Investment Analysis

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Introduction

With Bad administrators, no matter how good a program or project may be in itself, it will fail. With Good Managers a bad program or project may become sustainable. 

The InHCc Project, or the Health Care Information System Project is a multiple element program that introduces systems and technologies that are largely new and unproven in Health Care Systems. Because of this and the fast pace change in technology it is important to submit this investment analysis to all stakeholders and specialists for their review, comments, and recommendations. 

This comprehensive Open Investment Analysis is a new approach in improving the likelihood of success of implementing this integrated health information system project in developing countries. This method minimize the risks and increases the chances of continued public health support, coordination, and collaboration. 

Systems can be implemented in phases. This reduces the risk by protecting existing investments and technical structures.

Over and over again when an organization is undergoing a "difficult financial period" the first item on the addenda is to improve the economic situation by getting more "funding." The second item on the addenda is to cut costs. What is seldom investigated is the act of making the organization more efficient. 

While the act of making the organization more efficient in some cases may lead to decrease costs, it also may lead to increase cost! Research is seldom done on determining the demand curve for the organizations services. An example is the quite frequent substitution of nurses for physicians, and nurses aids for nurses in the delivering of services to clients (in family planning). The question becomes, does the substitution of cheaper labor decrease demand for those services to the extent that although expenses are less, revenues are also less because of a decrease in demand for services...we will assume that clients feel more comfortable with having physicians carryout the procedures rather than nurses, and so on. Other examples are: more nurses give better service and leads to more demand and more revenue; mores services leads to a greater increase in demand than the cost of those services. Monitoring and Evaluation cannot return sufficient data to create the supply-demand curve in order to determine the correct strategies to maximize revenues.

Many health care projects start out with developing indicators, what they need to learn, is how to manage these indicators. 

It is not cost-cutting that is an issue but rather the maximizing the services delivered for the money invested. Cutting costs is seldom a long term solution. 

In many cases Client’s are reluctant to pay fees because they believe that the fees they are paying only goes to line the pockets of the “undeserving.” With good data collection it can be shown how the money is spent; as the efficiency and quality of services that the client receives improves, it will decrease the reluctant on the part of the client to pay for the services…thus increasing the sustainability of the organization.

Discussion

Often it is reported that in many organizations Management Information Systems (MIS) have not been as effective as they could be. This comes about because of the large discrepancies in what people think that MIS should do and what these same people actually develop. Grandiose goals are set out:

An effective management information system will provide the information which allows managers to analyze current situations, identify immediate problems and find solutions, discover trends and patterns so they can formulate appropriate goals and objectives for the future, and make intelligent choices about using scarce human, financial, and material resources, for example, 

  • Selecting appropriate target groups 

  • Selecting the most appropriate mix of services to offer

  • Selecting appropriate modes of service delivery,

  • Setting fees schedules based on the ability of a client to pay,

  • Setting standards for client satisfaction and service delivery.  

Yet, when it comes to designing the system, the only thing that is accomplished is the replacement of manual forms. The idea is that it will be "easier to read" and that the "calculations will be more accurate." This alone cannot justify a MIS System. The implementation of a MIS is an opportunity to create NEW information. This is the justification; not the substitution on a existing manual system with a computer. It is no wonder that so call "experts" descript MIS systems as not being worth their cost. 

If only simple, easy to collect, and easy to calculate indicators are collected...how can one expect to be able to "make a MIS system pay for itself"?

Total Cost of Ownership

Components of the Integrated InHCc Health Care Information System Project Investment Analysis 

  • Description:

    • needs

    • scope 

    • timeline to complete

    • overall cost

    • description and quantification of in-kind or other financial contributions

  • Goals and Measurable Outcomes 

  • Drivers

  • Collaborations

  • Requirements Analysis 

  • Benefit-Cost or Return on Investment Analysis

  • Capital Plan

  • Compliance with Standards

  • Security Plan

  • Analysis of Alternatives 

  • Project Plan

  • Risk Assessment and Risk Management Plan

  • Information Technology Architecture

Assessing the Total Cost of Ownership (TCO) is difficult. To create a model, all costs must be included including hardware, software, and cost of implementation. After that a certain system lifetime and how the organization uses the system must be considered.

Hidden from any TCO analysis are the opportunities created by having (or lost by not having) the system. 

  • Project Costs

  • Capital Cost

  • Operating Costs

  • Cost of Software

Most budgets that are developed around computer systems completely underestimate the project cost. Software development is estimated at 5 times higher that the amount spent on the physical system. If the developing country has no software, or if the software is so old as to be completely outdated, it is far cheaper and provides more benefits to purchase new software.

  • Cost of training

  • Scarcity of skilled workers

  • Expensive and need to send to schools out of country

  • Once they are trained can get better jobs somewhere else

  • Cost of equipment

  • Servers

  • Workstations

 

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