Monday, July 2, 2007
Biomedical Research and Information Technology
Knowing IT, when and where to use it, is by now an essential piece of knowledge to executives in most large industries. Biomedical research is no different. Take clinical research for example -- large clinical trials are managed through electronic Clinical Trial Management Systems, data is stored using Electronic Data Capture systems, regulatory documentation is submitted using a variety of standards mostly encoded in XML, and communication among sites is made through technologies such as VoIP. As a consequence of this shift, CIOs in large research organizations, which obviously include academic centers, are no longer the young kids on the block, playing with the latest gadget and merely providing a service to top management. CIOs are now a central piece of the team defining strategic planning, carrying a progressively larger budget, and directly influencing areas that were previously exclusively dominated by other executives such as operations, marketing, and finance. Despite this change, IT-related areas still struggle to demonstrate their return on investment (ROI). The "cost-center" label is constantly around, and CIOs can barely make an argument about a direct association between their expenses and profit earned by the company. Time to sharpen our skills and try to come up with a better-defined measure of ROI?
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Great points. I think the current challenge organizations are faced with is how to clearly delineate the service functions that IT has historically been responsible for with the strategic role of technology. Nearly every leader argues that the future of their organization is largely dependent on how well they strategically deploy technologies that improve operations and open new markets. The trouble is that so few understand technology, and the multi-faceted nature of the investments required (business processes, partnerships, disruptive technologies, cultural changes, etc). Many struggle to determine if IT is merely focused on maintaining operations or as a strategic asset to be used in disrupting the status quo by drastically redefining how the organization operates. Unfortunately most rely on vendors as the source of innovation and in-house IT to keep the operations running smoothly. This is troubling in the sense that most vendors are concerned with incremental operational improvements (incentives push towards incremental improvements), while what is needed most is a constant force of disruption that requires a strong degree of business specific knowledge and technology expertise. I think over time as new, more technically adept, leaders emerge in organizations much of this will work itself out, but this will require a great deal of education of leaders. My fear is that the entrenched mode within health care is such that the leaders rarely have an interest in using technology, other than medical equipment, as a strategic asset to deploy. As far as valuation, this is difficult area to appropriate evaluate, in general I would argue that ROI is a rather poor approximation for IT as it is difficult to allocate financial gains to technology gains. For example, what is the return on an EDC solution, and how much of that return is attributable to IT versus operations? I'll have to think more on what a better method for measuring technology investments but I would think that Real Options would make a good framework in valuing the strategic choices leaders generally face when evaluating technology, as merely having the capability to choose (option) has an innate value unto itself.
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