Being Smart About Strategic Planning

strategicplanning“I’ve seen the dangers of not aligning strategic plans-you end up with technology that no one is ready for or even had an idea was going to be provided,” Dennis Sato says. “There has to be a process and framework involved to get all parts of the business involved with information technology.”

A comfortable fit

Sato’s presentation to Salem Hospital’s executives and board of directors focused on explaining how information technology fit into the broader goals of the organization as well as different departments.

He gave examples of how employees in different departments-from human resources to nursing to the hospital’s foundation-could use I.T. to improve their efficiency and coordinate their efforts across the enterprise.

The presentation was an eye-opener, says CEO and President Norm Gruber.

“Most I.T. initiatives are in left field and finance initiatives are in center field, and you never see how they can work together,” Gruber says. “It’s often hard to see that employees are not islands, that they actually are working together toward common goals. Dennis explained how information technology ties it all together.”

As a result, an I.T. steering committee comprising various executives and clinical staff was formed to ensure the information technology plan paralleled development of the hospital’s corporate strategic plan.

“I.T. cannot be an afterthought during the strategic planning process-it has to be woven into every planning discussion,” Sato says. “Sometimes it’s not, because it’s never been explained to executives how it ties all the pieces together. CIOs can lay the framework for aligning these I.T. and corporate strategic plans by connecting the dots.”

A seat at the table

To be successful at aligning strategic plans, though, CIOs need a chair at the table during the overall strategic planning process.

“CIOs must, absolutely must, be sitting next to other executives when their organization’s strategic plan is being created,” says Dave Gravender, vice president and CIO at Kaweah Delta Health Care District, Visalia, Calif.

“Hearing the conversations that go on during the planning process helps you align your thinking with that of other executives and the board of directors. It’s not enough to hear it second-hand-I’ve had to do that at times in my career and it makes it infinitely harder to align I.T. with the business goals.”

To ensure he has a spot at the table, Gravender formed an I.T. steering committee on which two members of the hospital’s five-person board of directors serve.

The move elevated the I.T. steering committee to a board-level committee, an important step to raise its profile. In addition, Gravender was given a spot on the executive team that frequently meets with the board.

“I used to just give an annual report, but now I am in on the discussions about where our business is going and what trends are affecting the direction of our strategic plan,” he says. “This has helped us react quickly to changes in our business and enabled me to shift I.T. resources to business lines that are growing and pull money back from ones that aren’t.”

Being able to quickly come up with solutions to business problems also enables CIOs to build up credibility with other executives, says Ronald Kloewer, CIO at Montgomery County Memorial Hospital, Red Oak, Iowa.

For example, the hospital’s executives were facing the problem of cost overruns in its emergency department. Montgomery County Memorial was bringing contract physicians to its ER to ease the overwhelming workload weighing on its own doctors. But contract physicians are expensive, and the hospital was having problems making ends meet.

Kloewer and his staff were able to come up with a low-cost solution in the form of coding automation applications. The software automates portions of the coding process and helps ensure physicians are properly coding care delivery. The applications helped to increase revenue in the emergency department by 23%, Kloewer says.

“Being in on strategic planning conversations helps you understand what the business problems are, and often you can find ‘quick hits’ where I.T. can automate or improve a process quickly and inexpensively,” Kloewer says. “Making a difference in the bottom line helps you build credibility-which comes in handy when you’re looking for support for I.T. initiatives that have a fuzzier return on investment.”

Just one step

But getting to the planning table is just one step in aligning I.T. and business strategic plans, CIOs say. A reporting and planning structure must be created to keep the plans attuned and ensure CIOs are moving forward with realistic I.T. initiatives.

To do so requires the creation of a big tent, under which all sectors of the organization are represented, says Eric Yablonka, vice president and CIO at University of Chicago Hospitals.

“Even after you have I.T. funding and established priorities, you want staff from all areas of the business to be engaged with the I.T. department as you go forward,” Yablonka says. “It’s ill-advised to think that a CIO is in the position to decide that an information technology project is more important in one area than in another. The leadership should be valuing all the legitimate needs of the organization and prioritizing.”

Yablonka has established an I.T. management council made up of administrators and clinicians to decide in what order the delivery system should tackle its various I.T. projects.

The council helps to align the business priorities with the demand for services across the organization. It is the “ground-level” group that decides which I.T. initiatives need to be tackled immediately and which projects can be put on a back burner.

“Everyone has to be involved in I.T. projects because the CIO and the I.T. department itself should not make decisions about resource allocations in a vacuum,” he says. “It’s not just about I.T.-that’s the idea behind this whole process.”

But creating a streamlined planning process is not as simple as forming a few committees, Yablonka warns. “It takes some time for people to understand the process,” he says. “There is not necessarily any right answer to what our priorities should be, but you have to resolve any disagreements and move forward. And the planning process can’t be overly cumbersome-you need good governance so leadership and other staff can make decisions based on good data.”

Can’t do it alone

And CIOs must ensure the process doesn’t become too cumbersome for themselves, says Tom Druby, vice president and CIO at Blue Cross of Northeastern Pennsylvania, Scranton.

Keeping I.T. and business plans aligned often is a task too big for one person, he says. To do so requires constant communication with executives and managers across an enterprise. CIOs cannot spend every waking hour attending meetings and keeping in touch with myriad departments-after all, they do have an I.T. department to run, he notes. “To keep in touch with the strategic plan, you have to be in touch with an awful lot of people.”

To keep all channels open, Druby has designated members of his 90-person staff to act as liaisons between I.T. and other departments and executives.

These liaisons, typically senior staff who report directly to Druby, are asked to form relationships with vice presidents and senior staff members in other divisions. They usually are technologically adept senior managers, but Druby also asks lower-level staffers who are particularly good at “customer relations” to act as liaisons.

Looking at the big picture

“You want to depend on staff members who understand the big picture of strategically aligning I.T. and business plans, not someone who only sees a small piece of it,” Druby says. But CIOs planning to use liaisons should put some thought into with whom they want to connect and how closely they need to communicate with that person or department, he adds.

“We maintain relationships with everyone, but you have to build relationships depending on your organization,” he says. “Being a payer organization, our I.T. department works very closely with our marketing and customer service departments, so we put a priority on staying in very close contact with them. A provider CIO, of course, might have different priorities, but he or she should decide what those priorities are and plan accordingly.”

Druby and his liaisons use a central project management office to coordinate and prioritize I.T. implementations.

The office tracks the progress of each I.T. initiative and also maintains a list of corporate “sponsors” and leaders for the projects. “The I.T. and business strategic plans are living documents-they change constantly. We decided we needed to have a central office to make sure we understood what was going on with each part of the plan.”

Having I.T. plans vetted through a centralized department helps ensure that one hand knows what the other is doing, CIOs say. And coordinating these efforts also helps to hone an I.T. plan’s focus on the overall corporate strategic plan.

Through the wringer

At Mayo Clinic in Rochester, Minn., the clinic’s mission statement has shaped the way I.T. has been incorporated into its strategic planning process, says Abdul Bengali, administrator of Mayo’s Foundation of Information Technology.

“We are committed to being patient-centric-that is the overriding goal of our organization,” he says.

As a result, a physician-led I.T. oversight committee has acted as the “steward” of the I.T. department and provided the oversight and prioritization.

“This is a process we have had in place for a long time, and it has kept the focus of our I.T. department on patient safety and point-of-care technology,” he says. “We in the I.T. department are here to provide the operational support.”

However, the physician-led oversight committee first must develop the I.T. strategic plan through a planning methodology to ensure it is aligned with Mayo’s overall business plan.

The clinic has a separate planning department that helps develop a plan to incorporate new initiatives into the organization’s clinical operations.

The methodology uses a template that identifies what type of service is being developed, where Mayo is and where it wants to be in terms of process development, and assesses external trends in the health care industry.

In the last part of the process, Mayo Clinic relies on industry associations and health care experts to identify trends-such as the move toward increasing patient safety-that could affect how and where it wants to spend its I.T. dollars.

“I think a lot of organizations develop good strategic I.T. plans-well, they all look good on paper, don’t they-but drop the ball when it comes to execution,” Bengali says. “I don’t mean execution in the sense of installing the software. I mean the execution of really connecting with the overall strategic plan, ensuring they have a properly balanced and prioritized strategy, integration with clinical and business operational processes, and sound and effective project management discipline. That’s where organizations fail.”

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