Friday, February 13, 2009
Component Based Businesses
We read an article about SOA for yesterday's class. It broke businesses done into individual services, and described how each could be its own entity; its own money-maker. After the lecture, I second guessed my complete understanding of the topic, but I started to see how I could apply the idea to my most recent employer. I worked at Mayo Clinic in Rochester, a health care provider that has more than 70 different departments or specialties. Combined, all these areas make up the revenue for Mayo, and this is how their profits are determined. About a year ago, Mayo recorded its first net loss for a quarter in some time. They, much like many other corporations, issued cutbacks and tightened their belt a couple notches, wishing to wait out the economic storm. What was interesting, however, was that some departments (i.e. Cardiology) continued to make a profit, even though Mayo as a whole was in the red. The way these departments made money is quite simple, the more patients they saw, procedures they ran, etc. the more profit they brought in. Beyond that, the more physicians they had on staff, the more patients they could see. I'm sure its more complex than this, but if Mayo had instead of making cutbacks everywhere, reallocated funds to certain departments which remained profitable, they may have shown a better return in future quarters.
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