Is Information Technology a Competitive Necessity or a Competitive Advantage?

Do you feel your information technology (IT) systems and staff are falling short of expectations?Over the years, we have received comments emphasizing the slowness and unreliability of healthcare IT systems, the high cost to purchase and maintain IT systems, the lack of interoperability between IT systems, and the unfriendly and invisible IT employees assigned to support the systems. Essentially, executives felt their past investments in IT and staff were made out of a competitive necessity rather than to create and sustain a competitive advantage. Let’s take a look at the differences between these two terms.

Competitive Necessity

A competitive necessity is required to catch up or stay up with someone else to compete with them. In a sense, it is the price of admission one must pay for the privilege to enter and play the game.

For example, a hospital wants to offer its clinical services in a new market, and its competitors deliver clinical results and diagnostic reports electronically directly to a physician’s EHR. Then, to compete, that hospital must ensure that it can provide at least the same level of electronic results and report service delivery.

Competitive Advantage

On the other hand, a competitive advantage is something that someone does or has available that tips the scale in their favor. This position alone does not guarantee a win, but it will significantly raise the odds that one can succeed as long as that advantage is not easy to replicate.

Using the same example above, in addition to offering electronic results and report delivery directly to a physician’s EHR, a hospital could capture data from the remote heart and glucose monitors worn by patients and send that data and trending information to the physician’s EHR, as well. This capability can become a competitive advantage if no other hospital provides this service to physicians in that market. So, why should you care? Because understanding the significant role that IT can play in a successful business is critical in establishing a proper perspective about IT. The effective communication of this perspective and scope is crucial to securing the necessary support for approving and executing key initiatives that can deliver the most significant value to a healthcare organization.

Next Steps

• Read our blog about cleaning up your IT vendor contracts
• Review the 8 information blocking exceptions you need to know
• Listen to the 5 fatal mistakes of an IT contract

Originally published December 1, 2016. Last update August 24, 2021.