One-on-One with JM Consulting's Satish Jha, Part II

June 24, 2011
Satish Jha, a guest blogger for HCI, consults on leadership questions that are core to implementing and managing large-scale IT operations. His focus

Satish Jha, a guest blogger for HCI, consults on leadership questions that are core to implementing and managing large-scale IT operations. His focus is on how management practices can be brought to bear upon the current state of information technologies to improve the patient experience, while keeping operations cost effective. President of JM Consulting LLC, Jha also chairs the eHealth-Care Foundation that provides Web-based patient, physician and hospital management services to small, community and public hospitals and physicians. Recently, HCI Editor-in-Chief Anthony Guerra talked with Jha about what it takes to be a superior CIO.

Part I

AG: How do you get them to think on that strategic CIO level?

SJ: I think my biggest challenge is to first let them get out of the IT manager mold, to think there is a world outside of this. Number one, when you go to the CFO, what are the questions that you talk to them about? So, for instance, when most executives called VP and CIO go to the CFO, what do they talk about? They talk about, ‘We need to do this … we have this problem … we don’t have a help desk … we need this … we need that.” That's their typical way of looking at it.

I have spoken to more than 100 hospital CIOs and I ask them the question, “What is your annual cost per desktop?” and I don’t get it. “How many desktops do you have? How many nurses do you have? How many patients do you have? How many patients come to your hospital? How many patients actually interact with your system?” Before I let them talk, I ask many questions like this and usually they do not have a clue.

This relates to the CIOs of smaller hospitals, but when I go to the system-wide CIOs, who have a $100 million budget, they understand the questions and quickly get me the answers. The response is very different. In the smaller hospitals, they haven't really thought about it.

Second, for instance, I go to a CFO office for a system.

He says, ‘My biggest expense is my IT budget.’

I said, ‘What happened?’

‘It went up by 25 percent last year.’

I said, ‘I thought you didn’t approve it.’

He said, ‘No, of course I approved it.’

So I said, ‘If you approved it, then it wasn’t an issue.’

He says, ‘You know I approved it, but nothing much has gone up, only this one area has gone up.’

So I said, ‘Okay, that’s partly because technology is totally an externality for you, but you want those things that you keep approving.’

I asked, ‘What's your software spend?’

He says, ‘I don't know.’

I said, ‘Well it’s very simple; you have certain budgets for a number of desktops or people who are using them. So we'll start looking at it. I’ll say between $6,500 and $10,000, you are alright. If you are under $6,500, there is something wrong, because you don’t have the size to get there. Over $10,000 there is something wrong, because you are doing something wrong and spending too much.’

So then they have a sense of what to spend on, what not to spend on. There is usually no benchmark they are working against. They don’t manage it. They are like handy guys, they have tools, they fix it. So the funds go for the tool, ‘I've got applications to handle, I've got networks to keep running, and I've got laptops to fix and this to fix, and desktops to fix, I've got this to take care of and I've got to fix.’

Instead of this, they have to think at the CIO level: ‘Okay, I'm an executive of the hospital. My spend is this, my patients are these, my physicians are these, my cost is this.’— there is no discussion of that kind in the technology groups. There is no business focus in the mind of the IT manager because there is no time for it. There is no response for it, there is no training for it, there is no experience base for it.

It takes a lot of time to get there. Some will get to the way of thinking as a CIO in a few years. In fact, I succeeded only in bringing one person out of 40 half way there. But 39 others, they are struggling to get out of the mold that they have. And 40 is a decent number actually to deal with for understanding what are they are starting with. So my experience so far in the three years has been the hospital level CIOs do not manage to have the necessary training, education, exposure, size and set of resources to think like CIOs, even though they are called the VP and CIO. That’s the reality.

AG: It seems that you feel a good way for CIOs to start improving is by asking the right questions.

SJ: It’s the same way we assess any executive in any corporation. You hear a question from someone and may determine just from that the level they are thinking on — ‘That’s a geek-level question or that’s an executive-level question, that’s a manager level question, that's a CEO level question.’ In other words, we give ourselves away by the kinds of questions we ask, and the questions we ask are a function of the visibility we have.

So for instance, when I'm a director, I'm going to ask a detailed question. When I'm a CEO, I'll ask a CEO kind of question, which is getting back to ROI or leadership and motivation, installation, or whatever — in between lies the whole range of levels and associated questions. So the kind of question a person asks determines in your mind what their exposure level, experience level is and where they are operating. Because we have to operate at each of those levels anyway, except that the CEO of a $10 million resource organization thinks very differently than a $100 million organization.

One thing is very clear, if you look at the data over the years, you may find that the larger organizations are more efficient in terms of productivity. So, per employee productivity of larger organizations in America has generally, over the years, been much higher than smaller organizations. When a very small organization is able to compete with them, then they have done something significantly different from the technology transformation point of view, and then they become huge. They start growing and suddenly you find, within a few years, they have gone beyond $10 million from starting with $10,000. They have finally figured out their transformation point or technology tipping point. Then they leave others behind and end up being a giant.

After you listen to their questions and determine their operating level, then you can think about how you take them to the next level, given the resources that they have, because we always operate at the level of our fundamentals, our foundations. If our foundations don't permit us to think of the larger questions, we cannot excel.

Having said that, we need to use external benchmarks for these hospitals to think of IT questions in a fresh way. If I’m the CIO of a hospital, which has $100 million IT budget, I think like the CEO of a $100 million organization and create a structure that behaves as such. Then I can include a VP of strategy and architectures, an office of Program and Project Management, Customer Service, Development, Operations, Help Desk etc and I can get people with requisite experience without making it look like top-heavy. We can have leadership development and so on. That is hardly possible if the IT budget were a tenth of that.

Another key issues is that size of spend determines quality and levels of expertise we can bring in. If each professionals address a dozen applications, they cannot have the same level of expertise in each application. So how do they manage that. You can have each person dealing with multiple applications, or you can turn to one of the managers who knows exactly whom to call to handle that, and then they start paying more attention to other issues as such. So how you cut it, matters. If they turn their team into a team of foot soldiers, they will get one kind of experience. If they turn the team into people who are thinking like middle managers and/or those that come out of larger organizations, then they are going to think quite differently. But it’s a kind of evolution, they start as programmers, and they never graduate beyond fixing some systems here and there. And only one person on a team of a dozen programmers has any experience of thinking beyond being hands-on, the guy in the trenches.

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