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Background
Five years ago, cardiologists Timothy Jones and Dolores Garcia decided to combine their in-
dividual practices in Fullerton, California, to form the New Century Health Clinic. They
wanted to concentrate on preventive medicine by helping patients maintain health and fitness
and by providing traditional medical care.
Dr. Jones recently asked you to work with him as an IT consultant. He wants you to help New
Century develop an information system that will support the clinic's operations and future
growth. During an initial meeting, he provided you with some background information and
asked for your suggestions about how to get started.
At your desk, you begin to review New Century’s situation. The clinic is located near a new
shopping mall in a busy section of the city. New Century's staff includes four doctors, three
registered nurses, four physical therapists, and six office staff workers.
The clinic currently has a patient base of 3,500 patients from 275 different employers, many of
which provide insurance coverage for employee wellness and health maintenance. Currently,
New Century accepts 34 different insurance policies.
Anita Davenport, who has been with New Century since its inception, is the office manager.
She supervises the staff, including Fred Brown, Susan Gifford, Tom Capaletti, Lisa Sung, and
Carla Herrera.
Fred Brown handles office payroll, tax reporting, and profit distribution among the associates.
Susan Gifford is responsible for the maintenance of patient records. Tom Capaletti handles
most of the paperwork concerning insurance reporting and accounting. Lisa Sung has the
primary responsibility for the appointment book, and her duties include making reminder calls
to patients and preparing daily appointment lists. Carla Herrera primarily is concerned with
ordering and organizing office and clinic supplies.
New Century Health Clinic's office manager, Anita Davenport, recently asked permission to
hire an additional office clerk because she feels the current staff can no longer handle the
growing workload. The associates discussed Anita's request during a recent meeting. They
were not surprised that the office staff was feeling overwhelmed by the constantly growing
workload.
Because the clinic was busier and more profitable than ever, they all agreed that New Century
could afford to hire another office worker. Dr. Jones then came up with another idea. He
suggested that they investigate the possibility of computerizing New Century’s office systems.
Dr. Jones said that a computerized system could keep track of patients, appointments, charges,
and insurance claim processing and reduce paperwork. All the associates were enthusiastic
about the possibilities and voted to follow up on the suggestion. Dr. Jones agreed to direct the
project.
Because no member of the staff had computer experience, Dr. Jones decided to hire a con-
sultant to study the current office systems and recommend a course of action. Several friends
recommended you as a person who has considerable experience with computerized business
(i) Based on the given scenario above, what kinds of questions would you ask to assess the
initial feasibility of this project information, does the project seem feasible? [25 marks]
(ii) Describe what will be the plan of action if New Century Health Clinic management
decided to contract your services to perform a preliminary investigation? [25 marks]
(iii) What types of information is needed when you begin the preliminary investigation?
From whom will you obtain it? What techniques will you use in your fact-finding?
[50 marks]
-END OF PAPER-
To ask question based on the given scenario, and to determine the feasibility of this project,
three major yardsticks will be employed in the measurement of the proposal: Operational fea-
sibility, technical feasibility and economic feasibility. The questions will be asked to upper
management staffs and lower management staffs in new century clinic. Facts-finding methods
will be employed in other to provide answers to this questions I would ask as the analyst.
INTANGIBLE BENEFITS
Will the Computerized System be user-friendly that improves employee job satisfac-
tion?
Will the Proposed System be able to supply better information for business and stra-
tegic decisions?
Other questions that will be considered economically are:
Will the proposed system reduce costs? Where? When? How Much?
Will the system cause increase to New Century Health Clinic revenue? How? When?
Will the Computerized systems project result in more information or produce better
results? How? Are these results produced measurable?
Will the Computerized System Serve Patients better and interface with other partners
need smoothly?
Can the project be implemented within a defined time frame?
Are the necessary resources i.e., money, people and equipment available to kick start
the project if it’s acceptable or simply approved.
Other questions to be considered are:
Can New Century Health Clinic control factors that affect implementation or time
frame for implementation?
Has New Century management established a firm timetable for the project?
What conditions must be satisfied during the development of the System?
Will an accelerated schedule pose any risks? If so, are the risks acceptable?
Will a project manager be appointed?
To evaluate if the project is feasible or not, answers will be provided to these questions asked.
Consideration of the Organizational chart will be needed as well as the employment of
fact-finding techniques suitable for this process. Many levels of users within the organization
will be question and their answers assumptions and other factors will tell if the project is fea-
sible or not?
Office Manager
Anita Davenport
Supervises
Patient Statement,
Call Remainder. Maintenance of Patient
Lisa Sung Records, Insurance re-
porting, Appointment
booking
In addition to finding if the project is feasible or not I need to analyze the problems and op-
portunity, the project scope and constraints needs to be understood, fact-finding and opera-
tional, technical and economic feasibility for which have been considered and asked.
DEVELOPMENT COSTS
Dr. Jones who is the Project manager has the final responsibility for estimating the cost of
development, an analyst will assist in its calculation. The project costs will contain the fol-
lowing categories.
Salaries and wages
Equipment and installation
Software and licenses
Consulting fees and payments to third parties
Training
Facilities
Utilities
Support for staff
Miscellaneous
Salaries and wages are calculated based on the staffing requirements of the project. Dr. jones
has the veto to estimate the cost for salaries and wages shown in Table 2.
Table 2
SUPPORTING DETAIL FOR SALARIES AND WAGES
Team Member Salary/Wage for Project
Project Leader $ 94,000.00
System Analyst $72,080.00
Programmer $49,285.00
Total Salaries and wages $121,365.00
Each of the other categories of cost requires detailed calculation to determine the estimated
cost. Detailed estimates of equipment, software licenses, training costs, and so forth can be
calculated. These details are then combined to provide an estimate of the total cost of devel-
opment. Table 3 is a summary of table of all the cost.
SOURCES OF BENEFITS
Dr. Jones and selected members of the project team can determine most of the development
and operational costs. However, this benefit relates to the user and client. Therefore we de-
termine the value of the anticipated benefits.
Benefits come from two sources: decreased costs or increased revenues. Areas to look for
reduced cost include:
Reducing staff due to automation of manual functions or increase efficiency
Maintaining constant staff with increasing volumes of work
Decreasing operating expenses, such as insurance claim processing, paperwork, ap-
pointments recording, charges, etc.
Reducing error rates due to automated editing and validation
Ensuring quicker processing and turnaround of documents or transactions.
Capturing lost discounts on money management.
Reduction on bad accounts
Collection of accounts receivable more quickly
Reducing paperwork cost with electronic data interchange due to computerization
Table 5 will give an example of the benefits that New Century Health Clinic expects form the
implementation of the Computerized System in the office Department.
FINANCIAL CALCULATION
This method is employed to determine the overall benefits of the new system, an approach is
the determining the Net Present Value of the new system: this permits for the calculation of all
benefits and cost in present day dollars and benefits and costs are combined to give a net value.
Another method to determine whether investment will be beneficial is to determine its payback
period.
The return on investment is another economic measure that can be used in the determination of
the investment benefits. Calculations for Return on investment and payback period shall be
done here and shown in the table 6 below.
Table 6
For New Century Health Clinic the return on investment (ROI), assuming a 3 year period is 44
percent. In other words investment in the development cost returned 44% which means the
system is developing profits at this point in time
INTANGIBLES
The previous costs and benefits depended on quantifiable cost and benefits. However in many
instances cost and benefits cannot be measured and values cannot be determined.
Since there is no reliable method of measuring the values they are considered as intangible
benefits. The intangible benefits far exceed the tangible cost at least form the opinion of the
clients. Some intangible benefits include:
Increased level of service by the introduction of the computerized system
Increased customer satisfaction
The need to develop in-house expertise
In other that the economic feasibility stands still, long-term capital is needed to source
the developmental process.
In summary, from the above analysis conducted, I can clearly deduce that the project is
feasible and can bring about organizational development.
QUESTION (II)
Describe what will be the plan of action if New Century Health Clinic management de-
cided to contract your services to perform a preliminary investigation?
The Plan of action in other to conduct a preliminary investigation are listed below as flows:
- Interaction With Manager ( Dr. Jones) and users (office Department staffs)
- Try to understand the problems and opportunity and the current and New Systems.
- Define the project scope and constraints.
- Performance of facts finding, through the following ways:
- Analysis of organizational charts
- Conducting of interviews based on affected areas in the Organization; looking the or-
ganizational chart.
- Review of old previous documentation (if any)
- Observe operations.
- Conduct a user survey.
- Evaluation of feasibility: economic, operational and technical will be done to ascertain
whether or not system development can be done or not.
- Estimate of Project development time and cost.
- Presentation of results and recommendations obtained from preliminary investigations
to Dr. Jones.
INTERVIEWS
For interviews, I decided to interview, Daven Port Anita office Supervisor of New Century
Health Clinic. My reason being that Daven Port will be able to provide me with an over-
view of the problem faced by her office department, including with facts about the primary
responsibilities of each staff of the office department. Questions as such as the if the change
in change in from the manual system to computerized system will is welcomed by herself
will be asked. A general idea and perception of the change of system will be required
during the interview with Mrs. Daven Port. Others staffs or operational personnel of the
office department will be questioned on their perception and acceptance of the change. The
re notion of the new system being welcomed will not be left out. Facts about their various
duties will be gathered.
If the system development will be approved, total cost depends on what appaorach is taken.
If the current system will be converted an estimated total of $1,121,303.00 will be required
for its development.
RECOMMENDATION
The problems identified in the preliminary investigation will increase as New Century
Health Clinic continues to grow. Also, it is clear that the current System can be modified to
handle task that are not done manually using a computerized system.
Based on analysis done, the benefits of computerizing the new system seemed to outwit
those of manual operations, it is my humble request that in order to avoid much pressure on
the office department staff the new system be developed as additional staff will only lead to
redundancy (human errors).
Types of Information needed during preliminary investigation will be obtained from two major
sources: they include; Managers: Dr. Jones and Supervisor: Mrs. Anita Daven Port who have a
broad knowledge of the systems operation and also operational personnel (users) : staffs of the
office department.
Firstly, there has to be analysis of the organizational chart, which defines the functions of the
organizations’ departments. I should be able to identify department affected by the change.
For the case of New Century Health Clinic, Dr. Jones and Mrs. Anita Daven Port will be the
Manager and Supervisor for which I shall obtain information as regards system changes and
current system. Operational personnel will include staffs of the Office Department as shown in
Table 1 above.