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IT Governance and Types of IT Decision Makersin German Hospitals

An Empirical Study Among IT Decision Makers

The study analyzes the current status of IT governance in German hospitals. The mostimportant requirements of IT managers for IT are the optimization and standardization ofprocesses. IT investments in German hospitals shift from administrative to medical ITapplications. Private hospitals display relatively higher IT budgets than do non-profit orpublic hospitals. Two types of future IT decision makers are empirically identified. Theydiffer in their role as initiators for process optimization and regarding the degree ofinvolvement in strategic decision making.

DOI 10.1007/s12599-010-0132-6

The Authors

Felix Köbler M.Sc.Jens Fähling M.Sc.Prof. Dr. Helmut KrcmarLehrstuhl für WirtschaftsinformatikTechnische Universität MünchenBoltzmannstr. 385748 Garching b. MünchenGermanyfelix.koebler@in.tum.dejens.faehling@in.tum.dekrcmar@in.tum.deurl: http://www.winfobase.de

Prof. Dr. Jan Marco Leimeister (�)Lehrstuhl für WirtschaftsinformatikUniversität KasselNora-Platiel-Straße 434127 KasselGermanyleimeister@uni-kassel.de

Received: 2009-12-09Accepted: 2010-05-26Accepted after two revisions byProf. Dr. Buxmann.Published online: 2010-10-28

This article is also available in Ger-man in print and via http://www.wirtschaftsinformatik.de: Köbler F,Fähling J, Leimeister JM, Krcmar H(2010) IT-Governance und IT-Ent-scheidertypen in deutschen Kranken-häusern. Eine empirische Unter-suchung unter Krankenhaus-IT-Lei-tern. WIRTSCHAFTSINFORMATIK. doi:10.1007/s11576-010-0248-9.

© Gabler Verlag 2010

1 Introduction

In 2007, the German health care systemamounted to approximately €257 bil-lion for health services (Destatis 2009b),representing 10.6% of the gross domes-tic product (GDP) (Destatis 2009a) ofthe Federal Republic of Germany. Evenin previous years, Germany was a mem-ber of the Top 10 in the OECD regard-ing per capita spending on health care(Anderson et al. 2006). According to theGerman health report of the Federal Sta-tistical Office Germany (2009), expensesfor the hospital sector amounted to atotal of approximately €64 billion in2007.

The appropriate utilization of informa-tion technology (IT) is increasingly im-portant for the health care sector, espe-cially in providing medical services (Jähnand Nagel 2004) and associated admin-istrative processes (Lehmann 2005; Haas2005). In cases, IT enables an increase

in efficiency and effectiveness of pro-cesses for examination, treatment andmanagement in hospitals (Hacker andSchommer 2004). Furthermore, the uti-lization of IT may offer strategic andcompetitive advantages (Piccoli and Ives2005) and therefore opportunities fordifferentiation within the hospital sec-tor.

Numerous studies show IT enabledimprovements of business processes inhealth care, e.g., by IT applications fordata capturing and handling, prepara-tion of medication and administrativemanagement (Raymond and Dold 2002;Crane and Raymond 2003). In the early1990s, studies documented that the im-plementation of IT may result not onlyin cost savings by automating infor-mation gathering and processing, butalso due to faster and improved provi-sion of information for decision makers(Borzekowski 2002). It could be shownthat an improvement of information pro-vision for decision makers can result inhigher quality of treatment (Apkon andSighaviranon 2001; Hacker and Schom-mer 2004) and care (Nahm and Poston2000).

Despite the economic importance ofthe health sector in general and the im-portant role of hospitals within the healthcare sector, research on IT managementin hospitals has hardly delivered sounddata or explanatory models. Several re-cent studies are solely conceptual in na-ture and lack a review and test of theoriesby empirical data (Sachs 2005). Otherstudies focus on specific parts of IT man-agement, such as decisions of investments

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and composition of budgets related to IT(Bernnat 2006; Blum and Schilz 2005);however, they do not employ robust sta-tistical methods of analysis (Riedel 2006)and statistically significant and sound re-sults due to low participation (Irving andNevo 2005). In Germany, several studieswere conducted in 2006 (Leimeister et al.2008; Köbler et al. 2009) and in 2008 thatfocused on the state of IT management inhospitals using a broad empirical base inorder to partly close the described gap.

The following analysis and results arebased on the study conducted in 2008.The research questions were derived fromthe IT Governance Framework developedby Weill and Ross (Weill 2004; Weill andRoss 2005, 2004) and its IT decision do-mains as a theoretical reference. In addi-tion, different types of decision makerswere described using multivariate analy-sis methods.

The rest of the paper is organized as fol-lows: Sect. 2 gives an introduction to thetheoretical foundation of IT governanceframeworks and the research questions.Section 3 describes the research method-ology and structure of the sample. InSect. 4 the empirical results are discussedand summarized. Section 5 outlines lim-itations of the study and provides an out-look on future research.

2 Theoretical Foundations

2.1 IT Governance

The concept of IT governance as a spe-cific field of corporate governance hasevolved and been developed on the back-ground of increased importance of IT inenterprises and businesses today (Meyeret al. 2003). A common definition of gov-ernance is the specification of ‘who’ isresponsible for decisions and its corre-sponding results (Krcmar 2009). Corpo-rate governance is concerned with the or-ganization and control of managementto bring about an appropriate definitionof business objectives, and is concernedwith a corporate policy that considersdifferent interests of various stakehold-ers (Witt 2000). Consequently, IT gover-nance is an important part of corporategovernance.

According to Weill (2004), IT gover-nance covers the whole framework fordecision making and rights of participa-tion as well as responsibilities to ensurethe desired utilization of IT within a com-pany. This approach is largely compati-ble with other IT governance approaches,

Table 1 IT decision domains according to Weill and Ross (2004)

IT decision domains Description

IT Principles High-level statements about how IT is used in the business

IT Architecture Organizing logic for data, applications, and infrastructurecaptured in a set of policies, relationships, and technicalchoices to achieve desired business and technicalstandardization and integration

IT Infrastructure Centrally coordinated, shared IT services that provide thefoundation for the enterprise’s IT capability

Business Application Needs Specifying the business need for purchased or internallydeveloped IT applications

IT Investment and Prioritization Decisions about how much and where to invest in IT,including project approvals and justification techniques

such as the widely used approach Co-biT (IT Governance Institute 2009). TheIT Governance Framework (Weill 2004;Weill and Ross 2004, 2005) is the resultof several empirical studies. These stud-ies have revealed patterns of IT gover-nance constellations of top performers.The framework encompasses five majordecision domains which are summarizedin Table 1.

Our study focused on the status quo ofIT governance in German hospitals mo-tivated by a lack of reliable empirical dataon IT governance in German hospitals inliterature.

2.2 Reference Framework and ResearchQuestions

Our descriptive-exploratory study isbased on the IT Governance Frameworkintroduced by Weill and Ross (2005) thatserves as a theoretical framework andsystematization of formulated researchquestions. We developed our researchquestions together with representativesof industry associations and hospitalsin several iterations. The research ques-tions were derived from the IT decisiondomains (see Table 2). In a next step,several experts from each group of par-ticipants tested the questions regardingconsistency and clarity with the help ofpre-tests.

3 Methodology

A quantitative empirical survey of ITdecision makers was conducted in Ger-man hospitals to answer our researchquestions. Our understanding of theterm ‘hospital’ is based on the defi-nition provided by the German Fed-eral Statistical Office (§2 No. 1 and

§§3, 5 of Krankenhausfinanzierungsge-setzes (KHG) in conjunction with §107Sect. 1 (SGB V)). Accordingly, hospitalsare “(. . . ) facilities, in which, by medi-cal and nursing assistance, diseases, dis-orders or physical injury should be curedor alleviated or obstetrics is given andthe caregivers can be housed and fed”(Federal Statistical Office Germany 2005,translated from German). According tothe German Federal Statistical Office,2,086 hospitals were registered in Ger-many in 2008 (Destatis 2009c).

3.1 Data Collection

The data collection was divided into twosteps: Preliminarily, we conducted tensemi-structured interviews (Bortz andDöring 2002) with experts working inthe German health care sector or hospi-tals. Each interview lasted for two hoursand included IT executives from hospi-tals of various sizes (four interviews),IT executives of insurance companies(two interviews) and representatives ofleading manufacturers of hospital in-formation systems (four interviews). Inthe second step, we used records of acommercially available address database(Deutsches Krankenhaus Adressbuch) tocontact potential participants. As a partof the post-processing of data, we ex-cluded double counting by multi-stagevalidation checks and incomplete datasets. All subsequent results are based onsurvey data provided by the participants,i.e. IT executives and technical directors.

3.2 Sample Structure

A total of 207 data sets could be collectedby the survey. After post-processing ofcollected data, 206 were used for furtheranalysis. This represents a response rate

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Table 2 IT Decision domains with assigned research questions of the empirical study

IT decision domains (Weill andRoss 2004)

Extract from central questions by Weill and Ross(2004)

Research questions of the empirical study

IT Principles What is the role of IT in the business? Are German hospitals able to survive without theuse of IT systems?

Should IT in German hospitals be consideredsolely from a cost perspective?

Does IT possess the ability to enable new andprofitable business models for German hospitals?

Does IT deliver value for German hospitals?

IT Architecture What technical capabilities should be standardizedenterprise-wide to support IT efficiencies andfacilitate process standardization and integration?

Which organizational units or departments areinvolved in IT decisions affecting the entirehospital (IT standards)?

IT Infrastructure What infrastructure services are most critical toachieving the enterprise’s strategic objectives?

What administrative and medical processes andfunctions does IT currently support in Germanhospitals? Which will be supported in the future?

Business Application Needs What are the market and business processopportunities for new business applications?

What tasks are provided by IT executives ofGerman hospitals for their IT?

What opportunities in IT can be seen for the corebusiness?

IT Investment and Prioritization What are the distributions in the current andproposed IT portfolios?

Which applications will be of relevance for futureinvestment strategies?

How much say do IT executives have ininvestment decisions?

Table 3 Structure of datasample

aDifferences to the sample resultfrom missing data

Type of sponsorship Number of beds Total datasample

Federal HealthReport(2009a)

200 and lessbeds

200 to 799beds

800 andmore beds

Public 6.00% 24.50% 10.00% 40.50% 31.93%

N 12 49 20 81 665

Private 6.50% 9.50% 3.00% 19.00% 37.49%

N 13 19 6 38 781

Independent/Non-profit 7.50% 29.50% 3.50% 40.50% 30.58%

N 15 59 7 81 637

Entire sample 20.00% 63.50% 16.50% 100.00%

N 40 127 33 200a

Federal Health Report(2009b)

56.70% 39.17% 4.13% 100.00% 100.00%

N 1,181 816 86 2,083 2,083

of 9.88%. The majority of the partici-pants (88.2%) were male and 59.6% wereaged between 35 and 50 years.

For a useful analysis of the data, a seg-mentation of participants on the basis ofobjective characteristics is required. Rec-ognized categories for segmentation ofhospitals are size, as measured by thenumber of beds, and type of sponsor-ship. A comparison of former studiesreveals that there are no standardizedcategories for differentiating the size of

hospitals. The Federal Statistical Officedistinguishes six categories, whereas theGerman Hospital Institute distinguishesfour (Blum and Schilz 2005). Surveysconducted by the Institute of HospitalAdministration Braunschweig were basedon six different categories (Riedel 2006).In the underlying study, hospitals weredivided into the categories “less than 200beds”, “200–799 beds” and “800 or morebeds”. This categorization was based oninsights derived from the conducted ex-

pert interviews and allows the applica-tion of statistical methods due to rela-tively balanced sample sizes.

In Germany, three possible types ofsponsorships exist for hospital organi-zations: public, private and non-profit.Table 3 compares the structure of thedata sample to the total population. Thesample is not representative accordingto the Federal Health Report. The sam-ple size of hospitals with less than 200beds is under-represented; in contrast,

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Fig. 1 General perceptionof IT in German hospitals –comparison according totype of sponsorship

Fig. 2 General perceptionof IT in German hospitals –comparison according toperceived value proposition

the medium and large hospitals are over-represented. With regard to sponsorship,the sample contains too many public andnon-profit hospitals in comparison toprivate hospitals. The category “publichospitals” includes local, urban, as well asuniversity hospitals.

4 Findings

4.1 General Perceptions of IT

Participants were initially asked abouttheir general perception of IT, specificallyabout the fundamental strategic impor-tance of IT for their hospital, the role ofIT for developing novel business mod-els, as well as the importance of IT intheir hospital. In addition, IT managerswere queried about their perception of ITvalue contribution for the hospital orga-nization. We detected that all participat-ing IT executives regard IT as absolutelyimportant for their hospital. The findingdocuments a high diffusion of IT in ad-ministrative as well as medical processes

in German hospitals. This is in line withresponses that IT is necessary for estab-lishing new business models, and that ITprovides value proposition for the hospi-tal. All participants rejected the statementthat IT should be solely considered froma cost perspective. Differences (based ont-tests) between hospitals with differenttypes of sponsorships were not statisti-cally significant (Fig. 1).

In a next step, the first three questionitems were analyzed and related to thevariable “perceived value proposition”. ITexecutives were divided into three groupsbased upon their perception of valueproposition that IT afforded their hospi-tal. If a participant evaluated the questionitem “IT delivers a value proposition forour hospital” by the three lowest values(“strongly disagree”, “disagree” and “nei-ther agree nor disagree”) of the 5-pointLikert scale, we classified the perceptionof IT value contribution as low. Membersof the group medium rated the IT valuecontribution with “agree” and membersof the group high with “strongly agree”.

A division of the population accordingto the item “perceived value contributionof IT” in three groups (high, medium,low) resulted in statistically significantdifferences between these groups in rat-ing the question item “We need IT to re-alize new and profitable business mod-els for the hospital” (Fig. 2). EspeciallyIT executives with a low perception of ITvalue contribution have a cautious viewof the need for new and profitable busi-ness models. Our data indicate a strongpositive correlation between the imple-mentation of new and profitable businessmodels in hospitals and the perception ofthe value contribution of IT by IT execu-tives (Fähling et al. 2009). Significant de-viations for the other two question itemswere not detected.

4.2 IT Architecture

Decisions about the global IT architec-ture in hospitals are often not made byIT management alone, but in conjunc-tion with other stakeholders. Administra-tive as well as medical units/executives

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Fig. 3 Involvement in decisions concerning IT standards in the context of IT architecture

in hospitals are frequently involved inthese decisions. In most cases, this re-sults from decentralized organizationalstructures. German hospitals are typicallydivided into multiple hospital facilitiesand clinics. Due to the fact that IT iscross-functional, it is difficult to establishan appropriate balance between central-ized and decentralized decisions. There-fore, the participating IT executives werequeried as to which stakeholders (IT ex-ecutives, medical executives and/or busi-ness executives) were involved in deci-sions on IT standards in the context of ITarchitecture (Fig. 3).

Our data suggest that in more thantwo-thirds of the considered hospitals ITstandards in the context of IT architec-ture are exclusively set by IT executives(Fig. 3). With respect to the type of spon-sorship of the hospitals, almost no differ-ence can be found. In regard to the size,the data indicate some differences in de-cision structure: in 87.9% of large hospi-tals only IT executives are involved in de-cisions on IT standards in the context ofIT architecture. By contrast, in only 65%of small hospitals IT executives are exclu-sively involved in these kinds of decisions.

Therefore, in large hospitals the ad-ministrative executives are less often in-volved in the decision making processon IT standards compared to the deci-sion making process in smaller hospi-tals. Medical executives in large institu-tions are not involved in the decision

making process. The data suggest thatIT executives are often solely responsi-ble for complex application architecturesand IT infrastructures. Thus, in big hos-pitals the responsibility for decisions inthe context of IT architecture and infras-tructure shifts towards IT executives. It isnoteworthy that in private hospitals morethan 5% of decisions are made alone orjointly by administrative and medical ex-ecutives, without the participation of anIT executive. One explanation might bethat in these hospitals the medical or ad-ministrative executives additionally fulfilltasks in the field of responsibility of IT ex-ecutives.

4.3 IT Infrastructure

In a next step, participants were ques-tioned on their deployed IT applications.These were considered separately for ad-ministrative and medical applications. Inthis context, administrative applicationsrefer to modules and applications thatare primarily used for administrationand management tasks (e.g., receptionof patients or health insurance account-ing) and therefore support administra-tive processes in hospitals. Medical ap-plications primarily support investigativeand treatment processes, e.g., provisionof medical data, such as X-ray images orresults of medical pre-investigations. Fig-ure 4 shows absolute numbers for de-ployed IT applications of all survey par-

ticipants. We provided the participantswith five options to answer the questionitem on the status of IT applications: inuse, in planning, important to their hos-pital or not in use.

The data shows the wide distribution ofIT applications for the support of busi-ness processes, Diagnosis Related Groups(DRG), as well as personnel and materialadministration. The widely-used applica-tions for processing of case classificationsin German hospitals can be explained bylegal requirements in Germany. The factthat two hospitals in the data sample donot utilize IT applications for their corebusiness processes results from plannedupdates of the specific IT applicationsin the according hospitals. The distribu-tion of IT applications supporting busi-ness processes is based on the utilizationof hospital information systems (HIS).HIS are customized Enterprise ResourcePlanning (ERP) systems that are adaptedto the special administrative and med-ical processes of hospitals, e.g., the re-ception of patients and accounting withhealth insurance. Our findings suggestthat IT applications for service planningand maintenance are less common butthat a number of hospitals are planningto introduce this type of application inthe future. Furthermore, 24.3% of all par-ticipants state that an IT application forthe support of resource planning is cur-rently planned.

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Fig. 4 Administrativeapplications

Fig. 5 Medical applications

In comparison to Leimeister et al.(2008) who documented a prioritizationof IT applications to support the legalintroduction of DRG and case classifi-cations, the prioritization of IT applica-tions which are currently planned haveshifted to applications that support theresource planning and real estate man-agement. Consequently, it can be as-sumed that activities for the introduc-tion of DRG are completed. The high per-centage of planned administrative IT sys-tems to support resource planning andreal estate management tasks suggeststhat decision makers in German hospi-tals see a potential for improvement, e.g.,shortening lead times and utilization ofeconomies of scale. The increased activi-ties in planning IT-based systems and ap-plications to support care might be ex-plained by aspired and necessary qual-ity improvements in core health care ser-vices.

Figure 5 displays in use and plannedmedical IT applications. Our data sug-gest that applications for treatment, careand laboratory are the most widely-usedapplications. These applications havegained market saturation due to currentor respectively planned use in over 90%of hospitals represented by participatingIT executives. Applications for radiology,intensive care and surgery documenta-tion are information systems which wereonly used by a minority of the participat-ing hospitals. Their minor degree of dis-tribution is probably related to the factthat these applications are not utilized inall hospitals, as they cover special medicalprocedures.

Additionally we can note a high num-ber of IT applications to support the careand electronic picture archiving (PACS),which 57 respectively 45 of the partici-pating hospitals are planning at the mo-ment. The data suggests a similar plan-ning activity for applications to support

intensive care via Patient Data Manage-ment Systems (PDMS) and medication.PDMS are planned in 48 of the partic-ipating hospitals, and IT applications tosupport medication of patients in 52 ofthe participating hospitals.

4.4 Business Requirements for IT

Our survey results regarding businessrequirements for IT show that acrossall hospital sizes the optimization andstandardization of work processes is themost important business requirement forIT (Fig. 6). Consequently, IT executivesshould have additional knowledge aboutthe administrative and medical domainsand processes. Further, IT executives inlarge hospitals discern those IT require-ments that result in the realization ofnew business processes and developmentof new business segments to increaserevenue to a significantly higher degree

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Fig. 6 Businessrequirements for IT –compared by the size of thehospital

Fig. 7 Businessrequirements for IT –compared by perceivedvalue proposition

than do their colleagues in medium andsmall hospitals. We also found a rela-tively low valuation of IT requirementsfor the management and support of sup-plier relationships. A possible explana-tion can be seen in the large heterogene-ity of suppliers and corresponding low-institutional standardization of (data) ex-change formats. Additionally, the pro-cesses and structures of supply chainmanagement are heterogeneous in thehealth care sector and unique for eachhospital.

Subsequently, the results were com-pared according to the perceived valuecontribution of IT. We assume that the

perception of the value contribution andIT requirements for the optimization andstandardization of work processes, theimplementation of new work processes,as well as the development of new busi-ness segments are positively correlated(Fig. 7).

In summary, IT executives who per-ceive a high value contribution of IT as-sess the requirements for IT from thebusiness domain as being more impor-tant than do other IT executives. Theconducted t-tests show significant dif-ferences between the groups on ques-tion items inquiring about the opti-mization and standardization of work

processes, implementation of new busi-ness processes and development of newbusinesses segments to increase revenue.Therefore, we deduce that the assessmentof IT as an enabler depends on the per-ception of the value contribution of IT.

4.5 IT Investment and Prioritization

4.5.1 IT Budgets in German Hospitals

The compilation of IT budgets in Ger-man hospitals was determined by ask-ing participating IT executives to grouptheir provided IT budgets into three cat-egories. The first category represents the

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Fig. 8 Distribution of ITbudgets by hospital size

Fig. 9 Distribution of ITbudgets by the type ofsponsorship

operation of “relevant IT applications”,which covers the expenditures for the op-eration of existing applications. Sharesof the IT budget that are spent on ad-ministrative activities are classified underthe budget fraction “organization”. In thecategory “projects”, participating IT exec-utives were asked to provide data aboutthe components of IT budgets whichwere planned and allocated for the imple-mentation of new IT projects (Fig. 8).

A comparison by hospital size revealsonly minor differences in the distribu-tion of IT budgets within the three cat-egories. Nearly a third of IT budgets areallocated for activities concerning the or-ganization, one fifth of IT budgets areallocated for the planning and develop-ment of new IT projects, and 45% of IT

budgets over all hospital sizes are usedfor the operation of deployed IT applica-tions.

Our data show a different allocationof IT budgets according to the type ofsponsorship (Fig. 9). About 21.1% of theavailable IT budget is allocated for imple-mentation of new IT projects. The alloca-tion of IT budgets concerning organiza-tional items ranges between 30.1% in pri-vate and 38.2% in public hospitals. Con-sequently, in private institutions a signif-icantly larger proportion (47.3%) of ITbudgets are allocated to the operation ofIT applications compared to IT budgetsfor IT operation in non-profit institu-tions (43.8%). We explain this by a higherdiffusion of IT in private hospitals on theassumption that the operating costs in-

crease with the number of utilized IT ap-plications.

In summary, we conclude that 43.7% ofthe available IT budgets are spent for cur-rent operations of IT applications, whilethe data reveal small but statistically in-significant differences between hospitalsthat differ in type of sponsorship.

4.5.2 Prioritization of Planned ITInvestments

Based on our data on operating and cur-rently deployed IT applications, we wereable to identify the five most widely used,as well as future investments on plannedIT applications in German hospitals(Figs. 4 and 5). IT applications that sup-port administrative processes show a very

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Table 4 Top five of in use and planned applications

Top 5 in use IT applications Top 5 planned IT applications

$ Financial accounting + Care

$ Diagnosis Related Groups (DRG) + Systems for prescriptions

$ Human resources and wage accounting $ Enterprise Resource Planning (ERP)

+ Rehabilitation and treatment + Intensive care

+ Laboratory plus outpatient department + Electronic picture library

$ = administrative IT application, + = medical IT application

high degree of market diffusion. Threeof the five most widely used applicationssupport administrative tasks. These re-sults corroborate findings by Leimeisteret al. (2008) who documented that ITapplications in hospitals are mainly usedfor billing and administrative tasks. How-ever, we see a shift to investments in ITapplications that support medical pro-cesses and tasks. Table 4 lists IT applica-tions that are currently in use or in theplanning phase.

4.6 IT Decision Makers in GermanHospitals

For an effective and efficient utilization ofIT, the IT strategy needs to be aligned-

to the business strategy, and appropri-ate measures need to be derived from it(Henderson and Venkatraman 1993). ITexecutives need sufficient decision mak-ing power to maximize the value cre-ation by the utilization of informationand communication technology. Conse-quently, IT executives should posses thenecessary support from management orbe a part of the management team. Thismeans the question is: What types of ITdecision makers exist in German hospi-tals, and, in particular, what type of deci-sion makers do the questioned IT execu-tives expect in the future?

From previously conducted expert in-terviews we may presume that two typesof IT decision makers will exist in Ger-

man hospitals in the future. The first typeof decision maker – the “IT manager” –can be described as follows: IT managersinclude business objectives in the plan-ning of IT, have adequate decision mak-ing powers, and receive the right to par-ticipate in strategic decisions. The sec-ond type of decision maker – the “sys-tem administrator” – shows a contrarypicture: higher management pays less at-tention to system administrators and theydo not seem equally involved in decisionsof strategic and managerial importance,e.g., in contrast to IT managers, the sys-tem administrators do not possess the ex-clusive decision rights regarding IT bud-gets.

The responses to the future role of theIT decision makers were classified by aK-means clustering algorithm. The as-sumed two types of IT decision mak-ers determined the number of clusters.The variables for the classification arethe cluster variables shown in Fig. 10.The algorithm terminated after 14 itera-tions, as no changes in the clusters werefound. Based on the responses to per-spectives about the future role, the initialassumption concerning the two types ofIT decision makers could be confirmed.

Fig. 10 Two types of IT decision makers and cluster variables

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Table 5 Characteristics of the future role of IT decision makers in German hospitals

Characteristics of cluster Future role of top IT leaders

“IT manager” “System administrator”

Age Mean 46.37 44.61

Younger than 35 5.78% 12.32%

35–50 61.99% 52.05

%Older than 50 24.79% 27.40%

Gender Male 86.77% 90.41%

Female 5.79% 2.74%

Highest degree Vocational training 22.31% 35.62%

University 66.11% 54.79%

Beds mean value (median) 611.37 (480) 456.92 (330)

Size* <200 12.10% 30%

200–799 67.74% 58.57%

≥800 20.16% 11.42%

Sponsorship Public 42.15% 36.99%

Private 19.00% 17.80%

Non-profit 37.19% 43.83%

Decision-making authorityregarding IT investment

Only preparation 19.01% 28.76%

Takes the decision upto an amount

64.46% 58.90%

Takes the decision 15.70% 9.59%

Big differences were ascertained partic-ularly for future cooperation in hospitalstrategy, and for involvement in the deci-sions of the board or higher management(Fig. 10). The IT manager sees his role asdecision maker and as part of the man-agement board and is involved in the def-inition of the hospital strategy.

An analysis of characteristics of bothtypes of decision makers shows that thegrouping depends significantly on thehospital size (Table 5). The larger thehospital, the more likely the IT decisionmaker sees himself in the role as IT man-ager. In contrast, the two decision makertypes are distributed evenly among thevarious types of sponsorships for Ger-man hospitals.

A comparison of the educational levelshows a significantly higher proportionof university graduates with IT managers.Additionally, regarding the discretionarycompetence in IT investments, IT man-agers enjoy greater freedom in decisionmaking in comparison to system admin-istrators. These differences are not statis-tically significant (ANOVA as a test fordifferences between the groups, markedby ∗).

5 Summary of Findings andLimitations of the Study

The first objective of the underlying studywas to document an inventory of IT gov-ernance structures in German hospitalswith the help of a quantitative empiricalsurvey. For this purpose, the study wasaligned to the IT Governance Frameworkintroduced by Weill and Ross (2005).The empirical results describe the currentstate of IT Governance in German hos-pitals. The second objective of this studywas to identify possible future types of ITdecision makers in German hospitals, aswell as to describe and to compare theircharacteristics.

The key findings regarding IT gover-nance and decision domains in Germanhospitals can be summarized as follows:� There is a positive correlation between

the perception of IT value contributionand the perceived potential of IT en-abled business models in hospitals.

� The power of decisions in the domainof IT architecture depends on the sizeof the hospital: The larger the hospi-tal, the more frequently the IT decisionmaker decides independently on rele-vant topics concerning the IT architec-ture.

� Our results suggest that hospitals aredecreasing their investments in ad-ministrative applications and increas-ing their investments in medical appli-cations.

� Main requirements for IT consist inthe optimization and standardizationof business processes.

� IT budgets in private hospitals containthe highest percentage share for de-ployed applications compared to non-profit and public hospitals, and havethe highest proportion of IT projectswithin the IT budget.

Two dominant types of future IT deci-sion makers in German hospitals couldbe discovered through a cluster analysis.Grouping of types depends significantlyon hospital size. In comparison to IT de-cision makers in smaller hospitals, IT de-cision makers in large hospitals differ in:their role as creative directors for the op-timization of administrative and medi-cal procedures, and the degree of theirinvolvement in the hospital strategy, aswell as involvement in decisions concern-ing strategic aspects. Interestingly, no dif-ferences between hospitals with differ-ent types of sponsorship could be docu-mented.

The results of the study must be in-terpreted on the background of limita-tions. The study considered only the per-spective of IT executives. Other perspec-tives, such as administrative or medi-cal decision makers, were not specificallyqueried. Future studies could address dif-ferent or similar expectations of the fu-ture role of IT managers from IT, admin-istrative and medical executives. The col-lected data and derived findings repre-sent only a snapshot; future survey stud-ies should therefore be repeated to allowconclusions about trends of consideredobjectives of the study.

Future research efforts could addition-ally identify or prove possible causal re-lationships between discussed findings.Furthermore, the survey has not iden-tified any performance measures for ITgovernance or characteristics of IT de-cision maker types in hospitals. Basedon our results, various conditions, e.g.,type of sponsorship or size of hospi-tals, and their possible effects on differentimplementations of decision making ar-eas of IT governance could identify best-practice configurations in German hospi-tals. We assume that a performance met-ric for effective IT governance in hospi-tals will become more important in thefuture.

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AbstractFelix Köbler, Jens Fähling, Helmut Krcmar,Jan Marco Leimeister

IT Governance and Types of ITDecision Makers in GermanHospitals

An Empirical Study Among IT DecisionMakers

Growing expenses for health care ser-vices in hospitals stress the potentialof a well applied IT governance forcost reduction, productivity gains anda possible source for competitive ad-vantages. The underlying explorativestudy analyzes the current status of ITgovernance through a survey among206 IT decision makers in German hos-pitals. The quantitative analyses showthat the most important requirementsof IT managers for IT are the optimiza-tion and standardization of processes,that IT investments shift from adminis-trative to medical IT applications, andthat private hospitals display relativelyhigher IT budgets than do non-profitor public hospitals based on financialturnover. Further, two types of futureIT decision makers are empirically iden-tified. The types differ regarding theirfuture role as initiators for process op-timization and regarding the degree ofinvolvement in strategic decision mak-ing.

Keywords: IT governance, Hospital,Healthcare, IT decision makers, IT out-sourcing

Further research is needed based onthe identified relationship between theperception of the value contribution ofIT and the utilization of IT to realizenew and profitable business models. Fast-growing investments in medical IT appli-cations for medical processes and tasksraise new research questions regardingan increased progressive fusion of ITand medical technology (Schweiger et al.2007; Mauro et al. 2008; Leimeister andGlauner 2008). Further research couldhelp to understand and explain whichrole IT plays within the health care sec-tor.

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