IT Value Stack

Healthcare IT: Saving Lives, Saving Money

On Cisco's High Tech Policy blog Paul Redifer writes:

"The US health care industry has been one of the last to benefit from the increased efficiencies brought by the adoption of information technology tools. Despite abundant evidence that technology could help lower costs and improve health care outcomes, providers have been slow to adopt. For most US providers the biggest obstacle has been poor return on investment. A small physician practice could face costs of over $30,000, yet that practice may see very little of the financial benefits. Instead, patients and insurers – either private or government-run Medicare and Medicaid - will benefit from fewer duplicative or unnecessary medical tests, reduced medical errors, and better care of chronic illnesses."

The automation of healthcare has to be a good thing so long as it is secure and user-focused. To arrive at a situation where the user, in this case a small physician practice, does not see a clear ROI clearly is wrong. In the UK we have similar healthcare initiatives that are conceptually sound but are poorly implemented. Whether the users are office workers, physicians and patients, IT solutions need to be developed with the user in mind. Thus avoiding the political conflict that tarnishes the initial vision.

Read Paul's complete post Healthcare IT: Saving Lives, Saving Money

Who Competes with IT?

In his CIO post Who are the IT Department's "competitors"? Chris Potts makes reference to a global survey that tried to pin down what differentiates successful IT organisations [within companies] from their competitors. Chris picks up on who the IT department's competitors might be. This I feel is a very interesting question. I go along with his points that the competitors include:

• external suppliers
• IT departments in other companies - used by the CFO to beat their IT function down on budget.

I would also add:

• The Finance function - often there is a political friction between the two departments
• The Marketing function - e-commerce and now social networking look set to move the axis of IT power out of the IT function.
• The IT industry - which is creating technologies that are likely over time to obviate the need for technologists in end-user organisations
• Anything else worthy of capital investment - The CEO needs to decide whether his dollar will yield more value lying in a savings account or would it be best to invest in the IT function. 

With a bit more thought I am sure the list could be extended.

Integration Matters

In his post IT Doesn’t Matter – Integration Does John Schmidt makes an interesting point in respect of Nick Carr's first book "Does IT Matter?", which caused shockwaves through the IT industry.  Mr Schmidt argues that even if IT becomes a commodity there will always be the issue of integration to attend to. It is not just a case of 'plug and go'. He focuses on business integration as opposed to systems integration, but his argument holds for both. Thus even if all hardware and software eventually become commoditised there will still be competitive advantage gained through one's ability to integrate disparate technologies together.

To some extent using Carr's book as a basis for argument is a little unfair as it was written for a previous biotechnological era (the post-dotcom nuclear winter). Though I admittedly am guilty of this as well in my new book. His book's value was not so much in the logic but in the fact that it gave the IT industry and user community a big slap in the face. As a result today's IT discussions are increasingly based around business value.

Schmidt may possibly be a technologist and this can see deeper into the issues highlighted. However as an ex technologist who is looking at trends in the marketplace, I see the whole area of system integration becoming a non-issue. Hence the death of the phrase system integrator in the description of what today are better known as IT service companies. Technologies and standards such as XML, Soap and middleware in general have taken the fun out of integration from a technologist's perspective.

The issue of business integration is less evolved and so Schmidt's perspective is very valid today and will be for a while. As we have seen, and will see, courtesy of the recent credit crunch, swathes of people will lose their livelihoods to be replaced by technology. As the ratio of people to technology changes the issue of business integration will go the same path as system integration.

Pleasing Google's Tech-Savvy Staff

The recent WSJ interview with Google's CIO Douglas Merrill is both likely to inspire and terrify most CIOs, particularly given that most Google employees are both users and technologists. Google would on the face of it have a very laissez-faire approach to IT. Rather than have a core IT strategy that determines what the staff can/cannot do, Mr Merrill is happy for individuals to pursue whatever technology takes their fancy. This sounds like a support nightmare, but Google gets around it by:
a - Trading the cost of the nightmare (support) against the creativity that might emerge
b - Investing in an IT infrastructure that in effect makes the working environment safe.

Thus employees feel less 'locked down' and more inclined to innovate.

This is a tricky balance to achieve and perhaps one needs Google's free cash to achieve it. However a message for less risk averse CIOs is that getting the core infrastructure right can provide an environment within the IT function that promotes innovation, rather than the usual boring 'IT as a tool for cost management'. And the message for the CEO is that the sooner your IT and user communities morph into one the sooner you are likely to play in the Google league.

(The WSJ article is also being discussed at Just Do I.T. and the WSJ technology blog)

Gaining a Seat at the Innovation Table

It was refreshing to read the Boston Consulting Group paper Gaining a Seat at the Innovation Table on the role IT has to play in business innovation.

The paper rightly highlights the role the business side has to play in this. The focus though is on what the IT function should be doing. I particularly like the nudge given to CIOs to get out there and support business process design.

Also the point that traditional IT leaders are unlikely to cut it on the innovation front is well made. I would like to see this elaborated on, as this for me is the critical issue in respect of the IT function delivering business value.