And Business Plan - Research Paper Example

? Running Head: 911 Health Care Services Corporation Business Plan I. THE IDEA “At a national level, we need a monitoring system that is mandatory. There has to be some mechanism for federal level reporting where hospitals across the country are held to it, and it’s just not a voluntary thing. We don’t have it. Voluntary reporting vastly underestimates the frequency of errors and injuries that occur” – Dr. Landriagn (Assistant Professor at Harvard Medical School) (Study finds no progress in safety at hospitals) Time is of essence in the field of health care. Actions done in the span of a few seconds may have great effect on someone else’s life. It is the driving factor in emergency cases. If immediate medical attention is not given particularly during life and death situations, a mishap could prove to be fatal. It is essential for a health care team to conduct necessary care and medical action to prevent the loss of life most especially during emergency situations. Much has been done to improve turnaround time in the medical field. Paramedics and emergency teams are well trained in ensuring swift and accurate handling of medical emergency cases. With this, the writers would like to introduce an innovation that would address challenges in establishing patient identity and medical history such that medical practitioners would no longer have to go through the motions of interviewing the patient or his companions/ relatives prior to implementing medical care. 911 Health Care Services Corporation is the driving force behind the 911 Emergency Health Care System, a product that aims to reduce the number of accidental deaths by providing instant medical history with just a scan of an eye. The objective of this product is to provide a secure product that will save lives without compromising identity. The management envisions eliminating the current turnaround time for administering emergency care services, and make patient identification as easy as it could be. The product will have a pilot launch in Massachusetts. Distribution will initially be limited to this state but management is looking at expanding to other cities and states, and eventually to other parts of the world. II. VALUE PROPOSITION Saving time and saving lives are the two value propositions of the product. 911 Emergency Health Care System aims to make patient identification quick and accurate, thereby resulting in fast and accurate administration of applicable drugs and health care. 911 Emergency Health Care System introduces the handheld retinal scanning device to be used in recognizing patients. The device communicates with a software program where patient data is stored. Once a patient is scanned, the medical team handling the case may proceed updating the medical records to ensure that the next handling team will be supplied accurate medical information as well. The service provides physicians and patients with timely access to patient medical information to save lives. On the patient side, we want to assure him that with this device, his eyes will say it all – his identity, his medical needs and history. He would not have to worry about not being to divulge all information needed. This is important particularly in emergency situations, where the patient is alone or is unable to communicate due to his situation. On the medical team’s side, the scanning device will improve their response time for emergency situations. Giving appropriate medicine and health care is important, and they would not be able to do this without any patient background and information. III. PRODUCT FEATURES AND BENEFITS With 911 Emergency Health Care System, even patients with no identification papers will receive appropriate medical care. Other benefits of the product are as follows: Medical team will have easy access to the patient’s personal and medical information. They can also update the information accordingly. The product aims to reduce accidental deaths or health care errors The scanning device and software reduces paperwork and administrative work in general, most especially for mobile health care services. Physicians and health insurance companies should prefer this product due to less claims and negotiations for co-pays The retinal scanning device is a handheld device similar to a barcode scanner. It is in itself a database program which connects to the main database every time it scans. Strong network connectivity is a requirement for the device to function as it needs to connect to a larger database that contains all the universal information patients, Every time the scanner is used, it displays at its central monitor all data stored for the patient. It is therefore attached to a monitor so as not to entail a printer anymore. The scanner is portable, easy to carry and store, and does not need any updating prior to use. All the users need to ensure is that it is connected with the main server always. The database software meanwhile processes data and stores them accordingly. The patient information to be stored is as follows: Name Address Phone number Primary care contact information Emergency contact information Allergies Medication taken Blood type Blood pressure information Surgical history Medical conditions Retinal scanning capability to recognize patient Medical device information (pacemakers, model number, etc.) Free field where doctor can enter remarks and special instructions IV. TARGET MARKET Massachusetts is estimated to be the third most densely populated US State as of 2007. Its population is estimated to be 6,593,587 as of 2009 (Demographics of Massachusetts 2011). The Department of Public Health is the main driving force behind the health care services of the state, having established policies and regulations that ensure top-of-the line health care services to its people (Health and Human Services 2011). Their Health and Human Services brings about a number of health care programs that are both beneficial for the consumers and health care providers. As such, the company aims to introduce the product to the Health and Human Services both for use in public hospitals and for endorsement to other hospitals and health care providers. It is important for the company to obtain the faith and trust of the state health team. The management knows that the right way to successfully market the product is by introducing it to the state’s premier health care group. The public hospitals and the state’s emergency health care department will definitely enjoy the benefits that the 911 Emergency Health Care System will bring. Next to tap are the local private hospitals and health care providers. There are over 200 hospitals, clinics and health care centers in Massachusetts (Massachusetts Hospitals 2011), and these are what management wants to tap to purchase the 911 Emergency Health Care System, starting from the major hospitals, down to the smaller centers. Basically, the product will appeal to hospitals that are already highly advanced in terms of information technology. The product will suit the requirements of hospitals that are keen on information and database management. Database management is important as it allows hospitals to develop their organizations and improve efficiency and quality of work and manage key processes effectively. 911 Emergency Health Care System addresses this concern as the product will allow hospital staff and physicians to spend more time of patient care rather than focusing on administrative tasks of record keeping and filling out forms. Individuals are indirect target market of the product. When we say indirect, it means that they are not being encouraged to purchase the product but since they will be the end users who will reap the benefit of the 911 Emergency Health Care System, it is important to get their confidence as well. During the introductory stage, there will be symposiums and forums that would focus more on individual benefits. In short, inasmuch as it is the bigger organizations that the company targets, it is the patient’s welfare that the company wishes to focus on. The patients will develop more trust on the health care organizations with innovations such as the 911 Emergency Health Care System. The company management will work hand in hand with its client hospitals and health care providers towards patient education. We want to develop the trust and confidence of the patients for them to continue coming to our partner hospitals for their health care needs. V. SWOT ANALYSIS Strengths of this product is the ability to register health coverage data on the scanner’s software database. There is also a two-year hardware warranty attached that will be part of the value proposition. “The information we offer is as much a part of our overall value proposition as the outputs of the operations” (Mitchell, 2010, p.27). Warranties act as strengths of guarantee that will assist in higher sales interest. Weaknesses are the higher price attached to the device, unavoidable due to the support needed and the operational production and materials needed to produce a single scanning device. It is currently not compatible with MAC applications in the launch phase. Opportunities include the ability to save lives where once there was more risk in this area and also the development of secondary compatibility enhancements (such as MAC) that will be developed over time with the assistance of IT support. Threats to this product include lack of universal standards for medical database storage and a current unfamiliarity with the market characteristics; however this will improve through experience and marketing research in the form of surveys and questionnaires. VI. SOURCING Retinal Scanning is an existing technology being used for Biometrics in high risk and high security areas. A Biometric system employs a pattern recognition system that performs identification by scanning through specific physiological and/ or behavioral characteristic possessed by the person in subject (Biometric Technologies – Introduction and Background 2011). There are several suppliers for this technology in the US and Europe. 911 Health Care Services Corporation will serve as an exclusive distributor of the product, and manufacture will be outsourced to cut on capital expenditures. The company has identified the retinal scanner manufacturer from Europe. 911 Corporation will perform software and product management while the device is outsourced from an external manufacturer. Initial deployment of the devices shall be under fixed quantities per quarter. This is to ensure that proper inventory management is being utilized. Setting up the software approximately takes a month prior to deployment. As such, lead time for the company is as follows: If the quantities being ordered are available, the delivery of the products and the set up of the software onsite will take five weeks upon receipt of purchase order If quantities are beyond the inventory level, the turnaround time is approximately 3 months from order placement to setting up of software onsite 911 Company’s role is to manage its inventories and establish a good relationship with the device manufacturer, and if applicable, to ally with contingency manufacturers to supply in case the demands are extremely high. Inventory management is top of the company’s list because management doesn’t want defy its objective of supplying a product that is time saving. The software and database development team is also an important group such that it is responsible in creating, modifying and setting up the software behind the device. There could be unique requirements from the target market, and the 911 company wishes to ensure flexibility of its software system. Since there might be variation in the client’s requirements, the IT team will be pivotal in achieving service level standards both for the company and the client-companies that would be using the device. The traffic department who will handle order taking and liaise between the sales and support teams will have to ensure that the inventory levels are parallel to market requirements, and that the right support programs are in place. VII. ALLIANCES VIII. BUSINESS MODEL Management will register the business as a corporation due to prospective tax benefits as compared to a sole-proprietorship (How to set up a business in Massachusetts 2011). Furthermore, there are five people behind the product concept, who each have their own areas of expertise and would like to invest the business in equal parts. The scanning device and software shall be delivered only upon receipt of a purchase order from the client. There will also be a software license and service agreement to exist between the company and the client. The scanning device will be purchased and will be owned by the client upon completion of payment. The software, however, will still be owned by 911 company and the client will only enjoy license. Succeeding maintenance will be supported by a corresponding maintenance support agreement to protect both parties from infringement or violations. The company’s head office shall be situated at the city of Boston. This is where the whole management team and the support groups will hold office. The company will rent four stories of work space, two of which to store databases and become office spaces for the Information Technology and software development teams. One floor shall hold the sales, marketing and business development teams, while the other one shall be the office space of the management team and the administrative, inventory, purchasing and finance teams. The same floor will hold the device inventory which will be monitored within threshold levels. The company shall be headed by a president and chief executive officer who will oversee the operations of the whole company. The president will be elected from among the five incorporators, and the rest will hold key positions in the company. The structure is as follows: 1. Business Development, Sales and Marketing Team – responsible for the sales and marketing aspect of the company. They identify potential new clients and develop the products according to the needs of the prospective buyers. They also ensure that existing clients are happy with their purchase. The team is to be headed by a Vice President, and will have three managers leading each department. 2. Customer Service, After Sales and Training Team – the team shall be responsible in handling after sales services and operate a 24/7 call center and customer service operations team to accept customer queries and even offsite assistance should the need arise. The team shall be led by a Vice President who will report directly to the President. The Training Team shall work hand in hand with the Sales Team to ensure that the product is well explained and users are well trained to use the handheld scanning device and the corresponding software programs. 3. Information Technology Team – Also to be led by a Vice President, there will be three departments functioning under this team: the Software Development Department, Technical Support and Technical Operations Teams. Software Development Team – Responsible in the development and enhancement of software programs that will serve as the foundation for the retinal scanning device. Technical Support Team – Responsible in the deployment of the software programs at the client’s preferred locations. Technical Operations Team – Responsible in the maintenance and support of the software onsite. 4. Finance and Inventory Team – Responsible in ensuring steady cash and inventory flow. Headed by a Vice President who will look after liquidity in terms of both cash and products, and will ensure zero wastage as well. Under this team will also be the Quality Control and Assurance Team who will establish service level standards for Operations. 5. Human Resources and administrative Team – To be led a Vice President, this team will handle the Purchasing and Administrative Teams. Purchasing department will be the focal point in the acquisition of products and servers, as well as internal supplies. The administrative unit will ensure internal support for all other groups. The Human Resource is as important as all other departments as it has to ensure that the right people are hired. Only the right people can bring the business to success. IX. INTELLECTUAL PROPERTY Retinal Scanning Technology is an existing product being used for Biometrics and employee identification, particularly for high risk areas. In fact, it was discovered as early as 1976 (Retinal Scan 2011). In the medical field, this technology is now being used for diagnostic purposes as some sicknesses may be identified through obvious changes in one’s retina. This product being introduced integrates the current functionalities of this technology, with the aim to particularly serve the need of the health care segment to come up with an accurate but fast way to do patient identification. Appropriability is high since this is an existing technology. However, the benefits that clients are able to reap are dependent on the software development and the IT backbone/ support behind this device. David Teece, through his model of innovation, says that two factors – immutability and complimentary assets – will have strong influence in determining who will gain profit in an innovation (Teece Model of Innovation 2011). 911 Health Care Services Corporation will engage in software licensing to ensure that its intellectual property rights are not violated. It cannot lay claim on a technology that has been utilized for almost 40 years now, but it can protect the software and database programs that support the device and the retinal scanning technology itself. X. COMPETITION AND DIFFERENTIATION “Strategic marketing starts with understanding who your customers are and what is important to them” (ignitemarketinggroup.com, 2009, p.1). Innovation and quality are the competitive edge in a market where there is no dominant force with a technology that could match or rival the retinal scanning device. Edge is then achieved by linking business needed with product quality and viability and then selling these points in direct selling and advertisement. It is also an edge to reinforce corporate social responsibility as the business will be donating a portion of profits to third world countries with limited health care services. “Business operations are undeniably linked with trust-building with community people where the operation is based” (wcdr.gfdr.org, 2007, p.4). CSR will be a major selling strategy in the hospitals and clinical environments that are already dedicated to improving the well-being of citizens domestically and internationally. Sales strategy will consist of the creation of a dedicated website that is interactive and allows potential buyers to view a virtual snapshot of the device to gain understanding of its functions and quality. The site will be equipped with a blog and email system so that customers who have purchased the product can offer their testimonials. This will be monitored regularly to ensure that negative postings are removed to ensure a better brand reputation in the virtual environment. Social media will also be explored as it represents low-cost and effective advertising if it is linked with sites associated with health care or sites that offer expert lecturing on new medical technologies and procedures. Brand alliances with well-known hospitals will also be part of sales strategy, developed through direct sales. Dedicated salespersons with detailed knowledge of the product will make appointments with important decision-makers in the hospital and clinics where they will conduct formal presentations about functionality, risk reduction, cost savings, and efficiency as key selling points. Other advertising will be conducted in print form in reputable health care magazines and other publications on an as needed basis if direct salesmanship does not return desired profit results. In the personally-owned clinical environment, attempts to reinforce the value of retinal scanners in multiple formats will be presented in both formal and informal meetings with top-level buyers. The product has a very long life cycle on the market since there are currently no technological competitors. Promotion of the product will begin prior to launch and evolve as sales progress. Pre-launch advertising duration: 14 weeks Magazine advertising: 24 weeks in early launch phase Direct salesmanship: ongoing throughout product life cycle XI. Prototyping and patenting As mentioned, retina scanning is an existing technology already being used for identification purposes. The innovation that will be introduced is the software and database part, which would enable this technology to store more data than usual and link this data to an identified person. Softwares are covered by a license, and prior to prototyping, a User Acceptance Test will be conducted to ensure that the product goals are met. Same is true for every software enhancement that would be done depending on the needs of a client. Google patents makes available to the public particular products which manufacturers applied patents for. This is a good venue for manufacturers to check on the existence of particular products in the market, and under what stage of creation/ manufacture they already are. XII. FEASIBILITY Start up costs is pegged as follows: Office Rental $ 50,000 Office Space Renovation $ 200,000 Information Technology, Server and Software Development/ Acquisition $ 1.2 M Office Equipment and Furniture $ 80,000 Advertising and Promotions $ 30,000 Permits and Licenses $ 5,000 Initial Inventory $ 300,000 Other Expenses $ 23,000 Human Resources Allocation $ 400,000 TOTAL $ 2,288,000 Profit and Loss Analysis:   Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Projected Beginning Balance Loans and Capital             Start Up Investment $ 3,000,000.00           Balance Carried Over/ Start Up Cash $ 5,000.00 $ 779,000.00 $ 1,033,000.00 $ (177,500.00) $ 1,633,000.00 $ 420,500.00 Sub Total - Loans and Capital $ 3,005,000.00 $ 779,000.00 $ 1,033,000.00 $ (177,500.00) $ 1,633,000.00 $ 420,500.00 Projected Sales Device   $ 500,000.00 $ 600,000.00 $ 700,000.00 $ 800,000.00 $ 900,000.00 Software   $ 1,000,000.00 $ 1,200,000.00 $ 1,400,000.00 $ 1,600,000.00 $ 1,800,000.00 Sub Total Projected Sales $ - $ 1,500,000.00 $ 1,800,000.00 $ 2,100,000.00 $ 2,400,000.00 $ 2,700,000.00 Projected Beginning Balance $ 3,005,000.00 $ 2,279,000.00 $ 2,833,000.00 $ 1,922,500.00 $ 4,033,000.00 $ 3,120,500.00 Projected Expenses Equipment and Materials             Architecture and Renovation $ 200,000.00           Phone Line Connection/ Connectivity $ 3,000.00 $ 1,000.00 $ 1,000.00 $ 1,000.00 $ 1,000.00 $ 1,000.00 Other Office Machines $ 5,000.00   $ 5,000.00   $ 5,000.00   Personal Computers $ 10,000.00         $ 5,000.00 Office Furniture $ 7,000.00           Stationaries/ Letterheads $ 500.00   $ 500.00   $ 500.00   Signages $ 500.00           Registration and Rental Costs             Business Registration Costs $ 5,000.00       $ 2,000.00   Office Space Rental $ 50,000.00 $ 50,000.00 $ 50,000.00 $ 50,000.00 $ 50,000.00 $ 50,000.00 Manpower Costs             Manpower $ 400,000.00 $ 400,000.00 $ 400,000.00 $ 400,000.00 $ 400,000.00 $ 400,000.00 Ads and Promo Costs             Print Ad $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 Sponsorship Budget $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 Website Creations and Hosting $ 3,000.00   $ 3,000.00   $ 3,000.00   Brochures/ Flyers/ Business Cards $ 2,000.00   $ 2,000.00   $ 2,000.00   Others $ 25,000.00 $ 1,000.00 $ 1,000.00 $ 1,000.00 $ 1,000.00 $ 1,000.00 VAT   $ - $ - $ - $ - $ - Total Inventory Costs $ 1,500,000.00 $ - $ 1,500,000.00 $ - $ 1,500,000.00 $ - Products $ 500,000.00   $ 500,000.00   $ 500,000.00   Software Licenses $ 1,000,000.00   $ 1,000,000.00   $ 1,000,000.00   Total Projected Expenses $ 2,226,000.00 $ 467,000.00 $ 1,977,500.00 $ 467,000.00 $ 1,979,500.00 $ 472,000.00 Net Income $ 779,000.00 $ 1,033,000.00 $ (177,500.00) $ 1,633,000.00 $ 420,500.00 $ 2,228,000.00 Reference List Biometric Technologies – Introduction, Background. Retrieved May 15, 2011 from http://encyclopedia.jrank.org/articles/pages/6556/Biometric-Technologies.html Demographics of Massachusetts. Retrieved May 15, 2011 from http://en.wikipedia.org/wiki/Demographics_of_Massachusetts Health and Human Services. Retrieved May 15, 2011 from http://www.mass.gov/?pageID=eohhs2agencylanding&L=4&L0=Home&L1=Government&L2=Departments+and+Divisions&L3=Department+of+Public+Health&sid=Eeohhs2 How to setup a business in Massachusetts. eHow money. Retrieved May 15, 2011 from http://www.ehow.com/how_6217375_set-up-corporation-massachusetts.html Ignitemarketinggroup.com. (2009). “Strategic vs. Tactical Marketing”, Ignite Marketing Group. Retrieved April 3, 2011 from http://www.ignitemarketinggroup.com/uploads/Strategic_vs_Tact ical_Marketing.pdf Massachusetts Hospitals. The Agape Center. Retrieved May 15, 2011 from http://www.theagapecenter.com/Hospitals/Massachusetts.htm Mitchell, Alan. (2007). “Effects of Price Promotions on the Perceived Price”, International Journal of Service Industry Management. 18(3), p.269. Retinal Scan. Wikipedia. Retrieved May 15, 2011 http://en.wikipedia.org/wiki/Retinal_scan Study finds no progress in safety at hospitals. Retrieved May 15, 2011 from http://www.nytimes.com/2010/11/25/health/research/25patient.html Teece Model of Innovation. OPPapers. Retrieved May 15, 2011 from http://www.oppapers.com/essays/Teece-Model-Innovation/162022 wcdr.gfdr.org. (2007). “The corporate sector role in disaster and environmental management: beyond corporate social responsibility”, Kyoto University. Retrieved April 2, 2011 from http://www.wcdr.gfdr.org/imgs/pdfs/White_Paper_on_the_Corporate_Community_Interface__CCI_.pdf Read More