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Weekly UpdatesEXECUTIVE SUMMARY
Healthcare spending will exceed $4 trillion by 2017, a trend that is leading executives to implement information technology (IT) systems to contain these rising costs. Studies show that numerous factors determine the outcome and net benefits of IT in healthcare. However, what happens when a newly implemented IT system results in negative outcomes? We explore this question by examining a newly implemented IT system in a large hospital that was yielding none of the benefits for which its designers had hoped. Using an expanded set of analytic lenses, our in-depth study found that political issues were a major stumbling block to the implementation of this IT system, as the interests of IT managers were different from those of the system's users. In addition, cultural values among these stakeholders were not aligned. The new IT system carried very different meanings for these two key groups.
These political and cultural issues, which reflect a broader set of factors than is commonly applied in IT or in management, led to specific recommendations designed to improve the system's viability and benefits. In a follow-up analysis we found that these alternative lenses helped increase the intended usage of the IT system by 16 percent in the first year, yielding a 20 percent improvement in performance. By better understanding the cultural and political significance of IT implementation, managers may thus improve the effectiveness of new information technologies for containing costs in hospitals.
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According to one recent report, total healthcare spending is expected to increase nearly 7 percent per year over the next decade, reaching $4.3 trillion in 2017--fully 20 percent of the U.S. gross domestic product (NCHC 2009). Beyond the national and international implications of these enormous escalations in healthcare expenditures (Davis 2008), hospital administrators are exploring local solutions to contain costs. Information technology (IT) systems are increasingly seen as a means for containing hospital administrative costs (Bhattacherjee et al. 2007; Ovretveit et al. 2007) and improving clinical processes (Kazley and Ozcan 2007) such as patient safety and quality of care (Andre et al. 2008; Menachemi et al. 2006). Indeed, the long-term value of IT investments in healthcare was confirmed in a recent large-sample research study (Menachemi et al. 2007), which found that the presence of IT applications was positively related to operations performance and return-on-investment (ROI) measures in more than 80 acute care hospitals in Florida.
At the same time, a companion study found that not all IT applications improve hospital performance, nor do they improve performance equally (Bhattacherjee et al. 2007). Specifically, the researchers found that clinical applications--those directly involved in healthcare delivery--did improve the operational performance of acute care hospitals. However, neither administrative applications nor strategic applications gained any advantage through IT implementation for the organizations studied. In their discussion of this result, they suggest, "The performance impact of systems that merely automate paper-based processes appears to be lower ... than those systems that transform entire processes; hence the nonsignificance of administrative healthcare information systems" (Bhattacherjee et al. 2007, 11).
A key challenge highlighted by this conclusion is the wide disparity between the presence of a healthcare IT system and its actual usage by employees. The earlier-mentioned studies acknowledge their inability to measure whether these systems are being used. However, researchers have long shown that usage should be a key determinant of the performance of an IT system (DeLone and McLean 1992). From this perspective, the question becomes, how do managers get employees to use the administrative and strategic IT systems available to them?
One essential success factor seems to be how technology implementation is managed (Thielst 2007b); that is, is the new technology implemented in a thoughtful and interdependent way? Other success factors that determine the benefits of an IT system include the quality of the software system, individuals' intent to use it, and satisfaction from use (Andre et al. 2008; DeLone and McLean 2003). These are strategic factors that should lead to improved performance. Few studies have shown strong performance benefits from administrative IT systems in healthcare; the industry is one of the slowest adopters of IT compared with other industries (Dorenfest 2000). Our study suggests that improving performance outcomes requires going beyond a strategic design framework to include the political and cultural reasons employees do not use new IT systems in hospital environments. Like the interactive sociotechnical analysis model developed by Harrison, Koppel, and Bar-Lev (2007), our view focuses on psychosocial issues that undercut the successful implementation of administrative IT systems (see also Barkil, Pare, and Sicotte 2008; Juciute 2009).
To explore this idea, we performed an in-depth analysis on the implementation of an administrative IT system in a large teaching hospital in New England. We were able to identify a series of political and cultural problems in the implementation process--problems that go beyond the strategic issues of ROI and efficiency that are commonly studied by researchers and most visible to department managers. By expanding our analysis of the IT initiative to include all three lenses--strategic, political, and cultural--we found a broader group of factors for success, which ultimately did improve IT implementation in the hospital studied.
[FIGURE 1A OMITTED]
IMPLEMENTING AND EXPLAINING IT USAGE
IT Implementation from a Strategic Lens
Perhaps the best-known model for explaining IT usage was developed by DeLone and McLean (1992, 2003), shown in Figure 1a and 1b, who identify a set of factors that (should) lead to the successful implementation of IT systems.
Their model posits that (1) system quality, (2) information quality, and (3) IT support available for users are the factors that directly influence the intent to use and the actual use of the system, as well as the satisfaction of users. Together these intermediate factors lead to "net benefits" of the system.
This explanation sees information technology as a strategic resource that increases a firm's competitive advantage, primarily through cost containment and operational efficiency (Ovretveit et al. 2007; Barney 2001). Strategy, design, and performance are inextricably linked in these approaches, creating a gestalt-called the "strategic lens" by Ancona and colleagues (2005)--through which studies of IT implementations are generally analyzed (Bharadwai 2000; Sauer and Willcocks 2003). In fact, every definition of success in recent studies by Menachemi and colleagues (2006) and Bhattacherjee and colleagues (2007) presents IT implementations in these strategic terms--that is, as a competitive advantage that improves operational performance.
According to the strategic lens, effectiveness occurs through the design of linking mechanisms and alignment mechanisms. Linking mechanisms ensure that information and other resources "flow effectively and efficiently" between key activities and groups (Ancona et al. 2005, M2, 15). Alignment mechanisms ensure that the units and individuals assigned certain tasks "have the resources and motivation to carry them out effectively" (Ancona et al. 2005, M2, 23). Thus, a competent strategic analysis would begin by exploring the level of effectiveness of the linking and alignment mechanisms in the IT design.
IT Implementation Through New Lenses: Political and Cultural Issues
As noted above, this focus on operational effectiveness leaves out two additional issues that have a significant influence on employees (Ancona et al. 2005). First, the political lens explains organization behavior in terms of the distribution and control of resources, noting that the control of critical resources may confer important benefits to some individuals over others. These valuable resources will only be shared when stakeholders share the same interests (Ancona et al. 2005, M2, 40-41). Thus, a good political analysis will start by identifying stakeholder interests. A divergence in interests usually results in a divergence in the expectations of managers versus the actual behavior of employees.
The cultural lens, in turn, focuses on the meaning of organizational and managerial actions. These, usually tacit, meanings get expressed through cultural symbols, which provide a tangible representation of the beliefs and values that permeate the organization. For example, the decision to implement a new IT system symbolizes an organization's belief that new technology is the best way to improve the organization. According to culture researchers (e.g., Schein 1985) the influence of a new symbol, whether a new logo or a new IT system, is in large part determined by how that symbol's meanings are made explicit and shared throughout the organization. When shared meanings about an initiative are lacking, the initiative's adoption is likely to be limited.
In sum, IT implementation has generally been guided by the strategic lens, which focuses on design mechanisms that can increase the operational performance of a new IT system. However, this lens on its own has not yielded consistent improvements, especially in the implementation of administrative and strategic IT systems (Bhattacherjee et al. 2007). We complement that approach by including the political and cultural lenses in our analysis to enhance understanding of the factors and drivers of IT implementation success.
RESEARCH CONTEXT AND METHODOLOGY
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