Care Group Essay

What was the underlying cause of the collapse of the system?

One may infer that the collapse was triggered due to the new knowledge management application, which was designed to copy information across network automatically, which led to the monopolization of the main switch and consequently to the system collapse. But the primary reason of collapse was CareGroup’s weak telecommunication network which was not prepared to handle such large volumes of data as it was out dated and no steps were taken to upgrade it. The CaseGroup network had several instances of more than 7 network segments connected by bridges or switches which resulted in the relaying of the same message to and fro between the primary and backup pairs. CareGroup not only was consistently cutting their IT operating expenses from $50 million in 1998 to $25 million in 2001 (Ex. 3), but also was consistently reducing their IT capital expenditure from $30 Million in 1998 to a meagre $5 Million in 2001.

Cisco was asked to conduct a study on CareGroup’s overall network. A month before the collapse, Cisco delivered its report recommending the modernization of network. No action was taken on this recommendation as CareGroup felt that it didn’t pose any immediate threat to the system. This event suggests that they were not willing to make investments in upgrading their systems. Their low IT capital expenditure as well as low IT operating expenses indicates that they were not aware of the importance of keeping pace with evolving technology and keep investing in it. They did not upgrade their network which was considered state of the art in early 1990’s but had become fragile by 2002.

CareGroup heavily relied on a small team to handle their IT operations. They reduced their IT staff from 380 in the year 1998 to 200 by the year 2003. The impact of this can be seen in the collapse of the system as one researcher who experimented with the knowledge management application was solely responsible for the application and others were unaware about it. Had there been enough IT staff, dedicated team of network experts and proper investment in upgradation of the network, the collapse could have been avoided.

Evaluate carefully the 10 lessons that John Halamka learned from the experience. Are these the right 10 lessons? Are there other learnings that come from this situation?

The first lesson that Halamka stated was not to hesitate to contact the experts. We feel this is the most important lesson that the CareGroup’s IT team must have learnt. They waited 24 hours after the systems had collapsed to call in Cisco. And during those 24 hours they tried to restart the network without knowing what exactly the root cause of the problem was.

The second lesson that Halamka realized was not relying on any individual too heavily. This was also one of the most important lessons to be learnt. CareGroup’s networking guru on whom they relied heavily had left just before the outage happened. Had they diversified his work among different individuals, those individuals would have been in a better position to react when the outage happened. Third lesson that he stated was to be updated with current knowledge. They not only relied too much on a single individual but also allowed him to become outdated to the current technologies.