Assignment: Kaiser Permanent Strategy

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Assignment: Kaiser Permanent Strategy

Assignment: Kaiser Permanent Strategy

The Information Systems Strategy Triangle

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fix the problem. Instead, the Kaiser Permanente strategy focused on promoting health, enabling identification of problems before they became serious issues. For example, those in need of more exercise may receive a prescription to take a walk and an e‐mail reminder from health care providers to reinforce the new behavior. Staff incentive systems were aligned with this behavior, too. Physicians were all paid a flat salary and end‐of‐year bonuses if their patients achieved better health. All caregivers were rewarded for guiding people into making behavioral choices that were likely to keep them well.

The success at Kaiser Permanente was achieved in part because of the alignment between its business strategy, its information systems strategy, and its organization design. Physicians were part of the decision‐making processes. Managers were involved in the design and implementation of the information systems. The decision to move from a “fix‐me system” to a “proactive health system” was not made in isolation from the organization or the information systems.

The information systems (IS) department is not an island within a firm. Rather, IS manages an infrastructure that is essential to the firm’s functioning. Further, the Kaiser Permanente case illustrates that a firm’s IS must be aligned with the way it manages its employees and processes. For Kaiser Permanente, it was clear that not only did the physicians need a fast, inexpensive, and useful way to communicate with patients outside of regular in‐person appointments but also incentive systems and patient service processes had to be updated. Information systems provided a solution in conjunction with new operational and control processes.

This chapter introduces a simple framework for describing the alignment necessary with business systems and for understanding the impact of IS on organizations. This framework is called the Information Systems Strategy Triangle because it relates business strategy with IS strategy and organizational strategy. This chapter also presents key frameworks from organization theory that describe the context in which IS operates as well as the business imperatives that IS support. The Information Systems Strategy Triangle presented in Figure 1.1 suggests three key points about strategy.

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