Introduction
The new technology creates great opportunities for North Island Hospital to compete in the medical market and deliver the best services to its customers. The case suggests that the cost of technology is high and it will need careful analysis of pros and cons. In order to assess and evaluate effectiveness of the proposed investments in new technology, Financial Key Performance Indicators (FKPIs) will be used. This method of financial analysis is intended to analyze of the financial performance of the proposed collation (Harris 1989).
Model identification
In the case of North Island Hospital, the financial ratios are applied to the market to examine current achievements and trends. In addition, these data will be applied to competitors to identify external benchmarks’ of performance. The analysis will involve charges to patients and the cost of technology for the hospital. The question of Profit Generation shows that implementation of new technology will be beneficial for the hospital and will be repaid in twp years approximately. The proposed solution is good at generating profits. The question of Cash Control shows that the hospital is successful to meet its commitments. It means that new laser technology will help it to meet customers’ needs and demands and improve healthcare facilities in the region. The issue of Asset Utilization allows saying that the hospital does well to utilize its assets and ensures operational efficiency. The cost of new laser is NZ $ 1,500,000 but it will be repaid in two years if the number of patients remain the same (100 per year) (Johnston and Graham 2008). If the hospital attracts new customers from other areas of the New Zeeland, the new laser will be repaid in a shorter period of time (Cawford 2002).
Description and Analysis
Also, it is important to take into account that the new technology will position North Island Hospital as a premium facility with innovative and unique services. This image will help to attract more customers and generate more profit. Throughout the hospital there needs to be a focus on both external performances (how the patient is satisfied) and internal performance (Naylor 2002). Patients are usually concerned with three aspects: From an internal perspective the main factor of performance and success is widely acknowledged to be the competence and commitment of the medical staff at all levels. Financial Key Performance Indicators (FKPIs) allows to say that the hospital will benefit from buying this technology and will generate more money for other projects (Drejer, 2002). The proposed model is important and efficient as it takes into account financial indicators and competitive environment. To examine the performance of the hospital, and its competitors, the assessment ratios are applied. The model provides a definition of the ratio plus brief guidance notes to support interpretation. Measures the effectiveness with which the hospital invested in the new technology are used to generate sales income. The trend of achievement will be monitored by the hospital staff as well as comparison to other similar projects (Drejer, 2002).
Conclusion
In sum, the case shows that financial analysis is effective if it is combined with competitive analysis and assessment of market opportunities. The case of new laser technology, the level of return is sufficient to ensure that borrowing can be serviced, Reinvestment can take place for the development of the hospital and equity shareholders can receive a satisfactory return. In addition, the decision to purchase the technology is driven by the demands of the patients. The new technology will help the hospital to create a unique image and provides innovative services and treatment to diverse customer bases.
Bibliography
Crawford C. Merle. 2002, New Products Management. Irwin-McGraw Hill. 7th edition.
Drejer, A. 2002, Strategic Management and Core Competencies: Theory and Application. Quorum Books.
Harris N. 1989, Service Operations Management, Cassell.
Johnston, R. and Graham Clark. 2008, Service Operations Management.
Naylor J. 2002, Introduction to Operations Management, 2nd Edition Pearson Education.