The project has gone far over budget and over schedule. And yet in its final stage, we still face additional cost in new software licensing. In the mean time, we also need the resources in place to launch the new product after years of research and development. We do not have enough cash for both, so the decision here is whether to delay the launch of the new product, or choose to allocate the cash to the project. A solution was suggested by the lead developer that we could bypass the new software licensing cost by connecting to his company’s server.
It is only a temporary solution so we could have enough time to straighten out the cash flow issue. However the dilemma is that is it ethical to do so? If we follow his advice, what are the consequences of such action? Here are some possible courses of actions:
Follow the developer’s proposal: The immediate benefit is that it will allow time to solve the cash flow crisis.
However, it is violating the Code of Ethical Principals and Rules of Conduct of CGA Association. The first Rule of Conduct is Responsibilities to Society and according to CEPROC, as members of society, we have the responsibility to safeguard and advance interest of society. Accessing the software through the developer’s server is an unlawful activity under that rule. The cost saving in licensing will not be enough for the possible financial and reputation damages that it will bring if the activity was found out, and we could possibly face lawsuits from Microsoft.
That would put the company’s credibility at risk. We also set bad behaviour for our employees.
If we do not follow his proposal, we now face the following two alternatives:
Launch the product: The advantage of this choice is that the faster we introduce this product to the market, the more beneficial it will be for all the stakeholders involved such as: farmers, research and development team, and our company credibility. However, delaying the project may incur further cost in renewing old software licenses for the system. In the end, the total cost of the project might outweigh the benefits that it intended to bring. Any decision should follow the two criteria:
I would recommend not following the developer’s proposal as doing so would violate ethical rules of conducts. And the best option would be to launch the product instead of pouring more cash into the IT project. As launching the products would be more beneficial to the company as whole. We should also have to sit down and re-evaluate the IT project, to see where it went wrong, and then determine the appropriate action instead of just pouring more cash into it. If you need to discuss the issues further, please do not hesitate to contact me.
IT tool has become a double-edged sword to Peachtree. It is indispensible and yet the unreliability of it could cause catastrophic consequences. Facing the routine breakdowns, and the increase burden of supporting various legacy systems across all hospitals, the company must decide whether to replace with monoliths – enterprise software, or just pieces of it with SOA approach. The first would create mass standardization. And the latter would allow for selective standardization. Each system has its strengths and weaknesses.
How then could Peachtree decide? Criteria such as, selective standardization, reliability, timing, ease of implementation should be the basis for any selection. The final decision would then have to really take the different aspects of clinical culture of each hospital into account. Given the nature of healthcare mission and Peachtree’s long term business strategy, it is crucial to maintain some form of autonomy especially in the treatment of patients. The recommendation is to go with SOA method since it allows for selective standardization. And that would support business objectives.
Peachtree current IT system is barely functioning, it is having routine breakdowns. The reliability of the IT tools is in question. The results of such failures have been causing distress on staffs and threatening the quality of services provided. If the IT problems are not addressed soon, Peachtree’s reputation will be dragged down along with it and that damage will not be easily repaired. Peachtree current IT system is a de-centralized one. Each hospital has its own system that caters to its own special needs and purposes. The strengths of such system are that it will be able to respond to each individual hospital’s needs quickly thanks to the familiarity with the local business practices. Another gain is that it gives doctors some autonomy in decision makings. And this is quite suitable consider how the organization structure of Peachtree was made up (a network of hospitals.)
However, the weaknesses for such systems are that maintenance and support cost are high due to the lack of standardization. As we can see from Peachtree’s situation, the cost of maintenance is eating up a big chunk of the organization’s budget and it will be getting harder to support as the network grows. Therefore, the IT decisions tend to be reactive rather than strategic. This will result in less efficiency for the entire enterprise, thus not adding value to Peachtree as a whole. Peachtree is made of interdisciplinary hospitals.
Their strengths are that patients could have access to all kinds of treatment services. The advantages for such network are that diagnostic and treatment processes could be redesigned so that patients’ treatment journeys could be shortened, and patients’ care could be continued without disruption. Thus making support activities such as records keeping, lab results, pharmacy records synchronized to improve efficiency, and faster care could be provided through the co-operation among hospitals. Together with IT tools, Peachtree could have achieved success with such business model. However, its current IT system is weighing it down and preventing it from achieving the possible synergies.
The first criterion for any system is the ability to go after selective standardization. The company’s long term strategy is still focusing on preserving hospitals’ flexibility. The strength of Peachtree network is that patients could have access to different staff skilled in different medical background and training. Standardizing everything including the way doctors providing care to patients could really jeopardize the fundamental principles in health care mission. After all, doctors are different because of the ways they provide care.
Timing and reliability are the other two criteria that need to be addressed now. Current system functionality is near failure, which will directly interfere with Peachtree’s mandate of providing consistent and quality of care. Current system also is not working properly. It needs fixing now. The third criterion should be the ease of implementation; the new system should have the least disruption to current systems. Given the complicated organization structure at Peachtree, any changes made should be done gradually and not a complete cutover, otherwise it will bring upon a lot of resistance and cause a lot of disruption in current services.
The premise of enterprise system is to have standardization in the way business processes are conducted. Enterprise system will have a set of integrated software modules and a central data base. To use the enterprisem software, each hospital must change their old ways of doing things to the way that were built in the software. In other words, everything must follow protocols. As we can see in Peachtree’s situation, all of hospitals’ legacy systems will be replaced: every facility would use a single set of systems and applications; everything is unified and consistent. This will help increasing the efficiency of operation and provide faster information access for decision makings, along with the improvement in management of making decision.
The success and reliability of such system has been proven in other industry and also healthcare. The downside of ERP is that it doesn’t allow for selective standardization. Too much customization might compromise the main benefits of the system and the cost is also much higher. Moreover, Peachtree is also facing a much higher risk because of the scope of the changes. There is no doubt that centralized data will be beneficial to ancillary clinics, health records management, imaging clinics. However, standardizing patient care might not be achievable given the life and death situations of healthcare mission.
SOA is a set of self-contained modules of business service that could communicate to each other. The basis of SOA applied in Peachtree’s situation is that legacy systems that are still useful could be modified. Program codes could be written so that each hospital information system is grouped into modules that perform distinct services. These modules will then be able to communicate to one another. Because of this, business processes such as patients’ files, pharmacy records, care performance and patients’ outcomes could be centralized by sharing a single business service module. If it is implemented successfully, this method will be much cheaper in the long run than the whole system replacement such as ERP system. The advantage with SOA is that it allows for selective standardization, so the change will be taken in small incremental steps, thus it will be less risky to the whole enterprise. Therefore, less disruption will be created to the current system. This will allow more time to examine whether or not the system is meeting business needs, and provide more time for the company to re-assess strategies.
Another advantage is that SOA could be implemented right away, and that would suit Peachtree quite well consider the urgency of their problems. However, SOA method is quite new, so the efficiency of it has yet to be proven, resulted in the lack of track records. Therefore, becoming one of the first to implement such system could be risky. If SOA’s functionality is not working as intended, it could mean much more money will be wasted than the whole system replacement. Peachtree could then be then left with the problems that are far worse to solve than the initial ones.
Before selecting any information system, according to the case commentary by George C. Halvorson, Peachtree must determine: What is the overall plan of the information system of the organization as a whole? What are the organization’s business priorities and strategies? How could the new system meet those needs? Then the information needs of each hospital could be incorporated into that master plan. The planning process should involve representatives from different hospitals including senior management, users, and representatives from non-medical departments such as accounting and HR. Issues such as cost, time, risk, and scope of the project should be addressed in order to arrive at a unified decision that could benefit everyone.
Since Peachtree’s long term business strategy is allowing hospitals to have flexibility in the way they offer care and the different purposes of each hospital, the recommendation should be the SOA approach, due to the fact that it allows for selective standardization. Given the indigenous clinical culture that Peachtree has, independence in the way of offering care is greatly valued. Therefore, small scale changes are easier to be implemented and supported than whole scale change and mass standardization. According to Candace, the method could be implemented now on the areas of that need fixing first, and that could address the current crisis, and also limit the risk of functionality failure, making the projects more dependable. The small steps in implementation will also give Peachtree a lot of chances to re-assess priorities according to Randy Heffner in the case commentary.
It won’t meet a lot of resistance compare to the enterprise system, because it allows time for the hospitals to adapt to change and retain some of their identities. Randy Heffner also indicated in his commentary that SOA should be viewed as a methodology instead of a product. And that in terms of helping organization achieving their objectives, integration and flexibility of SOA method has been proven. The individual business service software is already aligning itself to the business’ needs; in a nutshell, the system is already meeting the business’ needs. The technology is only there to support the purpose. After all, the information system is there to support business strategies instead of the other way around.
Any changes to information system require co-operation among hospitals. Therefore, the immediate challenge is to obtain support of management for a system change from all hospitals. Successful of the project will not be achieved without management involvement and engagement. The planning process should involve key representatives from all departments across all facilities. Representatives from doctors, nurses, and other staff from across facilities should be solicited for input since each hospital has its own unique treatment practices. Then a proper plan with defined objectives and requirements should be developed for the new system.
The next action would be to identify IT issues such as which system software and hardware that need to be replaced or modified? With the implementation of SOA, are there enough skilled IT staff to handle it in house or should it be outsourced? Will the IT staff have enough expertise to support the new system once it is up and running? Or do they need to be re-trained? Once the business service modules have been developed, the question arises as how they will be governed and maintained? We should decide as to what components of the new system should be governed by a central support group? Or is it better to have within each hospital.
These kinds of questions and planning should be left to the IT department to handl. How do we ensure that new processes will be followed? Since given the difference in practices, it is very possible that the change will not be welcomed by staffs. The solution is to have new processes and standards communicated to all employees to ensure compliance, and make sure that people are ready for the change. Training and support should be offered to employees throughout the implementation process. Another thing to look at is to measure whether the SOA is operating as planned. How then quality should be measured? How do we measure the impact of such system on the care of patients? We could use tracking tools to measure things such as reducing wasted steps during the treatment process. Or we could track the reduced medical errors or the cut down in treatment time and trip to various hospitals.
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