New Century Health Clinic New Century Health Clinic offers preventive medicine and traditional medical care. In your role as an IT consultant, you will help New Century develop a new information system.
Background Based on your earlier recommendations, New Century decided to continue the systems development process for a new information system that would improve operations, decrease costs, and provide better service to patients. Now, at the end of the systems analysis phase, you are ready to prepare a system require- ments document and give a presentation to the New Century associates. Many of the pro- posed system’s advantages were described during the fact-finding process. Those include smoother operation, better efficiency, and more user-friendly procedures for patients and New Century staff. You also must examine tangible costs and benefits to determine the economic feasibility of several alternatives. If New Century decides to go ahead with the development process, the main options are to develop the system in-house or purchase a vertical package and con- figure it to meet New Century’s needs. You have studied those choices and put together some preliminary figures. You know that New Century’s current workload requires three hours of office staff overtime per week at a base rate of $8.50 per hour. In addition, based on current projec- tions, New Century will need to add another full-time clerical position in about six months. Neither the overtime nor the additional job will be needed if New Century implements the new system. The current manual system also causes an average of three errors per day, and each error takes about 20 minutes to correct. The new system should eliminate those errors. Based on your research, you estimate by working full-time you could complete the project in about 12 weeks. Your consulting rate, which New Century agreed to, is $30 per hour. If you design the new system as a database application, you can expect to spend about $2,500 for a networked commercial package. After the system is operational and the staff is trained, New Century should be able to handle routine maintenance tasks without your assistance. As an alternative to in-house development, a vertical software package is available for about $9,000. The vendor offers a lease-purchase package of $3,000 down, followed by two annual installments of $3,000 each. If New Century buys the package, it would take you about four weeks to install, configure, and test it, working full-time. The vendor provides free support during the first year of operation, but then New Century must sign a technical support agreement at an annual cost of $500. Although the package contains many of the features that New Century wants, most of the reports are pre-designed and it would be diffi- cult to modify their layouts. No matter which approach is selected, New Century probably will need you to provide about 10 hours of initial training and support each week for the first three months of opera- tion. After the new system is operational, it will need routine maintenance, file backups, and updating. These tasks will require about four hours per week and can be performed by a clinic staff member. In both cases, the necessary hardware and network installation will cost about $5,000. In your view, the useful life of the system will be about five years, including the year in which the system becomes operational.
PRELIMINARY INVESTIGATION REPORT
Subject: New Century Wellness Group
The purpose of this report is to detail the findings of the preliminary investigation and propose possible options pertaining to a new information system for New Century Wellness Group. This study was conducted at the request of Dr. Timothy Jones, one of the owners and founders, by Daniel West.
The requested system would ideally automate the process of appointment scheduling, patient records and billing, and supply ordering while also working with, or replacing, the current payroll system. By automating these manual processes, New Century Wellness Group should see an immediate improvement in efficiency and a long term improvement in overall quality of work.
SYSTEMS REQUEST SUMMARY
The requested system will create an integrated office that automates the currently manual business processes by the office staff of New Century Wellness Group. Many of these processes pertain to the patient-office relationship including appointment scheduling, record keeping, and billing. Other processes that should work in conjunction with this new integrated office system would be for supply ordering, accounting, and payroll.
The major problem that this system should alleviate is the employee time spent on these processes. The staff of New Century Wellness Group has been unable to keep up with the demands of performing these processes manually and overtime has become a significant cost to the company. Other problems associated with the current processes include the billing process taking too long and timeliness of working with the insurance companies to receive payment.
Aside from rectifying the above listed problems, the requested system will provide many opportunities for growth and quality control for New Century Wellness Group. By automating and integrating the office, there will be improved job efficiency and work satisfaction with less redundant tasks and need for overtime.
PRELIMINARY INVESTIGATION FINDINGS
An investigation was conducted in order to determine key factors about the current system and the proposed project. After a thorough analysis of the employees and and processes of New Century Wellness Group, and interviews with staff, the following conclusions have been made.
The proposed project would encompass almost all office related processes, with the possible exclusion of supply ordering, and would almost completely replace all current systems. The scope of this project can not be understated as it would require an almost entire restructuring of the current system and extensive training for the current staff to ensure an effective implementation.
While the project would be a vast undertaking for New Century Wellness Group, the findings show that there is an extreme need for at least some new system to be made as the current workload has slowed company growth to a halt. Interviews with staff members have revealed a strong desire for a new system and show there is a willingness to learn the skills necessary to use this system.
The current cost of the manual system has increased as the workload of the office staff has increased. New Century Wellness Group currently has an office staff of eight people at a cost of $30,000 a year each, a total cost of $240,000 a year before paying for the current overtime. If each employee is currently working an average of ten hours of overtime a week there is an additional cost of $11,250 per employee per year. With eight employees that is a cost of $90,000 per year on top of the current $240,000 resulting in $330,000 a year in office staff salaries.
In addition to the current cost of the office staff there is the additional cost of the proposed new office. With the current system this would require an almost entire new office staff costing a potential $240,000 a year, but could be significantly reduced if the current staff could run many of the other offices business processes neccessatiting only hiring two or three new staff members for that office.
Other significant findings showed that there have been delays in billing processing and payments from insurance companies. These problems would also be eleveated through an automated, integrated, office solution.
The recommendation for New Century Wellness Group that was reached by the Systems Analyst is that a business support system should be created based on the current business processes. Along with this system, another medical practice support system should be created that will work in unison with the business support system to create a fully automated and integrated office. Employee training will be critical with this for successful implementation and it is possible that an IT professional be hired full-time to maintain the system. Specific conditions for the production of the system are listed below, but will require a significant cost and time commitment from the company.
TIME AND COST ESTIMATES
If it is decided that a new system is to be created then the timetable for production will begin immediately. The next phase will include analyzing the business processes and creating a list of requirements. This will involve active participation from employees and should be completed within one month. After this the design and production of the systems will begin and based on the preliminary investigation should take anywhere between three to nine months. After this implementation and security will be considered and training will begin, this process will be an ongoing process, but normal work should be able to be done using the system after three months from first implementation.
The cost estimate for the new system will depend on whether New Century Wellness Group chooses to buy third-party software or create a new system in-house. It is the recommendation that a modified third-party software be used, potentially an open-source electronic medical record system and a licensed business support system. This could cost anywhere between $500 to $3000 to purchase the software and whatever cost of time to modify and implement it.
If an IT professional is needed to be brought on staff this will cost an additional $30,000 a year, however, it may not be necessary.
The overall return on investment for the creation of this integrated system is extremely high, especially if the projected growth of the company continues. Right now the office staff of eight provides service for 8,000 patients requiring working overtime costing the company $90,000 on top of their base $240,000 salary. By eliminating this expenditure a 25% decrease will be seen from the current $330,000 being spent on employees salaries right now. This benefit would decrease to $60,000 if a new staff member is needed to maintain the system.
If the current system were to be implemented at a new office and require a brand new staff of at least six people, excluding a human resources and office manager, it would cost an additional $180,000 and increase the workload on the current staff to train and support this new office. If the new system is scalable to projected growth then the new office will only require between two or three new hires, at most a $90,000 a year investment in salaries. This system would ideally cut in half the necessary staff of any new office opened in the future.
Intangible benefits of this system include improved employee efficiency and work satisfaction. Also patients will notice an improvement in scheduling efficiency and billing processing. Payments to New Century Wellness Group from insurance companies should arrive faster and the overall organization of the office will improve greatly.
Do the following questions for discussion:
- Research and provide various development alternatives that should be investigated for New Century. This should include at least 1 alternative for In-house Development and 1 alternative for Third Party Purchased Software. The purchased software must be REAL….meaning get online to find software that could meet the requirements. If needed, call those companies and find out about the software as much as you can.
- For each alternative provide a detailed explanation of each.
- For each alternative provide the intangible benefits.
- For each alternative state the pros an cons. For example…state what requirements will be met with the purchase software versus what requirements will not be met.
- For each alternative provide the tangible benefits by providing a break even analysis (return on investment) based on the monetary value information from the New Century Case in Chapter 7. For more information on how to do this, go to the System Analyst tool kit in the back of your book.
- Finalize the assignment by recommending one of the alternatives. You must define WHY you are recommending the alternative by comparing the tangible and intangible benefits of each alternative.
a like to the book case study is in chapter 7 http://kmaazali.wordpress.com/2013/02/09/system-analysis-and-design-shelly-cashman-9th-edition/