public sectors have made numerous efforts to encourage IT investments across the healthcare industry (as supported by Medpac, 2004; Graham et al., 2010). Recent efforts to encourage investment include:
In some cases, the following additional steps could be implemented in the future to encourage increased IT investment in healthcare:
"In general, IT allows health care providers to collect, store, retrieve, and transfer information electronically. However, more specific discussion of IT in health care is challenging due to the lack of precise definitions, the volume of applications, and a rapid pace of change in technology" (Medpac, 2004).
There are many terminologies used to identify the different kinds of IT mechanisms and tools and the ways in which they can perform in certain settings. These terminologies are also indicative of the different ways that IT mechanisms and technologies can be altered and customized based on the setting. It is important to note that the terminologies and functions of IT tools continuously change and update as new advancements are made. This means that a particular IT structure can have different models, with each new model bringing a new set of functions applicable in specific settings (Graham et al., 2010). As a result, all technological changes brought about by IT adoption carry with them certain cultural transformations and social adjustments that are either prerequisites or consequences of adopting IT structures within healthcare processes.
A good example of the social and cultural adjustment required with technological incorporation can be found in the study by Brailer and Terasawa (2003). They observed the computerized provider order entry (CPOE), which is primarily designed to decrease manual communication errors among physicians, nurses, patients, and other healthcare providers. The CPOE allows all entries to be made into the computer system at once and retrieved whenever required, canceling out the risk of incorrect recollection. This structure is frequently used for prescription drug order entry as well as physician-recommended remedies or orders for patients — including requests for x-rays, third-party physician consultation, patient transfers, or treatment transfers (Brailer and Terasawa, 2003). The biggest adjustment accompanying CPOE adoption was the training of all healthcare providers and personnel on how to use it — from general entries to accessing and inputting all relevant data. While this did not cause major social or cultural upheaval, it did require a change in routine for healthcare providers who, given their already demanding schedules, were not particularly receptive to additional training for technological integration.
"Relatively little is known about the level of diffusion of IT in hospitals and strategies hospitals take when making IT investment decisions. Much of the existing information about IT diffusion comes from voluntary surveys, some of which are conducted on the Internet. Therefore, the results may not be representative and may be biased toward more advanced users of IT. Given the evolving state of the technology and limited availability of nationally representative surveys, varying estimates of IT diffusion exist. The following discussion draws on a literature review on hospital IT investments conducted for MedPAC by Abt Associates. It also draws on interviews Abt Associates conducted with hospitals that have made significant investments in IT, and some that have not, to better understand IT investment decisions" (Medpac, 2004; also see Abt Associates 2004a and 2004b).
"Hospital IT diffusion, cultural adjustments, and funding constraints"
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