Success in the healthcare industry, perhaps more than in many other business sectors, depends on the effective gathering and use of information. The collection, organization, housing and sharing of this information is now mission critical and often consumes more resources than any other activity within the corporation. For this reason, setting up a business intelligence platform or data warehouse system has become a high-pressure turning point in the life of every healthcare company today. From an operational view, this critical decision typically evolves into a "make vs. buy" dilemma. In many ways, however, this is a false dichotomy ­ instead, the answer is really a "make and buy" process. Of course, this "make and buy" approach opens up a new series of questions for the hard-pressed healthcare company IT manager. How do you determine what to do inside and what to contract out? And how do you integrate the two parts for maximum effectiveness? All too often, healthcare companies flounder on these key issues. They end up with a silo full of very expensive external information on technological developments and competitors that they can't use. Or, they have extensive in-house data on manufacturing, sales and customers, but no way to tie that information into ongoing healthcare news and trends. For example, one pharmaceutical company I worked with spent over $40 million setting up an impressive data warehouse full of internal information, but they neglected to integrate it with the external information that would have made it truly useful. The result was an enormous, under-used data system that failed to add real value to the company.

No two companies face identical decisions when it comes to building effective data warehouses. It all depends on their internal capabilities and business needs. The first step in the decision-making process is to stop and reflect. You must identify your company's present and future information needs, of course, but you also need to make a clear assessment of its current IT capabilities. Many companies do not identify their core IT competencies correctly and, therefore, believe they can do more on the "make" side than they actually can. Without the benefit of outside expertise, they lock themselves into structural mistakes that not only waste time and money in the present, but can limit effective information use for years to come and hinder long-term marketplace position. At a time when the larger companies in the field are merging to increase their competitiveness ­ thus raising the stakes for everyone ­ no company can afford to have a less-than-optimal data management system.

Reluctance to seek outside help is often exacerbated by a common misunderstanding. Many healthcare companies are highly focused on the proprietary value of their internal information and are worried about maintaining secrecy. Likewise, they understand the central importance of data management in the current business environment and come to think of data warehousing projects as "competitive edge" assets, essential to market survival. As a result, they resist the idea of going outside the company to utilize third-party expertise, even when it would be to their advantage to do so. What they forget is that their competitors are all engaged in exactly the same undertaking ­ building an effective information management system. When the dust settles, the winner will be the one who best utilized the common pool of IT knowledge.

In assessing your internal capabilities, you will discover that the areas you can handle on your own are closely related to the areas in which you need help. For example, no one can possibly understand your internal information better than you do. Therefore, it makes sense for you to take the lead in developing an internal data management system ­ with the understanding that this system will serve as a foundation for a complete system integrating internal and external information.

However, at this point many companies mistakenly assume that they have the in-house capacity to develop a user interface that will make this complex and voluminous flow of internal data easy and effective to use. In truth, major software companies with hundreds of interface design teams and thousands of product development clinics are still in search of a smooth and efficient interface ­ the IT holy grail. In order to tackle the problem of user interface, you need to go outside the company and seek the help of a data management expert.

Similarly, many companies working without expert advice fail to appreciate the complexity of moving from a data system focused only on internal information to one that fully integrates internal and external information for maximum effect. All too often, healthcare companies focus on what is familiar, building a system for the warehousing of internal information without considering how this data can be integrated with external information on technological developments, regulatory changes and market trends. But in today's cutthroat business environment, just putting up a front end that allows a sales manager to access account data, for example, is not enough to remain competitive. What if your sales manager needs to know which accounts have sales in excess of $1 million ­ and which of these have been acquired in the last six months? And what if he needs to know about competitors' products and pricing in this same category and how the outlook promises to change in response to new regulatory legislation? He will have to export sales information from your company's internal data warehousing system and combine it with information from other external sources in order to create a complete picture.

In looking to create a data warehousing system that effectively integrates internal and external information, your in-house strength is a detailed knowledge of the work processes required by your users. Your users probably cannot tell you exactly where the two forms of information intersect in their daily problem-solving routines ­ such as preparing a targeting report for a new marketing campaign. But through close observation, you can pinpoint those junctures where external information becomes a key element in achieving an effective business solution. This intimacy with your users' requirements is something that no outside consultant can offer.

On the other hand, your expertise will wane quickly when it comes to finding and accessing the external information you need. True, no one understands your internal information better than you do. But, it's impossible for you to assimilate a huge volume of external information as effectively as industry experts who track and sort it on a daily basis. So you will have to depend on outside sources for your external information ­ which obviously raises the question of just how this information will be integrated into your company's data management system. More specifically, since your outside information sources do not use your in-house customer numbers when tracking their targeted areas, how will you match the two categories of information ­ such as sales data and market potential ­ each time an update is provided? Fortunately there are data management companies that specialize in solving this problem.

The next big trend in data warehousing consists of prefabricated data warehouses, as well as data warehouses that come already stocked with information. A growing number of data management companies have identified the need for more effective data warehousing in the healthcare industry and provide platform solutions that integrate the best available information from the market, with software to deploy this information in a rapid fashion. These platforms focus on market information and provide easy links to internal data, as well as mechanisms to update data as quickly as possible. Thus, many of your interface problems are immediately resolved. You do not, for example, have to develop complex user interface systems with query capabilities ­ a feature that might appeal to your marketing department, but will otherwise overwhelm the bulk of your users. And as the context is already established, it becomes easy to link to key elements in your data warehouse at the appropriate times.

By using this sort of prepackaged solution as a foundation on which to build its own individualized data management system, an organization can accelerate the development of a user-friendly information warehouse. There is one caveat, however. For the platform to be successful, it has to be designed specifically to meet the needs of your industry, whether that is pharmaceuticals or medical devices or health maintenance organizations. Otherwise, the generalizations in the architecture will not provide you with the correct solution.

Furthermore, it is important to remember that any "off-the-shelf" solution, even one customized to meet your company's specific needs, will almost certainly involve problems and compromises. Since it is highly unlikely that a vendor has created a prefabricated platform that meets all of your company's requirements right out of the box, the probability is that you will have to prioritize and make concessions in certain areas in order to maximize total efficiency and achieve your core goals. Inevitably, integrating external information into your internal data management system will take more resources than planned and will often fail to work as smoothly as it should. As any IT manager knows, it is hard enough keeping your internal data consistent; maintaining consistency with external data that you did not create is a more formidable task. If it is any consolation, the great majority of pharmaceutical companies are behind schedule on their warehousing plans, and most medical device companies have only just begun to approach the problem.

As you can see, the make versus buy dilemma is really an ongoing series of make and buy decisions. The question of what to make in house and what to buy from outside sources is complex and can only be answered after a careful assessment of not only your company's changing information needs, but also its internal IT capabilities.

Following are some key points on what to do ­ and not do ­ when developing a data warehousing system.

Key Mistakes

  • Not identifying what you do well. Many companies do not identify their core IT competencies correctly and, therefore, believe they can do more in-house than they actually can.
  • Not knowing when to seek help. Many companies think of data warehousing projects as "competitive edge" and are reluctant to let outside consultants in on what they are trying to do.
  • Not recognizing that everyone else is working on data warehousing projects too. Remember that all of your competitors are also pursuing the exact same "competitive edge" project. The winner will be the one who makes the best data warehouse soonest ­ not the one who maintains the highest level of security.

Key Success Factors

  • Audit your abilities, not just your information. Find out who knows what and how you can use the capabilities of each member of your team to ensure the success of the project. Assume that each particular area of competency will become unavailable to you at some time in the future, as team members get promoted or leave the company. Determine how you will handle this before it happens.
  • Choose your partners carefully, but choose them. Don't try to do everything yourself. Remember that there is no glory for anyone if the project fails.
  • Keep others in the organization informed. Send out regular communications to let users know what you have done and when they can expect a usable product. Likewise, let them know when there have been delays. Expectation management is key.

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