IT Governance and Decision Rights

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IT Governance and Decision Rights

• HSPM J713
• Sept. 22, 2008

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GovernanceDecision rights

• General issues in the theory and practice of
  management
• much discussion and even some debate.
• Applied here to IT management
• (Book says IM/IT, which means information
  management/information technology)

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An integrated governance modelTopics

• Background of governance and planning
• Purpose of planning
• Importance of system integration
• Organizing IT strategic planning
• Systems theory introduced
• Management control and decision support theory
  introduced

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Background of governance and planning in IT

• IT systems evolved piecemeal
• Individual data systems for individual units of
  the enterprise

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Piecemeal

• 14th century Middle English pecemeale
• Piece is related to the French word petit,
  meaning small.
• Meal means by a fixed measure (from Old English
  -mælum, at a time, from dative pl. of mæl,
  appointed time)
• answers.com

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Problems of piecemeal development

• Data entered repetitively
• Data duplicated
• Duplicates may not match
• Information hard to retrieve except for the
  original purpose for which it was stored

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Integration of systems

• Strategic planning
• Clinical decision support
• Sharing data among departments, among
  facilities, and among enterprises

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(Integrated) System

• Functional
• Scalable
• Flexible
• What do those mean?

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Governance

• How things are controlled (Im trying to think of
  a word to use instead of governed.)
• Centralized vs. decentralized decisions
• Differentiated from contingency analysis
• Why and how decisions are made in an
  organization ?
• What is a contingency?

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5 domains of governance

• Quoted from study
• Strategic alignment
• Risk management
• Resource management
• Performance management
• Value delivery

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IT priorities

• Reducing medical errors
• Establishing electronic medical records
• These are not of the same character

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Components of Strategic Governance

• 1 of 5 Develop a Consistent IT Strategy
• Apply a plan across operating units
• Plan was new idea in mid-1990s. Generally
  implemented now.
• 1993 was first web browser

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Components of Strategic Governance

• 2 of 5 Align IT Planning with Organizational
  Planning. CIO and CEO must ask together
• What do we do?
• Whom to or for?
• Where?
• When?
• Why?
• How?

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Components of Strategic Governance

• 3 of 5 Develop IT Infrastructure, Architecture,
  and Policies
• Infrastructure
• Hardware (architecture)
• Network
• Degree of centralization/decentralization
• Software to support network

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4 technologies in current use

• Networks (high-speed)
• Intranets
• Wireless
• Client/server systems
• Chapter 6 explains

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Components of Strategic Governance

• 3 of 5 Develop IT Infrastructure, Architecture,
  and Policies
• Example of policy Data standardization
• Standard ways to represent data, such as dates.
• So all you data systems can share dates, for
  example.
• National standards organizations working on
  uniform ways to represent all health care-related
  data
• Medicare/Medicaid standards tend to dominate
• HIPAA-mandated standards

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HITSP

• Healthcare Information Technology Standards Panel
• Developing standards, under contract with US DHHS

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Hardware and Software Standards

• Uniformity of hardware and software
• Compatibility
• Ease of maintenance
• Site licenses often cheaper per seat the more you
  buy
• Control inappropriate use
• Such as people installing copied software

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Components of Strategic Governance

• 4 of 5 Set IT Project Priorities and Oversee
  Investments
• Purchase what fits with the plan

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Components of Strategic Governance

• 5 of 5 Be able to assess ITs contribution
• Accountability of IT to the organization
• Value that can be demonstrated
• Financial
• Costs decreased
• Revenue increased
• More productivity which means more revenue
  relative to cost?

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Components of Strategic Governance

• 5 of 5 Be able to assess ITs contribution
• Accountability of IT to the organization
• Value that can be demonstrated
• Clinical
• Adherence to standards
• Better outcomes
• Organizational
• Stakeholder whats that? satisfaction
• Risk reduction

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Components of Strategic Governance

• 5 of 5 Be able to assess ITs contribution
• Accountability of IT to the organization
• Value that can be demonstrated
• Getting away from reliance on anecdote,
  inference, and opinion quote

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Organizing the planning effort

• Board of Trustees
• Chief Executive Officer
• Info Sys Steering Committee
• Subcommittees
• New and replacement systems
• Infrastructure specifications
• Capital and operating budgeting

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Organizing the planning effort

• Board of Trustees
• Gives responsibility to the CEO
• Chief Executive Officer
• Organizes the committees
• Info Sys Steering Committee
• Does the planning
• Subcommittees
• New and replacement systems
• Infrastructure specifications
• Capital and operating budgeting

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Organizing the planning effort

• Outside consultants
• Often needed for technical expertise
• Choose carefully
• Independent of vendors, no conflict of interest
• Personality
• Resource for planning. Your inside people should
  do the planning.

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Organizing the planning effort

• Serving on steering committee or subcommittee
  takes time
• Should be part of job involves Human Resources
• CIO should chair the steering committee

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What should be in the IT plan

• 1. Organizations goals and objectives for the
  planning period (typically 3-5 years)
• E.g. if reducing medical errors is a goal, that
  should be stated at the top.
• E.g. if acquiring or creating more operations is
  a goal, that should be stated at the top
• Because these have implications for what IT must
  do

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What should be in the IT plan

• 2. ITs goals and objectives for the planning
  period
• Should flow from the organizational goals
• Specifics. For example
• BADdly stated GOAL improve the quality of care
  and increase efficiency
• Well-stated GOAL all records from the patient
  index file should be available online to our
  physicians

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By the way

• Whats the difference between a goal and an
  objective?

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What should be in the IT plan

• 3. ITs priorities
• Which goals should be addressed first
• This has to be done with an eye to methods and
  costs. Even so, that formal analysis comes later
  after the plan so far is reviewed by the CEO.

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What should be in the IT plan

• 4. Systems architecture and infrastructure
• Centralized vs. decentralized

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Arguments for centralization

• Less variability easier maintenance?
• Better security
• Less work
• More flexible
• Less costly to invest buy in bulk
• Less costly to operate because less variable?
• More end-user satisfaction
• Better assures alignment with organizational
  needs

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Arguments for decentralization

• More end-user satisfaction, because users
  control it
• Less costly because users support it
• More innovation
• Local flexibility
• Fewer delays from overburdening centralized
  programmers and support personnel

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What should be in the IT plan

• 4. Systems architecture and infrastructure
• Network architecture
• Mainframe
• Client/server
• File server
• Distributed
• How applications are linked
• How data will be stored and backed up
• Data takes many forms, including pictures as well
  as words and numbers

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What should be in the IT plan

• 5. Software development plan
• Old days In-house programmers developed
  applications
• Nowadays Buy applications from commercial
  vendors
• Which makes sense if data is becoming more
  uniform and requirements for use are becoming
  more uniform
• Applications service provider
• The application runs on their computer, not yours.

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What should be in the IT plan

• 6. Management and staffing plan
• Technical staff
• Who
• Where (relates to centralization-decentralization)
  
• 7. Resources required
• Capital and operating budgets

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Review and Approval

• Formal review and revision cycle before plan
  implemented
• Annual reviews of progress relative to goals and
  objectives

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End-User Computing

• Allow end-runs by departments whose needs arent
  in the plan?
• Departmental software purchases
• Improvised programs by computer-savvy users
• How isolated is the system?
• Enforce data compatibility

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Strategic Information Systems Planning for IDSs

• Integrated data system IDS?
• Vertically integrated organizations
• Patients progress through or get treatment from
  clinics, surgery centers, acute care hospitals,
  substance abuse centers, nursing facilities
• The information system must meet the needs of
  each part and coordinate their data needs

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Strategic Information Systems Planning for IDSs

• Provide comparable financial data for management
• Standardized coding of data across units
• Or else conversion methods needed
• Bringing in new units after merger means
  conversion tasks
• Centralization data warehouses

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Systems theory

• Systems characteristics
• Unity
• Complexity
• Internal hierarchy
• Stability and equilibrium ?
• Deterministic or probabilistic

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Simplest system
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System with feedback
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Cybernetic system

• Input, process, output
• Sensor measures output
• Monitor takes info from sensor, send signals to
  control unit
• Control unit affects process
• Show page 84.

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Summary

• ITs governance must fit with organizations
  goals
• IT plan, by enterprise-wide steering committee
• System integration essential
• The plan should develop policies
• Systems theory can help organize thinking