National Academies Press: OpenBook
« Previous: 3 Challenges in Transforming Enterprise Technology and Data Management
Suggested Citation:"4 Organizational, Administrative, and Cultural Challenges." National Research Council. 2010. Preliminary Observations on Information Technology Needs and Priorities at the Centers for Medicare and Medicaid Services: An Interim Report. Washington, DC: The National Academies Press. doi: 10.17226/13061.
×

4
Organizational, Administrative, and Cultural Challenges

In the general case, organizational and cultural change—encompassing people and process dynamics—is a significant factor in the effectiveness of new technology as well as in its adoption by the relevant stakeholders. Technology management—the strategic planning, design, development, and deployment of IT solutions, including new technologies—is a critical factor in successful transformation efforts.1 Indeed, the number of failures (based on metrics such as cost, schedule, and function) of large-scale projects of the sort being discussed in this report exceeds the number of successes. Both technical implementations and business process challenges have contributed to many expensive failed efforts in industry. Successful efforts depend a great deal on understanding and addressing the requirements of all of the relevant stakeholders and depend critically on acceptance or adoption of the new processes. Depending on the significance of the changes, a cultural change in the supported enterprise is likely to be an integral part of a successful effort.

CMS will need to grapple with these challenges, and studying what has tended to be most successful in the past would be instructive. The need for information systems to accommodate changing business requirements is matched if not surpassed by the need for these systems to meet increasing technical requirements—not only those relating to the scope and scale of transactions and data volumes, but also those relating to performance, efficiency, and cost. Advances in all areas of IT over the four decades of the life of CMS have been profound, with improvements in architecture, capacity, performance, and cost-effectiveness. Most IT solutions that are critical to CMS, including databases, data warehouses, transaction processing, and distributed computing, have matured through several generations. To accommodate significant business change and to take advantage of modern IT solutions, it is common for all

1

Pure technology challenges arise when new technologies are emerging (current examples include service-oriented architectures and social computing) and the computational and operational models are technically incomplete and immature. Vendors typically overpromise what the new technologies can provide—and how quickly they can do so—but enterprises often must still grapple with how to integrate new technologies into their architectures and processes. An 80/20 rule as a generalization is often applicable: roughly 80 percent of the challenges related to technology enablement are anchored around organizational and process dynamics, and only roughly 20 percent of the challenges are related to technology itself. (See, for example, Thomas H. Davenport and James E. Short, ”The New Industrial Engineering: Information Technology and Business Process Redesign,” Sloan Management Review, Summer, pp. 11-27, 1990.)

Suggested Citation:"4 Organizational, Administrative, and Cultural Challenges." National Research Council. 2010. Preliminary Observations on Information Technology Needs and Priorities at the Centers for Medicare and Medicaid Services: An Interim Report. Washington, DC: The National Academies Press. doi: 10.17226/13061.
×

decades-old systems to be considered for modernization. This modernization could involve re-architecting or re-implementing the existing information system and might involve migrating information system components—for example, databases, business rules, and other contents that must be incorporated in the modernized information system.

Reforming infrastructure in the face not only of demanding new requirements, but also of potentially significant changes to those requirements in the short term and medium term, will be difficult, and the process will be further complicated by the ever-changing policy environment in which CMS must operate. Moreover, cultural change to address new demands and requirements means a change in the way that the agency and its stakeholders operate and do business day to day. Such change will require an array of new skills and new ways of managing the development of needed functionality. In particular, architecting a sophisticated, complex, and constantly evolving system is a challenge when individual components of it are implemented and maintained by different entities (whether internal or on a contractual basis). A coordinated and direct management approach to ensure appropriate integration and adherence to well-articulated architectural requirements will likely be needed.

But CMS’s efforts are further complicated by federal budgeting—which does not easily allow for sustained long-term agency budgets or flexibility in resource allocation—the oversight context within which CMS must operate, and the complexity of the overall U.S. health care system. Resource constraints pose a significant challenge to successful transformation. The year-by-year, project-by-project approach to federal IT demanded by the budgeting process makes it difficult for CMS to prepare, plan, or implement a long-term, multiyear, multiprogram IT project. Moreover, past experience has been that funds for the development of new or refined systems are often obtained only by the removal of funds from other equally critical areas. However, the transformations and reengineering suggested above will likely require a substantial net investment made over an extended period of time. As noted previously, CMS has accommodated significant adjustments to its mission (and consequently its systems) over time, most recently the implementation of the Medicare Part D program for subsidizing the costs of prescription drugs. However, the scope and scale of upcoming changes associated with the recent legislative mandates described earlier seem, in the committee’s view, to present even greater challenges than any that CMS has thus far encountered.

Part of grappling with the kind of transformation described in this report involves developing ways to ascertain the needed skill sets and key gaps in those skill sets as well as devising and implementing a plan to address those gaps. High-level strategy setters, not the IT managers, should drive the development of business processes and definitions. However, the IT leadership at the agency must “sit at the executive table” as the high-level strategic directions of CMS, including the evolving business model, processes, and requirements, are addressed. Such participation by the IT leadership ensures that decisions made are cognizant of IT best practices in such areas as systems integration and standardization of processes and data, among others. In addition, in large-scale transformations, it is typically the program managers, architects, and transformation managers at the middle levels of the organization who have the most difficult job—that of transforming the technical results of the practitioners into the business results demanded by the executives and external stakeholders. Thus, building

Suggested Citation:"4 Organizational, Administrative, and Cultural Challenges." National Research Council. 2010. Preliminary Observations on Information Technology Needs and Priorities at the Centers for Medicare and Medicaid Services: An Interim Report. Washington, DC: The National Academies Press. doi: 10.17226/13061.
×

organizational trust in this middle level—and nurturing and hiring champions of the needed transformation efforts within it—is as essential as ensuring clear leadership at the top.

The role and impact of modern information systems can be seen in terms of the ecosystems in which the systems exist. Along with user and process ecosystems that make up the operational ecosystem that is its reason for being, an information system exists in several other ecosystems, including those defined by its organizational, management, development, and operational contexts. As with a user or process ecosystem, the success of a modernized information system depends critically on understanding and addressing those contexts (which are ecosystems in themselves), each of which must participate in and support the modernization effort and adopt the resulting system. For example, the information system must align with organizational missions and goals; modernization requires management support and leadership to address significant challenges; and it requires the development and operational life cycles to have the means to support the transformation.

Suggested Citation:"4 Organizational, Administrative, and Cultural Challenges." National Research Council. 2010. Preliminary Observations on Information Technology Needs and Priorities at the Centers for Medicare and Medicaid Services: An Interim Report. Washington, DC: The National Academies Press. doi: 10.17226/13061.
×
Page 12
Suggested Citation:"4 Organizational, Administrative, and Cultural Challenges." National Research Council. 2010. Preliminary Observations on Information Technology Needs and Priorities at the Centers for Medicare and Medicaid Services: An Interim Report. Washington, DC: The National Academies Press. doi: 10.17226/13061.
×
Page 13
Suggested Citation:"4 Organizational, Administrative, and Cultural Challenges." National Research Council. 2010. Preliminary Observations on Information Technology Needs and Priorities at the Centers for Medicare and Medicaid Services: An Interim Report. Washington, DC: The National Academies Press. doi: 10.17226/13061.
×
Page 14
Next: 5 Concluding Observations »
Preliminary Observations on Information Technology Needs and Priorities at the Centers for Medicare and Medicaid Services: An Interim Report Get This Book
×
Buy Paperback | $21.00 Buy Ebook | $16.99
MyNAP members save 10% online.
Login or Register to save!
Download Free PDF

Increasingly, the core mission of the Centers for Medicare and Medicaid Services (CMS), an agency of the Department of Health and Human Services, is expanding from one of focusing on prompt claims payment to one of becoming more broadly involved in improving health care quality and efficiency. The requirements for the information technology (IT) systems of CMS are changing as its mission changes, and the efforts to evolve its systems from those designed to support the agency's historical mission come in the midst of a push to modernize the nation's health care IT more broadly. These new challenges arise even as CMS must meet challenging day-to-day operational requirements and make frequent adjustments to its business processes, code, databases, and systems in response to changing statutory, regulatory, and policy requirements.

In light of these and other emerging challenges, CMS asked the National Research Council to conduct a study that would lay out a forward-looking vision for the Centers for Medicare and Medicaid Services, taking account of CMS's mission, business processes, and information technology requirements.

The study is being conducted in two phases. The first, resulting in the present volume, draws on a series of teleconferences, briefings, and an information-gathering workshop held in Washington, D.C., on September 27-28, 2010. The second phase, drawing on that workshop and on additional briefings, site visits, and committee deliberations, will result in a final report with recommendations, to be issued at the end of the project in 2011.

  1. ×

    Welcome to OpenBook!

    You're looking at OpenBook, NAP.edu's online reading room since 1999. Based on feedback from you, our users, we've made some improvements that make it easier than ever to read thousands of publications on our website.

    Do you want to take a quick tour of the OpenBook's features?

    No Thanks Take a Tour »
  2. ×

    Show this book's table of contents, where you can jump to any chapter by name.

    « Back Next »
  3. ×

    ...or use these buttons to go back to the previous chapter or skip to the next one.

    « Back Next »
  4. ×

    Jump up to the previous page or down to the next one. Also, you can type in a page number and press Enter to go directly to that page in the book.

    « Back Next »
  5. ×

    Switch between the Original Pages, where you can read the report as it appeared in print, and Text Pages for the web version, where you can highlight and search the text.

    « Back Next »
  6. ×

    To search the entire text of this book, type in your search term here and press Enter.

    « Back Next »
  7. ×

    Share a link to this book page on your preferred social network or via email.

    « Back Next »
  8. ×

    View our suggested citation for this chapter.

    « Back Next »
  9. ×

    Ready to take your reading offline? Click here to buy this book in print or download it as a free PDF, if available.

    « Back Next »
Stay Connected!