The Impact of IT on Hospitals

1. The Impact of IT on Hospitals Dr. Hsin-Ginn Hwang Graduate Institute of Information Management National Chung Cheng University mishgh@mis.ccu.edu.tw 0939-318-863

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

3. 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

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

5. 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?”

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

7. 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

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

9. 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

10. 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

11. 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

12. 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

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

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

15. 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)

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

17. Gorry and Scott Morton’s Framework of MIS • A framework synthesizing the work of Anthony and Simon is very appealing because it helps us classify a variety of systems (Gorry and Scott Moton, 1971)

18. Harold Leavitt’s Framework for IT Applications • An organization develops some internal structure so the people who work in the organization can perform their tasks • People undertake these tasks so the firm can accomplish its mission or purpose

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

20. Contemporary Framework for IT Applications • IT supports individuals, workgroups, organizations, and linkages among organizations • The changing technology enables the organization to develop applications to support all the tasks involved in managing the firm

21. Contemporary Framework for IT Applications • A focus on the organization as the most important component of the study of IT • The role of technology in supporting managerial tasks • The pervasive nature of technology in the organization

22. Decision Support, Executive IS, and Expert Systems • Decision Support Systems • Executive Information Systems • Expert Systems • Group Support Systems

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

24. Supporting Groups and Cooperative Work - Groupware • Groupware such as Lotus Notes can provide the coordination mechanism among individuals in different locations. • Groupware support individuals in different locations can share information on a distributed network.

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

26. Key Technology • Communications • Networking • Database

27. The Basics of Information Systems • Some Generic Types of Systems • Transactions Processing Systems • Decision-oriented Systems • Communications-oriented Systems

28. Transactions Processing Systems Workstation Input User Validate Update Output Report Database

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

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

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

32. 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.

33. 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

34. 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?

35. 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

36. 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 Strategic Planning Managerial Control Operational Control

37. 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

38. 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

39. Explicit Knowledge • Explicit knowledge is represented by facts. • Textbook, Manual, Document, …,etc.

40. Tacit Knowledge • Tacit knowledge is something we understand but have difficulty explaining. • Riding bicycle, cooking,…,etc.

41. Concepts of Decision Making • Decisions differ in a number of ways • These differences affect the formulation of alternatives and the choice among them • They also affect the design of IS support for decision activities

42. Decision Types • Four dimensions of decision: • Level of knowledge of outcomes • Level of programmability • Criteria for the decision • Level of decision impact

43. Knowledge of Outcomes • If the outcomes are known and the values of outcomes are certain • The making of decisions under risk, when only the probabilities of various outcomes are known • Decisions under uncertainty (outcomes known, but not the probabilities)

44. Programmed versus Nonprogrammed Decisons • Programmed decisions are those decisions that can be prespecified by a set of rules or decision procedures • Programmed decisions imply decision making under certainty because all outcomes must be known • Programmed decisions can be delegated to low levels in an organization or automated

45. Criteria for Decision Making • A model of decision making which tells the decision maker how to make a class of decisions is normative or prescriptive • Normative models have generally been developed by economists and management scientists, such as LP, Game theory, etc • The criteria for selecting among alternatives in the normative model is maximization or optimization of either utility or expected value

46. Criteria for Decision Making • A model which describes how decision makers actually make decisions is descriptive • Descriptive models attempt to explain actual behavior and therefore have been developed largely by behavioral scientists • Satisfaction is an alternative view of decision making which comes from the descriptive models

47. How Do Individuals Make Decisions • Herbert Simon (1965) suggests a series of descriptive stages for decision making to help understand the decision process • Intelligence • Design • Choice • Implementation

48. Intelligence • “Problem finding” is conceptually defined as finding a difference between existing situation and some desire state • The purpose of “problem formulation” is to clarify the problem, so that design and choice activities operate on the “right” problem

49. Design • The act of generating alternatives is creative, and creativity may be taught.

50. Choice • Decision maker selects one of the alternatives. • The criteria of choice is different among individuals or organizations.