Download Tracking and Measuring Digital Success

IT and Market Dynamics
The (R)Evolution of Technology
Class 6: ISM
P3 January 2005
The Imaging Healthcare Problem

450 million imaging studies a year X $35
life time cost per study = $15 billion cost

50% of imaging studies not available to
physicians when needed

15% of imaging studies permanently lost

4% expected annual increase of imaging
studies
Class 6: ISM
P3 January 2005
Information Flows: The “Enterprise” Problem
Hospital IS
(Billing, Patient data)
Referring
Physician
50% not online
Pre
Radiologist
15% lost
Patient
Radiology
X-Ray
Hospital IS
(Billing, Patient data)
Referring
Physician
Integration &
Storage
Patient
Radiology
X-Ray
Class 6: ISM
P3 January 2005
Post
Radiologist
Information Products:
New Economies of Scale and Scope

Ease of versioning: different people can
receive it in different forms – new
economies of scope

Ease of large scale distribution: low cost of
production and logistics – new economies of
scale
Class 6: ISM
P3 January 2005
The Failure of PACS

High cost (only radiologists in large hospitals
could afford it)

Many IT integration issues with existing IT

Lots of new IT infrastructure needed, such as
information storage systems

New technology risk (e.g. for small hospitals)
Class 6: ISM
P3 January 2005
Why would MI say ”no”
 Focus on current market, radiologists in large
hospitals.
 A small market (physicians in small hospitals)
is too small for a large company
 Focus on improving current PACS technology
 Focus on increasing services to current
market (more services = more $)
 Fear of cannibalizing their current market
Class 6: ISM
P3 January 2005
What “Wise” People Said…
1. “I think there is a world market for maybe five computers”
Thomas Watson, chairman of IBM, 1943
2. “There is no reason anyone would want a computer in their
home” Ken Olson, president, chairman and founder of Digital Equipment
Corp., 1977
3. “The horse is here to stay. The automobile is only a novelty, a
fad” The President of Michigan Savings Bank telling Ford’s lawyer not to
invest in the Ford Company, 1903
Class 6: ISM
P3 January 2005
Stakeholders
Stakeholder
Key Issue
Radiologists
“Funky functionality”
Referring Physicians
Images accessibility
Reasonable resolution
Small Hospitals
Cost
Integrate with current IT
Risk averse to new IT
Large Hospitals
High resolution
High quality services to radiologists
Cost
Incumbent (General Electric)
Increase radiologists market share
Improve current technology
Increase radiologists’ services (= more $)
Class 6: ISM
P3 January 2005
Stentor’s Market Entry Approach
 “Attack from below”
 Serve the less demanding physicians (“enterprise
market”) in small hospitals
 Avoid competition – it’s a virgin space
 Low-cost/Low-risk proposition




ASP model: pay per use, rent not buy
Installed at zero cost over the internet
30 days free trial option
Hardware, if needed, provided at cost
 Minimize IT integration problems
 Use existing IT with minimal changes
 Consider moving in the more demanding market
of radiologists later, using revenues from the
entry market
Class 6: ISM
P3 January 2005
Entering the high-end market:
Key Challenges
1. Technology:
–
Can iSyntax technology move up-market?
2. Service:
–
Stentor ranks lowest in market
(implementation, support, monitoring, etc)
3. People:
–
Many engineers, poor product
understanding by operations and sales
people
4. Vision, Mission, and Culture:
–
A focus on Product and Technology
Class 6: ISM
P3 January 2005
Challenge #1: Technology
Improve key technology features
Possible once you have the money from the
initial market (physicians) to support
technology improvements for the high-end
market (radiologists)
 Increase functionality
 Achieve high technology reliability
 Increase resolution performance
Class 6: ISM
P3 January 2005
Challenges # 2+3: Service and People
 Recruitment of a COO (ex-EDS manager)
 Build a new services organization
 Develop large IT implementation capabilities
(training, testing, etc)
 Provide excellent 24/7 IT monitoring,
support, and maintenance
 Manage technology upgrades
Class 6: ISM
P3 January 2005
Stentor’s Organisation 2001
CEO
CEO
Engineering
Engineering
CTO
Sales/Mktg
Tech Support
QE*Eng
Quality
Operations
Operations
VP Level
Senior Director Level
Director Level
Manager Level
Jumior Level
Class 6: ISM
P3 January 2005
Stentor’s Organization 2002
CEO
Engineering
CTO
Marketing
COO
Sales
QO*
OPS
SA ****
QE**
TS***
24 members
1 Senior
director
2 Managers
*QO=Quality Operations**QE=Quality Engineering
***TS = Technical Support
Class 6: ISM
****SA = Strategic Alliances
P3 January 2005
A Clear Implementation Procedure
Class 6: ISM
P3 January 2005
A Technology Monitoring System
Class 6: ISM
P3 January 2005
Challenges #4:
From Product to Service Centered
Stentor’s Mission 2001:
To deliver customer- focused, high
performance, medical information
solutions
Stentor’s Mission 2002:
To Improve Patient Care
Class 6: ISM
P3 January 2005
Key Lessons
 Technology’s evolution is shaped by the dynamics of :
– The different (types of) stakeholders/users/markets
– The differences in the needs and technology risk profiles of the
different stakeholders
– The difficulties of integrating the new technology within the current
technological infrastructure
 An entry strategy of new technologies:
– Enter a (often new) less demanding market: “attack from
below”
– Provide a low cost and low risk proposition
– Minimize integration issues with existing IT infrastructure
 The “natural” evolution of new IT
- Improve key functionality features
- Move from product to service
 … and (as always) the power of IT to transform
healthcare through digitization: dramatic cost
reduction, improved service
Class 6: ISM
P3 January 2005
Next Class
Internet, Technology, Society
 Adopting IT at the societal level
 Assessing the social IT readiness
Class 6: ISM
P3 January 2005