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Riverview Hospital

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  • Pages: 9
  • Word count: 2225
  • Category: Hospital

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The Riverview Children’s Hospital is eight months behind schedule with the implementation of a new computerized financial system. Management wants the system to be in place by the end-of-year audit [April], which is only six weeks away. However, management estimates that there is only a fifty percent chance that the system will function correctly if its implementation is rushed. While this makes a case for delaying the implementation, it also pushes the schedule into another fiscal year, bringing a large set of expenses over with it. The board wants to avoid this. A decision must be made that weighs the pros and cons of pursuing implementation before the audit versus the delay of the implementation until after the audit.

Analysis of the Implementation to Date

To date, the implementation has suffered from a variety of problems. Starting from the top, there is a disconnect between management and staff. While Louis Bernard, the AED of Finance, has prior experience with healthcare accounting, he does not have experience overseeing the implementation of computer systems. By his own admission, he does not have the interest in doing so and would prefer to have an MIS manager overseeing those duties. He also has to split his duties between overseeing Riverview and the nearby Thornhill hospital.

The hospital staff has continuously misled Louis about the progress of the project at each milestone, and his lack of familiarity prevents him from double-checking the work in progress to guard against this. The staff assigned to this project is overextended as they try to integrate this new technology and maintain their regular duties. They lack the required competency in this complicated field. The bulk of the work is falling on Wilma Lo who is not able to handle the added demands of the computer room. While she did express interest, the learning curve required by her to meet objectives is beyond her ability. A big mistake is that she has been left reporting to two different people: Louis Bernard for word processing and telephone services and Mark Thomson for the coordination of the new computerized system.

Sharon Picalle, the original project manager assigned by ICS, has experience in banking, a field that generally operates with a much bigger budget when implementing these systems. While her services were required, the manner in which she carried them out was not compatible with the needs of a hospital. She should have broken down the projected costs of the implementation with a contract statement of work (SOW) instead of surprising the hospital with a large invoice as the work was still in progress. Had she been able to forecast the expenditures before starting the work, the hospital would have been better prepared for the reality of the project.

The hospital management seems to understand the expenditures for the hardware and software in the project; however, they have a poor grasp of the manpower and training required to make the systems operational. The training allocated for the project implementation seems to have deliberately been cut by ICS to win the Riverview contract, but those cuts have resulted in even greater expenditures farther down the line. Management doesn’t understand their labor pool’s limitations: the office workers they have are trained in non-computerized methods to accomplish their tasks. Without the training on the new systems, those workers don’t see the benefits offered and the computer systems have become an obstacle to work around instead of something to work with.

It is fortunate that Dovetail provided John Dean, the more capable liaison to act as trainer and project manager. He may be the best chance that the project has to be saved. Dovetail was able to provide a SOW that breaks down the costs in advance. The dollar amounts were in line with the amounts that ICS billed, but as they were provided in advance, the decision to approve this large amount could be reviewed by the board and weighed against the projected benefits.

Given that regulations will eventually require the hospital to have such a system in place, the errors learned during this installation have been made without an externally imposed deadline. Right now, the hospital has to choose between the risk of a bungled audit (which will require overtime from an exhausted, unmotivated staff, double the audit’s 15,000$ price tag and hurt their financial reputation) or hire Dovetail, who will potentially be able implement the system before the audit deadline, but at a heavy cost. The hospital administration needs to accept the fact that the bulk of the costs associated with bringing this computer system into production are labour costs rather than hardware and software. All the attempts to circumvent these costs have resulted in the need for greater expenditures. Alternatives Analysis

Given the context in which Riverview finds itself, the following alternatives are viable:

1.Postpone implementation until after the audit

oTrain hospital employees on software after audit

oBegin new fiscal year with new system.

2.Implement the system before the audit

oParallel the systems for four months;

oGet Dovetail to correct purchase orders and train employees on the job before audit;

oGet Pam Smythe to do overtime and enter account payable invoices for the past four months.

Decision Criteria
Each alternative will be assessed against the following decision criteria:

•Time. Time is of great essence in the implementation of the new information system. The board would not be happy if the implementation was dragged through to the next fiscal period. •Cost. The project has already run over budget, so cost is a major factor in the decision going forward. •Quality of data. It is very important that the financial outputs (i.e. reports) reconcile and are accurate. Otherwise, the auditors will penalize the hospital and the reputation of Riverview will suffer. •Risk. With the implementation being eight months behind schedule, there is no room for error. •Effect on Human Resources. The morale of the staff has been negatively impacted both from failures of the old system and the perceived complexity of the new system. The decision should take them into account. Postpone implementation until after the audit

Effects on HR: The hospital staff is able to focus on their duties during the time leading up to the audit without the distraction of the new system. Risk: This solution is mitigates the risk of running two systems in parallel and not being able to reconcile both systems before the audit. Cost: Avoids additional auditing fees that could run as high as 15,000$


Time: Postponing implementation until after the audit will take the project into the new fiscal year. This will cause loss of confidence on the part of the board of directors and further frustrate the employees who do not see an end to this implementation. Cost: There is no guarantee that the implementation will be easy after the audit. It may be costly and without a sense of urgency, it may drag yet to another fiscal period. Risk: Given its recent performance the old system may fail before the audit and cause a lot of problems. Quality of data: Basing the audit on the old system will be messy and the quality of the reports will be poor.

Implement the system before the audit

Time: This is the most preferable solution in terms of time as it promises implementation of the system before the audit. Quality of data: This solution has the potential to offer the highest quality of data and reports if reconciled properly. However, it requires Dovetail to closely supervise the data entry and make it part of the employee training. Effects on HR: The need to reconcile accounts before the audit, would be an incentive for the employees to learn the new system by practice. Employees will be able to focus solely on the new system post audit and put all their efforts on mastering it instead of doing double entry.


Cost: New funds need to be requested in order to carry this initiative as it will involve acquiring the services of Dovetail (at $650 a day) and will require employee overtime. Risk: This is the most risky solution because of the time constraint – only 7 weeks remaining until the end of the fiscal period.

Decision Grid
The most critical requirements were given weights and rated against each alternative. A value from 1 (worst) to 5 (best) was assigned to the criteria and put on the following decision grid:


Selection Criteria
Postpone implementation2
Implement before the audit
Quality of data30%34
Effect on HR5%34
Total Score2.93.55

Recommendation & Implementation

Given the criteria, our recommendation is to implement the new system at the earliest possible, before the audit, getting Dovetail to enter the data while the staff prepares for the data on the original system in parallel. The project is long overdue, so everything should be planned and executed carefully to avoid the mistakes made in the past.

The nature and complexity of the implementation of this information system, requires tight orchestration of the activities of several departments, which has been missing in the past. Incorrect, late or missing entries of purchase order data impairs the ability of the system to generate accurate invoices. Moreover, erroneous entries in material’s book value have led to skewed inventory balances. These need to be corrected using a well-coordinated approach.

The full-time use of Dovetail’s services during the remaining stages of the project will mitigate the risk of any department’s errors in performing their expected duties. John Dean should spend several weeks instructing and supervising Riverview employees in correcting all the purchase orders for the period November-February. He should assist Pam Smythe concurrently in accurately matching each PO to an invoice; Entering the remaining three months (December, January, and February) will need about 120-150 hours, which can be done before the end of the fiscal period. Upon correction of all purchase orders, John should shift his attention to the materials management department and correct the inventory discrepancies, most of which should have, by then, been discovered by the program that matches invoices to purchase orders.

The activities that John would need to undertake in the remaining weeks ahead and the high involvement of the Riverview employees would indirectly serve as training on the job for them. In the process of repairing the data discrepancies, they would master the use of the system. However, formal training should be carried out during the last week of March. Sufficient time should be allocated to John, during and after the audit, to ensure that future discrepancies do not arise again. We estimate that the additional costs of this blitz implementation will mount to $30,000.

Louis should present the plan and the request for the extra funds to the board on Feb 19th and be transparent about the progress of the project. The roadblocks experienced to date should be openly admitted and the current plan should be unfolded in detail.

Changes to Prevent Future Problems

In the long run, communication processes between managers and subordinates need to be improved to convey any delays or difficulties facing the project implementation. Managers overseeing the product development must have prior experience and full grasp of the projects at hand, especially for projects of this magnitude. Finally, management will have to document and scope all expenditures estimates related to a project to prevent surprises in the future and to avoid cost cuts in the future that can negatively affect the project.

The hospital should hire qualified MIS staff to run the computer room. While a CIO is overqualified for the demands of the small hospital, it would be appropriate to hire an MIS manager to ensure that all the duties associated with the computer room are carried out. Telephone and word processing support functions could be transferred to MIS, with Wilma Lo joining this team and answering to only one manager who could guide her in executing her workload and in expanding her technical training. The MIS staff also ensures that the computer room knowledge is not concentrated in one individual who could be absent if illness, vacation or the decision to change jobs occurs.

Many employees have poor organizational skills regarding their workload. Once the computer system is in place, it can support a ticketing system that allows management to track workload. Employees would be expected to update the status of each task as a new stage is reached. Any lack of updates could be noticed by managers who would review tickets regularly. Ticketing also allow the management to track computer usage by department and assign a cost to them, allowing for more detailed budgetary planning.

Once the MIS team is handling Riverview’s demands sufficiently, the costs can be offset by allowing Thornhill hospital to access to those services through WAN technology (such as a Remote Access Server using modems). Thanks to the ticketing system, Riverview could also charge Thornhill the same way it charges its departments. Riverview’s MIS department benefits by becoming a profit center and the knowledge of Thornhill’s operations might allow Riverview to better absorb some of its duties once Thornhill closes. This setup could act as a template for other hospitals and clinics that work with Riverview in the future.

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