Using vectors to minimize the mystery of IT strategy development: one of the most challenging aspects of IT strategy development is represented by statements such as, "our discussion around our goal of improving patient safety resulted in a decision to invest in computerized provider order entry."

Healthcare Financial Management, March, 2004 by John Glaser

How exactly does an organization conclude that a particular goal or strategy will result in a decision to make a particular IT investment?

Although trying to describe this process is likely to be forever challenging, the notion of strategy vectors can help minimize some of the mystery.

What Is a Vector?

The term "vector" refers to the line of reasoning or perspective an organization follows when determining its IT investments. The four major vectors by which organizations typically derive IT strategies are:

* Organizational strategies

* Continuous improvement of core operational processes and information management needs

* Examination of the role of new information technologies

* Assessment of strategic trajectories

Organizational strategies. The first vector involves deriving the IT agenda directly from the organization's goals and plans. For example, an organization that decides it will become a low-cost provider of care may choose to achieve this goal by implementing disease management programs, reengineering inpatient care, and reducing the unit costs of certain tests and procedures that it believes are inordinately expensive. The IT strategy development would then center on answering such questions as, "How do we apply IT to support our disease management strategy?"

Answers to this question might then range from web-based disease--management protocols for clinician use, data warehouse technology to assess the conformance of care practice to the protocols, provider documentation systems based on disease guidelines, and provider order entry systems that guide ordering decisions based on the disease guidelines.

An organization may choose all or some of these responses and develop variable sequences of implementation. It also would define the application systems and resources that are needed to support the goals. Whatever approach it ultimately pursues, the organization has developed art answer to the question "What is our approach to using IT to support the goal of implementing disease management?"

When framing their strategy, organizations should ask how IT can be applied to support a particular strategy or goal. Answers typically co me from consultants, trade publications, conferences, vendors, and colleagues. An organization also can learn from the IT activities of other organizations with a comparable goal. Of course, the relative effectiveness and maturity of these answers have to be assessed, as well as the determination of whether one organization's answer is truly your organization's answer.

Core operations improvement. For all organizations, a small number of core operational processes and information management tasks prove essential for the effective and efficient functioning of the organization. For example, a restaurant's core processes might include menu design, fired preparation, and dining-room service. For a hospital, these processes might include patient access to care, ordering tests and procedures, and managing the revenue cycle.

For strategies derived from this vector, organizations need to define these core operational processes and determine associated information management needs. The organization would then assess the performance of core operations processes and develop plans to improve their performance. Based on this examination, the organization then defines core information needs, identifies the gap between the current status and its needs, and develops plans to close those gaps. These plans will often point to an IT agenda.

IT investments derived from this vector may be related to an organizational strategy discussion, but not always. Efforts to improve processes typically are ongoing regardless of the specifics of the organization's strategic plan.

For example, every year there may be initiatives designed to reduce costs or improve service. The IT strategy is driven, in part, by a relentless, year in year out focus on improving core operational processes and addressing critical information management needs.

New technologies. The third approach to IT strategy developments involves the introduction of IT capabilities that enable the organization to either consider new approaches to its strategies or significantly alter current ones. As an example, wireless technologies may prompt the organization to consider applications once ignored when there was no practical way to address the concerns of mobile workers. Strategies may then be developed to introduce medication administration systems that can be used at the bedside rather than requiring the nurse to return to a central work area. In the same way, contemplating the Internet might prompt the organization to consider applications that create connections with referring physicians' offices.

With this vector, the organization examines new applications and new technologies and tries to answer the question "Does this application or technology enable us to advance our strategies or improve our core processes in new ways?"

Assessment of strategic trajectories. Organizational and IT strategies invariably have a fixed time horizon and scope. Strategies might cover a period of two to three years into the future and would outline a bounded set of initiatives to be undertaken in that time period.