Building IT capability in health-care organizations

While computer technology has revolutionized industries such as banking and airlines, it has done little for health care so far. Most of the health-care organizations continue the early-computer-era practice of buying the latest technology without knowing how it might effectively be employed in achieving business goals. By investing merely in information technology (IT) rather than in IT capabilities they acquire IT components--primarily hardware, software, and vendor-provided services--which they do not understand and, as a result, are not capable of fully utilizing for achieving organizational objectives. In the absence of internal IT capabilities, health-care organizations have relied heavily on the fragmented IT vendor market in which vendors do not offer an open architecture, and are unwilling to offer electronic interfaces that would make their 'closed' systems compatible with those of other vendors. They are hamstrung as a result because they have implemented so many different technologies and databases that information stays in silos. Health systems can meet this challenge by developing internal IT capabilities that would allow them to seamlessly integrate clinical and business IT systems and develop innovative uses of IT. This paper develops a comprehensive conception of IT capability grounded in the resource-based theory of the firm as a remedy to the woes of IT investments in health care.