Mendoza study examines performance impact of information technology

by William G. Gilroy

A recent study of information technology (IT) at a hospital chain by two researchers from the Mendoza College of Business at the University of Notre Dame suggests that IT’s impact on organizational performance is best judged by actual IT usage and not simply the financial investment in technology.p. The study by Sarv Devaraj and Rajiv Kohli, assistant professors of management, shows a link between greater use of an operations research tool called Decision Support System (DSS) and quality and profitability outcomes, such as lower patient death rates and increased hospital profitability. The researchers examined DDS because hospitals are increasingly relying on it to improve health care and economic performance.p. Devaraj and Kohli suggest that earlier IT studies that examined technology investment only may not accurately reflect the effectiveness of IT. In their study, they evaluated the success of technology based on three measures: patient mortality, which attests to a hospital’s quality and success treating patients; and two measures of profitability, revenue per admission and revenue per day.p. The research involved a longitudinal study of a health care system comprising eight hospitals. Devaraj and Kohli chose to study data from an extended period of time because they were concerned that studies over the short term overlooked impacts that did not become apparent until some time later.p. The study appeared in the Institute for Operations Research and the Management Sciences journal Management Science.p.

TopicID: 3301