Anticlue

Costs of Quality

Have you ever had the sneaking suspicion that the continued outsourcing of IT related work is a key by-product of our overall lack of customer service. In healthcare IT and having a perspective from just one organization, it is at times a thought that is disconcerting.

I also look at our delivery timetables and I continue to be puzzled. How can we as an organization take a year to generate a single report, or add an additional data value into the system. I don’t know how we will ever improve if it isn’t even an item we measure.

Examining the four categories of cost associated with cost of quality, COQ: prevention costs, appraisal costs, internal failure costs, and external failure costs, how many are actively utilized in an Healthcare IT department?

Prevention costs are costs incurred by attempting to proactively prevent poor quality. Training, capability studies, vendor surveys, and quality designs are preventative measures that improve the quality of work delivered.

Appraisal costs are costs incurred when an organization is inspecting or testing the quality of the services it supplies to its customers. Appraisal costs can be the inspection and testing of a product to assure it meets the project objectives. Perhaps even having tools or test equipment in place with resource expended to validate we are testing according to a valid script. Also reporting the findings of testing and inspecting is a cost categorized under appraisals. Perhaps even having a review of the test script with the customer base would apply here.

Internal failure costs are incurred by rectifying product defects in the implementation or how the project faired when moved into production. These costs are associated with rework, design changes, cosmetic usability changes and an excess backlog of requested work. Remember the last time you where paged at home for a production issue - another example of the soft costs of internal failures.

External failure costs are incurred when resolving a customer issue. These include break/fix requests, customer complaints, customer training, lost business, and lost reputation.

A friend of mine has a poster in her cube that states sign your work with quality, when I consider the costs of quality: the prevention costs, the appraisal costs, the internal failure costs, and the external failure costs. I can’t see how as any service delivery organization could expect customer service excellence without incurring any of these costs.