Soft Returns of Investment
There are three steps that are needed to document soft returns: Identifying a process improvement opportunity, create a formula to calculate the benefits, and determine the costs of the process and the net benefits. Besides the three steps, there are various benefits for implementing EHR, such as improving the safety, quality, effectiveness and efficiency of care to meet patients ' expectations (satisfaction). In other words, the contribution of EHR in health systems can enhance organizations ' performance (Smith, 2009).
According to Pecht & Jaai (2012), “soft return” on investment works as indicators that provide the right measurement of intangible benefits for investors, such as improving reputation, customer connections and influencing public image in projects without estimating the financial or physical benefits. On this returns, when documenting the justification of soft returns, the process includes soft costs (risk avoidance, patient safety, process improvement, client goodwill, regulatory compliance and support costs). Undoubtedly, Soft analysis can measure all these benefits through the three steps that process soft return documents: (1) Identifying the Process Improvement Opportunities, (2) Create a Formula To Calculate The Benefits and (3) Determining the Cost Of The Process And The Net Returns.
Identifying the Process Improvement Opportunities
It is really challenging to find and define right chances that are used to improve the process, especially when having insufficient resources; however, organizations usually focus on saving costs as possible as they can. In fact, the best approach while having scarce resources is to find areas of improvement and come up with ideas to improve the proce...
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...eting tool that show the differences between the present value of revenues and the present value of expenses. The project can be profitable when the net present value is positive. In other words, the present value of revenues is greater than the present value of expenses. Profitability index is another tool for evaluating investment projects, which is the ratio of the PV of benefits on the PV of costs. A project can be beneficial if the profitability index is greater than 1. Also, it has the same idea as NPV that In other words, the present value of benefits is greater than the present value of costs. However, these two methods (NPV and Profitability Index) have been used to evaluate the proposal of implementing EHR.
The following table demonstrates the PV of costs, the PV of benefits and the NPV respectively, over 5-year period for the investment:
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