In 1998, when Halamka took over the IT section of the CareGroup, it was decentralized and non-standardized. In these 4 years, the mergers of the hospitals had led to new smaller networks being integrated to the existing network using switches and hubs making it extremely complex. This integration led to the lack of standardized protocol across the network, and the complexity made the network gradually become “out-of-spec”, meaning there was no clear pathway for communication between systems. CareGroup believed that they had the most advanced network, e-mail system, voice/wireless systems, data center and Web infrastructure. But all of these advanced systems were built upon a network based on primitive technologies. It was a weak foundation for a powerful system that was being built upon it. The network was gradually turning incapable of supporting their ever-growing IT operations, which was the major cause for the collapse of the system.
This mis-match of the capabilities that the network could provide and what it should have provided can be traced back to the low budget allocation for IT. They had reduced the IT budget by 90% during their financially unstable period. During the changes to the system, they were implementing with the same mindset of cost reduction, which was evident from the incident where they installed MediTech packages without any expert consultation to reduce the cost and installation time. This was very risky especially because CareGroup’s day to day operations were extremely dependent on the system.
Another big factor in the system failure was that anybody could make changes to the system without proper authorization and expert advice. As a matter of fact, people worked independently on the changes without keeping anyone in the loop, which was extremely risky as can be seen from the case when a researcher on the CareGroup network experimented with the knowledge management application based on file sharing and left the application running without testing it. This eventually triggered the outage as the application increased the network traffic exponentially.
2. Evaluate carefully the 10 lessons that John Halamka learned from the experience. Are these the right 10 lessons? Are there other learnings that come from this situation?
According to our evaluation, the 10 lessons are reasonable and useful. They solve the problems that caused the system collapse, such as outdated network, inappropriate system managing rules, lacking of experts with latest knowledge, and a weak change control. However, beyond these lessons, we have some suggestion to help improve the whole system in CareGroup.
One lesson is that CareGroup should allocate more financial resources to IT. Based on Exhibit 4, we know that CareGroup didn’t have enough financial support to maintain and update the system since IT expenditures as a percentage of total…