Peachtree Case Study Answers
Question 3
Executive Summary
Peachtree’s mission is to ensure a quality, consistent and continuity of care across the entire network of care facilities but to deliver all of this at the highest levels of efficiency, economy, and respect for patients and staff.
In order to be competitive in the health industry, Peachtree has obtained a number of varying health institutes via mergers. This leads to PH’s major IT infrastructure problems - the information systems of each acquired institutions are incompatible and disconnected with each other. The current system faces the issues of inefficiencies of the company processes and procedures, and the meantime, the instability increases and maintenance cost is high. CEO of PH Max Berndt is trying to …show more content…
find the right solution. He has an option to go with monolithic system that will provide consistency across PH’s facilities but may not give doctors enough flexibility or he can choose service-oriented architecture (SOA), a modular design that will allow PH to standardize incrementally and selectively but poses certain risks as a newer technology.
Evaluating pros and cons of both SOA and monolithic system, it is recommended PH to apply SOA because of low costs, easy to use, flexible and low time consuming.
Current Situation
Peachtree Healthcare (PH) is a network of eleven large and midsize institutions and has 4,000 employed and affiliated physicians who treated every imaginable injury and disease to one million patients range from new born to nonagenarian with all races, ethnicities, lifestyles and economic conditions; and manifested every imaginable injury and disease. In order to be competitive in the health industry, Peachtree has obtained a number of varying health institutes via mergers. This leads to PH’s major IT infrastructure problems - the information systems of each acquired institutions are incompatible and disconnected with each other.
Current Peachtree Healthcare Challenges:
Pressure to standardize processes/practices
Incompatible current technology with future goals
High maintenance costs for current IT system/Recent meltdown of clinical information system
Seeking competitive advantage
Conflicted support for IT-based innovation
Several institutions with unique doctor-oriented identities
IT Strength:
Each institution’s system fulfills its own needs.
The acquired institutions enhanced the PH’s IT capacity; they brought in IT experts and technologies.
PH’s management are forward thinkers.
CEO Max enjoyed a close, positive working relationship with CIO Candace.
IT Weakness:
Lack of standards in IT infrastructure.
Inability for a continuation of care to flow between the various medical facilities since IT systems of each facilities are incompatible and disconnected
Instability of the system itself has the potential of disrupting the care of its patients.
The system is not economical because of the wasted energy and time on the current system.
Like “The African Queen”, trying to keep the blasted engine running on the boat, so much of our energy and budget goes into just treading water. And the more we grow, the worse it gets.” CEO Max was convinced that implementing a system urgently needed to be done.
Criteria
Effectiveness and reliability:
Measurement method: whether the system runs stably and smoothly; whether it is able to provide business with the right information, in the right form, at the right time, and in the right place. Effectiveness is essential since the goal of IT system is to make things done. Peachtree’s mission is to ensure a quality, consistent and continuity of care across the entire network of care facilities but to deliver all of this at the highest levels of efficiency, economy, and respect for patients and staff. This goal cannot be achieved if IT system cannot run effectively. Flexibility
Measurement method: whether the system could meet the needs of different institutions; and whether it could fulfill the needs if situation changes. PH has 11 institutions and each of them has their own needs. The system must fulfill the needs of them all.
Reusability:
Measurement method: whether the developed system could be used for other services. The reusability of the software will reduce the need of maintenance which means the save both in time and cost.
Consistence and interoperability
Measurement method: a standardized infrastructure for all institutions.
Although PH has 11 institutions, it is still a same company; thus a standardized infrastructure will enhance the connection with each other and make the communication and information exchange among institutions easy and fast.
Efficiency: measurement method - make things done with minimum time and cost.
Total cost of whole life circle
Software may be intangible, but it is certainly costly to develop new code, and even more costly to maintain it once it has been created.
Time used to achieve the goal: the longer the time used, the more cost will be spent.
Risk: measurement method - degree of uncertainty. Due to no industry record, the risk must be carefully considered.
Alternatives and Recommendation
Strategy to select:
Peachtree’s mission is to ensure a quality, consistent and continuity of care across the entire network of care facilities but to deliver all of this at the highest levels of efficiency, economy, and respect for patients and staff. The IT Strategy must be consistence with this objective. An end to end standardization with a clear conscience is not suitable for health care since different institutions have their own unique doctor-oriented identities. So the PH’s best long term bet is cautious approaching to standardization (selective standardization) and preserving the hospitals’ flexibility.
The following alternatives are outlined in this analysis of Peachtree:
a. Monoliths: complete unification of all healthcare facilities into a single institution with multiple campuses by standardizing the entire business. This however is tested and will cost approximately $500 Billion - $1 Trillion – potential to increase 3-5 times …show more content…
cost.
Strengths:
Gets the job done, effectiveness and reliable
Creates new consistent infrastructure, highly standardized.
Single set of systems that unifies everything
Peachtree Healthcare can become a single institution with multiple sites
Less uncertainty: this method has been used by other health institutions; there are records track, so the risk is low.
Weakness:
Cost is high, 500 million – a billion dollars
Difficult to estimate true cost, potential to increase 3-5 times cost.
Require redesign of every business process
5-7 years is needed.
Flexibility is low: highly standardization will decrease flexibility. There are several institutions with unique doctor-oriented identities and it will be difficult to fulfill each institution’s special needs.
b. Incremental implementation of Service-oriented Architecture (SOA): Flexible with selective standardization but implemented in stages to decrease the risk of failure. There is a potential deal with the vendor but that is because of it is new to the industry and unpredictable.
Strengths:
System will provide quickness and efficiency
System will provide flexibility to go after selective standardization and improved ability to change; new product development enabled.
Can attempt on a limited scale/move slowly to reduce risk
Vendor willing to be flexible on cost due to immature SOA market
Reusability is high: the software developed for certain service could be reused for other services; thus, thus will decrease of maintenance cost.
Weakness:
A couple of years from being ready
Immature SOA market/New to market/no industry track record
Risk of becoming victim of ongoing learning curve
No one else is aggressively adopting SOA
Uncertainty: it is difficult to tell how long time it would take and how much money it would cost.
And whether it could work for the health industry. The risk is high.
Recommendation:
Evaluating pros and cons of both SOA and monolithic system, SOA seems less expensive in the long run than the monolithic system. It is recommended PH to apply SOA because of low costs, easy to use, flexible and low time consuming.
Risk Management Plan
If PH decides to adopt the SOA to redesign its IT system, it will involve the risk. Moreover, the risk will be high to PH since there is no industry track record. PH has to take actions and plan to reduce the risk.
The risk from medical respective
a. The SOA is lack of industry record. Nobody could tell whether SOA works for health care business; and there is uncertainty on the time used, cost spent, etc. To reduce this risk, PH should reference the successful SOA systems which have been used in other industry. It should provide some experience to reduce the risk.
b. The unique doctor-oriented identities require that information system to be highly flexible. SOA meets this requirement since it is services oriented. But this will reduce the consistence and interoperability; therefore it will decrease the information exchange from different parties. To reduce this risk, PH should take the approach of selective standardization. It will provide the flexibility which the health care needs and standardize the business
gradually.
The risk from business perspective:
a. Improper identification and implementation of business services
SOA is service oriented architecture. If the business services cannot be properly identified and implemented, it will lead to fail of the system implementation. To reduce this risk, PH should take below actions:
Set up SOA governance to review process at service implementation level.
SOA principles and guidelines provide the necessary framework for service implementation.
b. Business process inefficiency due to quality of service expectation mismatch. This is really an issue for PH since it has total eleven institutions. Each of them has their own services and procedures. Their service expectation cannot totally match each other. To reduce this risk, PH should take below actions:
Enhance the communication between different parties.
Set up a roadmap to model and test the business process quality of service.
Set up SOA governance to control the quality of service related business process.
The risk from IT perspective:
a. An improper implementation due to IT inflexibility.
SOA, being a new way of looking at the things, requires the flexibility to revisit policies that are legacies of a different environment. Compromises made to accommodate inflexible policy can cause SOA to be abandoned midway. To reduce this risk, PH should take below actions:
Set up mandatory SOA principles and guidelines; and clearly identify it.
Management must put effort to push the mandatory SOA principles and guidelines; and align them with other policies.
SOA governance provides guidelines to handle conflicts with other IT policies.
b. Improper choice of SOA vendor
SOA is a new technology; and the SOA platforms are still lack of standards. To reduce the risk of selecting an improper SOA platform, the SOA principles and guidelines must provide enough/appropriate criteria for product selection. And in the meantime, the CIO and its IT team have to obtain skills and knowledge of SOA selection.
c. Inefficient product integration
SOA is service based architecture; thus the integration of each service application will become an issue in the later stage. To reduce these risks, PH has to enhance the effective communication across partners; especially PH has total eleven institutions.
d. SOA is new to PH’s IT team; there is risk of becoming victim of ongoing learning curve. PH’s CIO and its IT team have to enhance their SOA skill and knowledge as soon as possible. The better way to solve this problem is taking some training class from their SOA vendor.
SOA is a new technology for information system implementation, especially for health care business. PH’s management should provide effective support to enhance the co-operation between their IT team and other department and different institution. They should identify the risks, analyze them and set a plan how to track and control risks. IT team should align their objectives to PH’s mission. It means the SOA based IT system could add value to the business by providing effective and flexible service to the whole oraganization; and reduce the cost buy providing solutions with quickness and efficiency.
Executive Summary
Peachtree’s mission is to ensure a quality, consistent and continuity of care across the entire network of care facilities but to deliver all of this at the highest levels of efficiency, economy, and respect for patients and staff.
In order to be competitive in the health industry, Peachtree has obtained a number of varying health institutes via mergers. This leads to PH’s major IT infrastructure problems - the information systems of each acquired institutions are incompatible and disconnected with each other. The current system faces the issues of inefficiencies of the company processes and procedures, and the meantime, the instability increases and maintenance cost is high. CEO of PH Max Berndt is trying to …show more content…
find the right solution. He has an option to go with monolithic system that will provide consistency across PH’s facilities but may not give doctors enough flexibility or he can choose service-oriented architecture (SOA), a modular design that will allow PH to standardize incrementally and selectively but poses certain risks as a newer technology.
Evaluating pros and cons of both SOA and monolithic system, it is recommended PH to apply SOA because of low costs, easy to use, flexible and low time consuming.
Current Situation
Peachtree Healthcare (PH) is a network of eleven large and midsize institutions and has 4,000 employed and affiliated physicians who treated every imaginable injury and disease to one million patients range from new born to nonagenarian with all races, ethnicities, lifestyles and economic conditions; and manifested every imaginable injury and disease. In order to be competitive in the health industry, Peachtree has obtained a number of varying health institutes via mergers. This leads to PH’s major IT infrastructure problems - the information systems of each acquired institutions are incompatible and disconnected with each other.
Current Peachtree Healthcare Challenges:
Pressure to standardize processes/practices
Incompatible current technology with future goals
High maintenance costs for current IT system/Recent meltdown of clinical information system
Seeking competitive advantage
Conflicted support for IT-based innovation
Several institutions with unique doctor-oriented identities
IT Strength:
Each institution’s system fulfills its own needs.
The acquired institutions enhanced the PH’s IT capacity; they brought in IT experts and technologies.
PH’s management are forward thinkers.
CEO Max enjoyed a close, positive working relationship with CIO Candace.
IT Weakness:
Lack of standards in IT infrastructure.
Inability for a continuation of care to flow between the various medical facilities since IT systems of each facilities are incompatible and disconnected
Instability of the system itself has the potential of disrupting the care of its patients.
The system is not economical because of the wasted energy and time on the current system.
Like “The African Queen”, trying to keep the blasted engine running on the boat, so much of our energy and budget goes into just treading water. And the more we grow, the worse it gets.” CEO Max was convinced that implementing a system urgently needed to be done.
Criteria
Effectiveness and reliability:
Measurement method: whether the system runs stably and smoothly; whether it is able to provide business with the right information, in the right form, at the right time, and in the right place. Effectiveness is essential since the goal of IT system is to make things done. Peachtree’s mission is to ensure a quality, consistent and continuity of care across the entire network of care facilities but to deliver all of this at the highest levels of efficiency, economy, and respect for patients and staff. This goal cannot be achieved if IT system cannot run effectively. Flexibility
Measurement method: whether the system could meet the needs of different institutions; and whether it could fulfill the needs if situation changes. PH has 11 institutions and each of them has their own needs. The system must fulfill the needs of them all.
Reusability:
Measurement method: whether the developed system could be used for other services. The reusability of the software will reduce the need of maintenance which means the save both in time and cost.
Consistence and interoperability
Measurement method: a standardized infrastructure for all institutions.
Although PH has 11 institutions, it is still a same company; thus a standardized infrastructure will enhance the connection with each other and make the communication and information exchange among institutions easy and fast.
Efficiency: measurement method - make things done with minimum time and cost.
Total cost of whole life circle
Software may be intangible, but it is certainly costly to develop new code, and even more costly to maintain it once it has been created.
Time used to achieve the goal: the longer the time used, the more cost will be spent.
Risk: measurement method - degree of uncertainty. Due to no industry record, the risk must be carefully considered.
Alternatives and Recommendation
Strategy to select:
Peachtree’s mission is to ensure a quality, consistent and continuity of care across the entire network of care facilities but to deliver all of this at the highest levels of efficiency, economy, and respect for patients and staff. The IT Strategy must be consistence with this objective. An end to end standardization with a clear conscience is not suitable for health care since different institutions have their own unique doctor-oriented identities. So the PH’s best long term bet is cautious approaching to standardization (selective standardization) and preserving the hospitals’ flexibility.
The following alternatives are outlined in this analysis of Peachtree:
a. Monoliths: complete unification of all healthcare facilities into a single institution with multiple campuses by standardizing the entire business. This however is tested and will cost approximately $500 Billion - $1 Trillion – potential to increase 3-5 times …show more content…
cost.
Strengths:
Gets the job done, effectiveness and reliable
Creates new consistent infrastructure, highly standardized.
Single set of systems that unifies everything
Peachtree Healthcare can become a single institution with multiple sites
Less uncertainty: this method has been used by other health institutions; there are records track, so the risk is low.
Weakness:
Cost is high, 500 million – a billion dollars
Difficult to estimate true cost, potential to increase 3-5 times cost.
Require redesign of every business process
5-7 years is needed.
Flexibility is low: highly standardization will decrease flexibility. There are several institutions with unique doctor-oriented identities and it will be difficult to fulfill each institution’s special needs.
b. Incremental implementation of Service-oriented Architecture (SOA): Flexible with selective standardization but implemented in stages to decrease the risk of failure. There is a potential deal with the vendor but that is because of it is new to the industry and unpredictable.
Strengths:
System will provide quickness and efficiency
System will provide flexibility to go after selective standardization and improved ability to change; new product development enabled.
Can attempt on a limited scale/move slowly to reduce risk
Vendor willing to be flexible on cost due to immature SOA market
Reusability is high: the software developed for certain service could be reused for other services; thus, thus will decrease of maintenance cost.
Weakness:
A couple of years from being ready
Immature SOA market/New to market/no industry track record
Risk of becoming victim of ongoing learning curve
No one else is aggressively adopting SOA
Uncertainty: it is difficult to tell how long time it would take and how much money it would cost.
And whether it could work for the health industry. The risk is high.
Recommendation:
Evaluating pros and cons of both SOA and monolithic system, SOA seems less expensive in the long run than the monolithic system. It is recommended PH to apply SOA because of low costs, easy to use, flexible and low time consuming.
Risk Management Plan
If PH decides to adopt the SOA to redesign its IT system, it will involve the risk. Moreover, the risk will be high to PH since there is no industry track record. PH has to take actions and plan to reduce the risk.
The risk from medical respective
a. The SOA is lack of industry record. Nobody could tell whether SOA works for health care business; and there is uncertainty on the time used, cost spent, etc. To reduce this risk, PH should reference the successful SOA systems which have been used in other industry. It should provide some experience to reduce the risk.
b. The unique doctor-oriented identities require that information system to be highly flexible. SOA meets this requirement since it is services oriented. But this will reduce the consistence and interoperability; therefore it will decrease the information exchange from different parties. To reduce this risk, PH should take the approach of selective standardization. It will provide the flexibility which the health care needs and standardize the business
gradually.
The risk from business perspective:
a. Improper identification and implementation of business services
SOA is service oriented architecture. If the business services cannot be properly identified and implemented, it will lead to fail of the system implementation. To reduce this risk, PH should take below actions:
Set up SOA governance to review process at service implementation level.
SOA principles and guidelines provide the necessary framework for service implementation.
b. Business process inefficiency due to quality of service expectation mismatch. This is really an issue for PH since it has total eleven institutions. Each of them has their own services and procedures. Their service expectation cannot totally match each other. To reduce this risk, PH should take below actions:
Enhance the communication between different parties.
Set up a roadmap to model and test the business process quality of service.
Set up SOA governance to control the quality of service related business process.
The risk from IT perspective:
a. An improper implementation due to IT inflexibility.
SOA, being a new way of looking at the things, requires the flexibility to revisit policies that are legacies of a different environment. Compromises made to accommodate inflexible policy can cause SOA to be abandoned midway. To reduce this risk, PH should take below actions:
Set up mandatory SOA principles and guidelines; and clearly identify it.
Management must put effort to push the mandatory SOA principles and guidelines; and align them with other policies.
SOA governance provides guidelines to handle conflicts with other IT policies.
b. Improper choice of SOA vendor
SOA is a new technology; and the SOA platforms are still lack of standards. To reduce the risk of selecting an improper SOA platform, the SOA principles and guidelines must provide enough/appropriate criteria for product selection. And in the meantime, the CIO and its IT team have to obtain skills and knowledge of SOA selection.
c. Inefficient product integration
SOA is service based architecture; thus the integration of each service application will become an issue in the later stage. To reduce these risks, PH has to enhance the effective communication across partners; especially PH has total eleven institutions.
d. SOA is new to PH’s IT team; there is risk of becoming victim of ongoing learning curve. PH’s CIO and its IT team have to enhance their SOA skill and knowledge as soon as possible. The better way to solve this problem is taking some training class from their SOA vendor.
SOA is a new technology for information system implementation, especially for health care business. PH’s management should provide effective support to enhance the co-operation between their IT team and other department and different institution. They should identify the risks, analyze them and set a plan how to track and control risks. IT team should align their objectives to PH’s mission. It means the SOA based IT system could add value to the business by providing effective and flexible service to the whole oraganization; and reduce the cost buy providing solutions with quickness and efficiency.