Information technology (IT) is typically one of the top three expenditures behind medical costs and salaries in healthcare organizations. It is a critical component of today's business infrastructure and at the core of many cost reduction and risk management initiatives.
Moreover, the healthcare industry is under particular pressure from government, labor and consumer groups to maintain or reduce administrative and medical costs while improving patient care, and technology is seen as crucial to this objective.
Yet many healthcare executives are frustrated with the return on the IT investment dollar and are concerned about the hidden risks that can arise when IT resources and operations are not aligned with business objectives. These executives don't always see the IT function focused appropriately on business objectives. They view IT services delivery as weak, find communication with their CIOs difficult, and consider IT as a cost rather than as a driver of the business.
While healthcare executives are uncomfortable with their current IT situation, they are also unsure of what to do because they lack relevant information to evaluate IT decisions, measure IT spending and performance, and instill accountability. The result is reflected in failures in the management of people, priorities and performance of the IT function. This, in turn, leads to increased IT costs (as much as 10-25 percent of IT spending is wasted or used unwisely) and increased business risk.
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