Journal Digital Transformation Starting with Finance
This is a common sense article - spelling out the open secret that if you want to transform anything then you have to make it about the money.
It is interesting to try and apply his argument to healthcare (socialised/NHS) where the value/cash flow dynamic is different to a typical business. I think this is one of the valuable things that Value Based Healthcare1 can bring to the NHS. But it unfortunately still doesn’t make finance flows as straightforward as an enterprise.
However what does ring true is:
Any significant decision or change therefore gets made in the context and constraints of how and why money is distributed to, and within, the business.
I don’t think the argument made about cultures being inextricable (or near enough) linked to money flow applies in quite the same way. It does. Just probably not in the same ways - particularly with the never ending austerity and efficiency pressures.
I’m not sure the “What Does This Mean For IT?” section has any transferable perspectives to healthcare - from a healthcare organisation perspective (it does describe the business structure of the major Health IT vendors quite accurately though, except they are all stuck in ‘Stage II’).
The description of how things go wrong though is probably more applicable to Healthcare organisations:
- They fail to see the value in building platforms (or maintaining infrastructure) and balk at the cost - not understanding the opportunity cost.
- They don’t accept the need for an internal team to sustain and maintain said platform or infrastructure.
The description of money flows relating to opex vs. cpex and project based funding rings true in healthcare. As does the “No money for hard-to-measure benefits”.
The conclusion is certainly applicable: If you want to do digital transformation you have to change how money flows in the organisation. The suggestion of involving the CFO/Finance and explaining things to them is probably less useful as in healthcare (NHS) flows are more opaque. I would suggest that Value Based Healthcare may help clarify this (no pun intended). The final advice of “Learning to speak the language of finance” is certainly true - though I would rephrase “Learn how to creatively write a Business Case”.
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While this is a good summary of Value Based Healthcare it kind of defeats the complexity that I was trying to explain about how value/cash flows are different as this focuses on the US healthcare system. A much better insight into the complexities and Value Based Healthcare in an NHS context can be found in the CEBM (Oxford) report Defining value-based healthcare in the NHS. ↩
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