Chapter 15 Strategic and Financial Planning for Clinical Information Systems

Question 1

Vision statement

Answer 1

-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

Question 2

Mission statements

Answer 2

-tends to be more specific (although not always), usually mentions particular type of business and changes the business hopes to make

Question 3

Goals and objectives

Answer 3

-goals are specific targets, objectives are shorter term than goals
-should be SMART (specific, measurable, achievable, realistic, timely)

Question 4

VMOSA

Answer 4

Vision, mission, objectives, strategies, action plans

Question 5

Environmental scanning

Answer 5

-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)

Question 6

VRIO framework

Answer 6

Value, rareness, imitability, organization
-to assess a company’s capabilities (for example, hospital and neurosurgical capabilities, with Gamma Knife)

Question 7

PESTEL analysis

Answer 7

-Political, economic, social, technological, environmental, legal analysis
-way to perform external environmental scanning

Question 8

SWOT analysis

Answer 8

Strengths, weaknesses, opportunities, and threats
-result of an environmental scan
-can be performed on organization, department, or even individual

Question 9

Strategy

Answer 9

-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

Question 10

Durability

Answer 10

-length of time that a product remains state-of-the art

Question 11

Inimitability

Answer 11

-difficulty that competitors would have in creating the same product

Question 12

Resource-based strategies

Answer 12

designed to identify resource gaps and result in investing in replenishing or augmenting the organization’s resource base

Question 13

Value chain

Answer 13

-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)

Question 14

Strategic implementation

Answer 14

translation of chosen strategy into organizational action to achieve strategic goals and objectives

Question 15

Operational budget

Answer 15

covers day to day items required for running the business
-some recommend 2/3 of business’s total expenditures should go to operating budget

Question 16

Capital budget

Answer 16

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

Question 17

Accounting rate of return (ARR)

Answer 17

-calculated as average profit divided by average investment
-more positive more better
-but does not account for time value of money

Question 18

Payback period

Answer 18

-approximate time needed to completely recoup the initial investment

Question 19

Discounted cash flow calculations

Answer 19

-enable us to account for the time value of money
-Present value
-Future value: rises exponentially
-Discount rate (percent by which it goes up)

Question 20

Net present value

Answer 20

-value of the entire investment in today’s dollars

Question 21

weighted average cost of capital

Answer 21

-often used as discount rate because companies have multiple sources of financing

Question 22

Internal rate of return

Answer 22

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

Question 23

Managerial accounting

Answer 23

-the collection of financial data within an institution to enable strategic corporate decision making
-different from financial accounting