Joy Pechum, CEO of California Anesthesiology Group (CAG), was sitting in her office, preparing the agenda for the meeting of the board of directors to be held next Sunday. She thought about what to offer the board as an explanation for why she would spend $20,000 to deploy standardized project management methodology. At that moment the phone rang. She picked it up and heard the voice of Patrick, her VP of finance. He began, “Joy, I have a vendor invoice here. It shows that Dr. Squirrel had bought a computerized patient management system, costing $250,000. Its deployment would cost us another $250,000, i.e., a total of half a million dollars! All I want to know is whether you have approved it.” “No, I have not,” answered Joy hanging up angrily, trying to visualize the face of Dr. Squirrel, a big gun in the company, both as an anesthesiology expert and shareholder owner, when she tells the board about this purchase. OUR UNIQUE PRACTICE CAG is a for-profit company of 200+ medical doctors that provides their services by placing anesthesiologists in hospitals where they are needed; with annual sales of $90 million. CAG is an employee-owned company, where the largest shareholders are the most senior medical doctors in the company. Accustomed to being treated as royalty by the hospitals, these owners–senior doctors often behaved financially irresponsibly and ignored CEOs before Joy. was hired at CAG. The first order of business for Joy was to introduce financial discipline. She was successful in her mission but only after spending a lot of time and anguish. But, still some of these owners–senior doctors behaved in the same old way. Being owners–senior doctors, they often visited the premiere hospitals in the country, usually for managing patient systems. In pre-Joy times, some of them would order the software without consulting anyone. The then CEOs did not object to these purchases because they feared the power of these owners–senior doctors. EVIDENCE AND EVIDENCE Then came Joy, who did not tolerate this behavior. She, of course, tried to avoid conflict with the owners–senior doctors, but nevertheless brought two cases of such a purchase to the board’s attention. That was an appropriate way, Joy thought, since all owners–senior doctors sat on the board. Basically, she painted such purchases as an undesired attack on company profits. She thought that culprits were not aware of that, viewing the purchases only as CAG’s technological improvement, which eventually is passed onto customers. The board was on Joy’s side whenever she mentioned erosion of profits with such unplanned purchases. Simply, this was their money, and they did not like one to spend it, whether or not that someone was a colleague. HERE IS AN IDEA “Good God,” Joy thought to herself, “Half a million dollars! Gone! Wasted!” She remembered the last two software computerized patient management systems they had were never deployed! CAG did not have the skills to deploy the software, and doctors-owners appreciated making money working more than not making it and spending time deploying software. Then, she got an idea. What if she explains to the board that she needs a standardized project management methodology to help prevent this purchasing behavior? Actually, she wanted to deploy a standardized project management methodology exactly for this reason. Only, she could not tell the board earlier, and now that Dr. Squirrel made that dangerous move on the software purchase, she could. The first part of standardized project management methodology will be a standardized project selection process, mostly dealing with various patient management software projects deployed in order to improve service. Joy may use ZBB (Zero-Based Budgeting) or some other process that will prevent pet projects like this. The second part will be project life cycle–based project planning to secure that no one rushes into the project without first thinking it through. And, the third part will prescribe the project implementation procedure for Joy to know what is going on. Good idea? She once more scrutinized the idea and imagined how individuals on the board would react to how much of their money the system would save. Then, she concluded, “Joy knows how to defend profits.” Standardized Methodologies Discussion items 1. Which part of the standardized project management system that CAG intends to introduce may help prevent purchasing behavior of owners–senior doctors when buying patient management software on their own?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Joy Pechum, CEO of California Anesthesiology Group (CAG), was sitting in her office, preparing the agenda for the meeting of the board of directors to be held next Sunday. She thought about what to offer the board as an explanation for why she would spend $20,000 to deploy standardized project management methodology.
At that moment the phone rang. She picked it up and heard the voice of Patrick, her VP of finance. He began, “Joy, I have a vendor invoice here. It shows that Dr. Squirrel had bought a computerized patient management system, costing $250,000. Its deployment would cost us another $250,000, i.e., a total of half a million dollars! All I want to know is whether you have approved it.” “No, I have not,” answered Joy hanging up angrily, trying to visualize the face of Dr. Squirrel, a big gun in the company, both as an anesthesiology expert and shareholder owner, when she tells the board about this purchase.
OUR UNIQUE PRACTICE
CAG is a for-profit company of 200+ medical doctors that provides their services by placing anesthesiologists in hospitals where they are needed; with annual sales of $90 million. CAG is an employee-owned company, where the largest shareholders are the most senior medical doctors in the company. Accustomed to being treated as royalty by the hospitals, these owners–senior doctors often behaved financially irresponsibly and ignored CEOs before Joy.
was hired at CAG. The first order of business for Joy was to introduce financial discipline. She was successful in her mission but only after spending a lot of time and anguish. But, still some of these owners–senior doctors behaved in the same old way. Being owners–senior doctors, they often
visited the premiere hospitals in the country, usually for managing patient systems. In pre-Joy times, some of them would order the software without consulting anyone. The then CEOs did not object to these purchases because they feared the power of these owners–senior doctors.
EVIDENCE AND EVIDENCE
Then came Joy, who did not tolerate this behavior. She, of course, tried to avoid conflict with the owners–senior doctors, but nevertheless brought two cases of such a purchase to the board’s attention. That was an appropriate way, Joy thought, since all owners–senior doctors sat on the board. Basically, she painted such purchases as an undesired attack on company profits. She thought that culprits were not aware of that, viewing the purchases only as CAG’s technological improvement, which eventually is passed onto customers. The board was on Joy’s side whenever she mentioned erosion of profits with such unplanned purchases. Simply, this was their money, and they did not like one to spend it, whether or not that someone was a colleague.
HERE IS AN IDEA
“Good God,” Joy thought to herself, “Half a million dollars! Gone! Wasted!” She remembered the last two software computerized patient management systems they had were never deployed! CAG did not have the skills to deploy the software, and doctors-owners appreciated making money working more than not making it and spending time deploying software. Then, she got an idea. What if she explains to the board that she needs a standardized project management methodology to help prevent this purchasing behavior? Actually, she wanted to deploy a standardized project management methodology exactly for this reason. Only, she could not tell the board earlier, and now that Dr. Squirrel made that dangerous move on the software purchase, she could.
The first part of standardized project management methodology will be a standardized project selection process, mostly dealing with various patient management software projects deployed in order to improve service. Joy may use ZBB (Zero-Based Budgeting) or some other process that will prevent pet projects like this. The second part will be project life cycle–based project planning to secure that no one rushes into the project without first thinking it through. And, the third part will prescribe the project implementation procedure for Joy to know what is going on. Good idea? She once more scrutinized the idea and imagined how individuals on the board would react to how much of their money the system would save. Then, she concluded, “Joy knows how to defend profits.” Standardized Methodologies
Discussion items
1. Which part of the standardized project management system that CAG intends to introduce may help prevent purchasing behavior of owners–senior doctors when buying patient management software on their own?
2. Identify several options to help prevent purchasing behavior of owners–senior doctors when buying patient management software on their own. Do pro and con analysis of each and decide which option is the best.
3. How much does Joy risk conflict with the owners–senior doctors by bringing the attention of the board to the purchasing behavior of individual ownerssenior doctors when buying patient management software on their own? Describe this risk.
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