Chapter 15 Strategic and Financial Planning for Clinical Information Systems Flashcards
Vision statement
-Describes an image or a concept and expresses what the business hopes to be and what it hopes to achieve, avoids particulate, broad strokes to paint rosy picture
Mission statements
-tends to be more specific (although not always), usually mentions particular type of business and changes the business hopes to make
Goals and objectives
-goals are specific targets, objectives are shorter term than goals
-should be SMART (specific, measurable, achievable, realistic, timely)
VMOSA
Vision, mission, objectives, strategies, action plans
Environmental scanning
-process by which an organization systematically studies its environment in order to make better planning decisions
-microenvironment: internal scan looks within organization, to identify organization’s strengths and weaknesses
-macroenvironment: external scan to look at world in which organization operates, to identify opportunities and threats, PESTEL analysis (Political, economic, social, technological, environmental, legal)
VRIO framework
Value, rareness, imitability, organization
-to assess a company’s capabilities (for example, hospital and neurosurgical capabilities, with Gamma Knife)
PESTEL analysis
-Political, economic, social, technological, environmental, legal analysis
-way to perform external environmental scanning
SWOT analysis
Strengths, weaknesses, opportunities, and threats
-result of an environmental scan
-can be performed on organization, department, or even individual
Strategy
-set of decisions which should guide an organization to achieve its mission
-after organization performs its environmental scan, it should begin to create its strategy
-tends to fall into 1 of 5 functional areas: operations, finance and accounting, marketing, Human Resources, research and development
Durability
-length of time that a product remains state-of-the art
Inimitability
-difficulty that competitors would have in creating the same product
Resource-based strategies
designed to identify resource gaps and result in investing in replenishing or augmenting the organization’s resource base
Value chain
-set of activities that an organization performs in order to deliver a product or service
-there is value in linking the value chain of a supplier to the value chain of an organization (e.g., send representative of paper company to hospital to take stock of inventory of forms)
Strategic implementation
translation of chosen strategy into organizational action to achieve strategic goals and objectives
Operational budget
covers day to day items required for running the business
-some recommend 2/3 of business’s total expenditures should go to operating budget
Capital budget
used for larger purchases such as buildings and machinery that are expected to last more than 1 year
-some recommend 1/3 of business’s total expenditures should go to capital budget
Accounting rate of return (ARR)
-calculated as average profit divided by average investment
-more positive more better
-but does not account for time value of money
Payback period
-approximate time needed to completely recoup the initial investment
Discounted cash flow calculations
-enable us to account for the time value of money
-Present value
-Future value: rises exponentially
-Discount rate (percent by which it goes up)
Net present value
-value of the entire investment in today’s dollars
weighted average cost of capital
-often used as discount rate because companies have multiple sources of financing
Internal rate of return
As discount rate rises, net present value decreases and at some point reaches zero
-The discount rate at this point is called IRR
-Higher IRR is more profit
Managerial accounting
-the collection of financial data within an institution to enable strategic corporate decision making
-different from financial accounting
