Ever since the idea of Service Science was proposed,1 several lines of work in what is now called Service Science, Management, and Engineering (SSME) have been put forward.2 In the Prologue, we linked our work to a framework related to SSME, developed by Spohrer and Demirkan, for “Service Systems and Innovation in Business and Society” and concluded that our proposed approach is congruent with their ideas.
This book reports our research and development work in the engineering part of SSME and, in particular, the design of the components of health service systems. As stated in the Prologue, our main source of inspiration is Business Engineering, which not only shares the ideas and principles of SSME, but also tries to cover a larger domain including any type of business; its emphasis is on how to design any business—including Strategy, Business Model, Capabilities involved, processes, and IT support.3 Our experience with the design of many different businesses, such as manufacturing, distribution, bank services, retail, and hospitals,4 has enabled us to propose the conceptual model (Ontology) in Figure 1.1. According to this model, designs are based on the Strategy and the Business Model that an organization wants to put into practice. We found that Porter’s ideas5 for Competitive Strategy, complemented with the Delta model6 for strategic positioning, are useful in providing options for business innovation. In particular the Delta model defines the following positioning strategies: (a) best product that means developing unique attributes for a business’ products that attract clients’ preferences; (b) integral solution to clients that implies understanding their needs in such a way that customized solutions can be offered, its final aim being for the offering organization to get placed into the Value Chain of the client; and (c) systemic lock-in that attempts to create conditions that makes it very expensive and almost impossible for a client to make do without the services of an offering organization (lock-in), by creating an extended company that includes all the clients and the complementors, who develop value-add products and a portfolio of services they offer to the clients. Also the ideas of Johnson, Christensen, and Kageman7 and the Business Model Canvas8 are adequate to define precisely the value that innovations would provide to clients. Other ideas, such as innovation portfolio,9 can be useful in complementing value creation definition. All these concepts are reviewed in more detail in Chapter 2.
Figure 1.1 Ontology for Business Design
But no Strategy or Business Model specifies how the positioning and the value will be actually delivered in operational terms. This is what a Business Design will detail, starting with Business Capabilities necessary according to the Strategy and Business Model. This must be complemented with the design of processes, systems, organizational and IT support that make the Business Capabilities fully operational, giving rise to the other architectures included in Figure 2.1 that are described as follows:
Process Architecture, which establishes the processes necessary to implement the Capabilities and Business Design, the relationships that coordinate the processes, the business logic—algorithms, heuristics, rules, and, in general, procedures—that automate or guide such processes and their connection to IT support.
Organization Architecture, which is related to the common organizational charts and defines how work will be structured—who will do what—and the relationships among them—who will respond and relates to whom. Such architecture is much related to the Process Architecture, as we will detail and exemplify in Chapters 3 and Chapters 4, process design determines, in many cases, peoples’ roles.
Systems Architecture, which defines the Information Systems that exists in an organization, their relationship, and the support they give to processes. Again there is a close relationship between this architecture and Process Architecture, since the system support should be, according to our proposal, explicitly defined in process’ design, which can be given with current, modified, or new systems that change the architecture.
Information Architecture, which shows the structure of the Information Systems’ data and, for the same reasons as in (3), is also related to processes.
Technical Architecture, or the contents and structure or the hardware and nonapplication software on which data resides and systems are run, which are obviously related to all the aforementioned architectures.
As a much-simplified example of the application of Ontology, consider a private hospital that has defined a strategy of providing the most advanced services in its market in terms of medical practices and supporting technology. The Business Model then is to provide high-value services to patients, which increases the probability of patients’ well-being and for which they are willing to pay premium prices. Then the hospital needs Capabilities and a Business Design that are able to generate such services. The Capabilities are, in this case, the abilities necessary to innovate in medical practices and the knowledge of new technology that supports such practices; the Business Design is a structure of components that delivers the Capabilities. In this case, a new component that performs a new service development, another that is able to put the new services into practice and one that can do associated marketing and selling. Since the hospital does not have these components, new processes that enhance the current architecture to make such components operational should be designed. Among others, a process for a new service development should include the definition of actors’ role in the process, which can be a new group created for this purpose or a group comprising the existing people in hospital operations that, with adequate support, form an innovation team that produces new medical procedures. Clearly, there are different organizational structures for the aforementioned alternatives and this shows the relationship between process and organization design. Then process design will determine system support, for example, for new service development planning and tracking, and data, software, and hardware needs related to the other architectures, as illustrated in Figure 1.1.
These general ideas of Business Engineering are applicable to services design in any domain, as we showed in the previous volume cited in the Prologue, and in particular, to health services, which is dealt with in Chapters 3 to Chapters 6.
This work poses and intends to prove that, in performing the aforementioned designs, patterns can facilitate a task. First, Business Patterns that are derived or abstracted from vast experience and knowledge generated in service design, including our own and from literature, are proposed; these emphasize the different structures, components, and relationships a business may adopt in providing services to its clients.
Further, it will be shown that business service designs can be made operational by Business Architecture and Processes Patterns that detail how such designs can be implemented, including the technology support needed for their execution; these process patterns will be summarized in Chapter 2 and are documented in other publications;10 they have been widely used in real projects.11
From experience on service design, with an emphasis on business and process design, and taking into account the model defined in Figure 1.1, the following types of design problems can be abstracted, which are exemplified with health situations, the application domain in this book.
Business Design delivers the structure of components—production, management, supporting, and others–and their relationships, and the interaction with the environment that generates a Business Capability, which provides a service with value for customers in accordance with the Strategy and Business Model. It represents what a business should do and does not map to organizational units, area, or product. A case of this type is the design of a hospital with the different service lines it offers—urgency, ambulatory, hospitalization, and others—the degree of management independence of the lines, the interaction among lines by interchanging and sharing of internal services, and the degree of use of outsourced services.
Business configuration and capacity design includes the determination of the processes that should be present to assure that the service defined in (i) is provided in an effective and efficient way. In addition, what capacity should each process provide to be able to meet the demand according to the desired Service Agreement Levels (SLA). For example, hospitals’ urgency services may have different configurations in terms of its processes, among others: (a) use of a Triage (patient routing), (b) a fast-track line, and (c) several different lines of service. Once the components are determined, capacity for each of them making possible to process demand must be determined to have a desired patient average waiting time. This problem is relevant only when demand behavior changes or there are possible innovations in service technology and it is usually related to strategic investment issues.
Resource management process design is the management of people, equipment, and supplies that are necessary to provide the capacity established in (ii). For example, in hospitals, several doctors of different specialties work in each shift. This requires well-designed processes—based on forecasted demand—which plan and assign resources such that capacity is provided at a minimum cost. Such processes are executed with regular frequency depending on demand dynamics.
Operating management processes design provides processes necessary for day-to-day scheduling of demand over the resources in order to assure the required level of service and optimize their use. For example, in public hospitals, where there are usually waiting lists of surgery patients, a well-designed process is needed to schedule them in operating rooms in such a way that priorities associated with the severity of patients’ illnesses are met and use of facilities is maximized.
We have developed an innovative design approach to solve the aforementioned problems in an integrated and systemic way. Such an approach is based on explicit and formal general business and process models, called Business Patterns (BPs) and Business Process Patterns (BPPs), which enable the definition of service design options and analytical methods that allow customer characterization and resource optimization in designing the service. Analytics, which will be reviewed in Chapter 2, is an important component of the designs we propose, since they allow to embed business logic in the execution of the processes that detect the need to act over the service delivery, determines options for such action, and automate or recommend action taking; for example, monitoring critical hospitalized patients, determining risky situations by means of analytical models, and advising nurses and doctors on possible actions. This is complemented with modeling of the processes with Business Process Management Notation (BPMN)12 and a technology that facilitates the process execution with Business Process Management Suits (BPMS) tools and web services over Service Oriented Architecture (SOA).13 This technology is reviewed in Chapter 2 and we show a case of its use in Chapter 6. In summary, we integrate a business and process design approach with Analytics and supporting IT tools in the following chapters.
We propose health services as the application domains for the outlined approach, where there are ongoing research and development projects from which general solutions have been derived. Such solutions cover in an integrated, systemic manner the whole array of design problems faced in health systems, including: (a) centralized governance structures for public health that, among other things, assign resources to promote good service and efficiency; (b) public health network configuration design, including primary services and hospitals of several complexity levels; (c) hospital configuration and capacity design; (d) hospital medical and management processes design; and (e) supporting Information Systems design. The general solutions for these design problems have been tested and very successfully implemented in the Chilean health sector, including 10 hospitals, providing better service and making optimal use of resources, for which analytical techniques have been embedded in such solutions. Some of the solutions and results obtained by their application are presented in Chapters 3 to Chapters 6. We are now working on their implementation in other hospitals and they may be eventually used by over a hundred health facilities.
The next chapter presents the foundations we propose for health care institutions design. Then, in Chapters 3 to Chapters 6, the design approach proposed and the role of Analytics in the context of design are explained with several health services cases, at different design levels, validating our proposal, including the results generated. Finally conclusions are summarized.