None of which she expected (Turner, 2003). This paper will discuss whether the decision to outsource IT makes sense and whether it would meet the Porter Value Chain Model.
Hoppszallern (2009) discusses the fact that according to her research savings for the average company through supply chain management that includes the process of outsourcing IT can be $50-100 million over the life of the project. In a clinical situation this includes such things as the business process areas of medical records, billing, revenue cycle, and supply chain. The process of outsourcing not only reduces cost for the business but also provides accountability from the CIO, provides a change agent that is not bogged down by day to day, and objectivity by lack of close involvement with the departments. It also provides a larger base of knowledge over IT software as well as hardware. However, there is also a down side. That includes the fact that the IT director is also not loyal to the business, he may be a poor cultural fit, and he is not a peer at the executive level. There is also a great chance that the outsourcing will end up abroad and this brings up Senator Turners largest complaint is that the business of the US does not belong abroad and available for misuse (Turner, 2003).
Many of the complaints from departments about outsourcing are related. For example, most department heads complain that it takes twice as long to fix a problem and that the person on the phone does not understand the needs of the department. Projects take longer. This brings up the question of real value and whether or not the lost value of time for the departments in project time outweighs the cost of keeping the IT department in house (Robbins, 2004). In this writers organization, all of the IT department is already outsourced and the complaints are much the same as documented in the articles read for this paper. This includes the length of time it takes to initiate and manage a project as well as getting someone to fix a problem along with many other issues. The majority of the department heads would say that it has not been worth it but the CFO says that it has definitely improved the bottom line.
Using Porters value chain management model in healthcare would give a path similar to what follows:
1. Data/ information technology
2. Information generation
4. Actionable customer plan
5. Program assessment/reassessment
The data comes in from
1. Medical claims data
2. Pharmacy data
3. Health risk appraisals
4. Laboratory values
5. Eligibility files
6. Utilization files
7. Operating systems and other external data resources.
Much of this data comes from various kinds of claim forms.
As we look at this first step in Porters value chain, we realize that there is information here that is certainly not information that we would ever want to be exposed to other places. This makes one wonder if the reduction in cost by outsourcing is worth the possibility of this information leaving the system. Then there is the issue of whether failure to transmit the information where it needs to go in a timely manner is possible and sudden changes in the data such as emergent lab changes, are they getting there timely. Who is aware of how important subtle changes are in the data Then there is the problem of how important data quality
Outsourcing of IT is a highly heated debate at this time, even reaching the legislation stage in some states. There are certainly some pros and cons to the move and how that move is made can make a considerable difference. As businesses in the US come up against a much more frozen bottom line, IT outsourcing becomes considered more often…
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2 pages (500 words)Essay
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