Benevolent Health Changes Acquisition Strategy

CASE SCENARIORecently, James McDermott was graduated with a masters' degree, majoring in information technology management. While a student, James attended classes on-line while continuing to work in Benevolent Health's Information Services department as a senior systems analyst. After graduation, he applied to an internal job posting for project manager and accepted an offer to him from Benevolent Health's Information Systems department.Just a few weeks into his new job, James received an invitation from the CIO of Information Services to meet with her. CIO Nancy Wilcox has an urgent need for information and asked James to meet and discuss the situation.Nancy began the meeting by reminding James that Benevolent Heath has previously only acquired small hospitals. When doing so, Information Services performed an informal and cursory evaluation of the potential acquisition's information systems and technology prior to Benevolent Health deciding whether or not to acquire the hospital. After an acquisition was finalized, Information Services always integrated the hospital in the same way - by converting them to use Benevolent Health's standardized processes and platforms. She noted her department has been quite successful doing this, with about 60% of all acquired hospitals' now using the same information systems processes and technology platforms.Nancy went on to say members of the Governing Strategic Planning Committee have been confidentially discussing acquiring a hospital that is larger and more mature than those acquired in the past. Personally, she was hesitant and concerned about applying their standardized integration approach to a larger hospital with more mature information systems and technology. She explained that doing so could potentially be very costly and too disruptive to the entire enterprise. Before ending the meeting, she asked James to report back to her on how Information Services could differently evaluate and integrate these larger acquisitions, and to explore how they could create value without necessarily having to integrate them fully using the standardized approach. She feared such an acquisition might be announced at any time and asked James to prepare a confidential report within one week, then meet with her to discuss it.James returned to his cubicle and thought about the project Nancy just gave him. He wasn't sure where to start. What could he possibly report to her in just one week? He began his project by compiling the following information, realizing he had a lot more work to do before reporting recommendations to Nancy.INTRODUCTION TO BENEVOLENT HEALTHBenevolent Health (BH) is located in the south central part of the U.S. Founded in 2002, BH has grown in capacity to 2,980-beds with 20 hospitals, 172 clinics and 14 long-term care facilities located in 4 states. BH employs 23,650 people, including 3,870 physicians. As of December 2012, annual operating revenues were $3.87 billion, with a net income of $294 million.Since 2008, Benevolent Health (BH) has used an aggressive strategy to grow through acquisitions of smaller hospitals. James compiled the listing, below, of acquisitions from 2008 through 2012, showing the percentage of BH's standardized processes and platforms implemented.BENEVOLENT HEALTH'S INFORMATION SERVICESNancy Wilcox, CIO and senior vice president of BH, manages Information Services. She is a member of the Governing Strategic Planning Committee, comprised of the president and chief executive officer (CEO), chief financial officer (CFO), chief medical officer (CMO) and herself (CIO). In alignment with the organization at large, Information Services adheres to BH's vision and mission statements in all decision-making processes.There are five departments within Information Services, as follows:1. Clinical Systems and Medical Records: Manages all medical related systems, including electronic health records (EHR)2. …