KLAS Finds Partial IT Outsourcing On The Rise - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Healthcare // Analytics

KLAS Finds Partial IT Outsourcing On The Rise

With a majority of healthcare groups using such services, the key to success is knowing what services to send out and what to keep in-house.

Healthcare IT Vendor Directory
Slideshow: Healthcare IT Vendor Directory
(click image for larger view and for slideshow)
Sixty percent of healthcare organizations that have engaged a firm for discrete IT services reported seeing more value for their IT dollars since outsourcing, according to a new KLAS report, "IT Outsourcing: Better Service In A Shifting Market."

Not surprisingly, partial IT outsourcing is on the rise, according to Mike Smith, services research general manager at KLAS and author of the report. What's interesting to note, however, is that some of that growth has come at the expense of full IT outsourcing arrangements. Smith says as many as 50 hospitals have either reduced or eliminated such arrangements.

"The reality is there are certain key areas that are very, very strategic--such as maintaining applications that are critical to achieving meaningful use--where, if they have the talent or can leverage their own resources to handle it, in certain instances, we are seeing those pieces brought back in-house," he said.

To free up that in-house talent, some hospitals are outsourcing functions such as help desk and legacy application management. "Since meaningful use and ICD-10 are pulling resources, time, and focus, hospitals are looking to outsource certain pieces that are not strategic," Smith said.

CTGHS topped all other firms for partial IT outsourcing. CareTech came in first in the ranking for extensive IT outsourcing and second for partial ITO. Findings for Accenture, Allscripts (now Eclipsys), Anthelio, ACS, Cerner, CSC, McKesson, and Phoenix Health Systems were also included in the report. CareTech, Dell, and Siemens ranked in both the partial and extensive ITO categories.

Although there has been some movement from full to partial ITO, and even to no ITO (as some providers have taken all IT services in-house), the firms’ overall performance trends in almost all cases have improved since 2008, according to KLAS.

Smith said a key to outsourcing success is for both parties to strike a fair arrangement, put as much as possible in the contract, then approach the challenges that will inevitably arise during a multiyear relationship--especially those that fall outside the purview of the contract--in good faith and with good will.

He added that, especially when it comes to larger deals, customers expect the vendor's executives to be available and responsive, while the vendor itself should share best practices gleaned from working with its overall client base.

"Clients expect service providers to offer good, thoughtful feedback to them and strategic advice," Smith said. "Some are good tactically at keeping a box up and running, but not as good at strategy. If you can do both, while sharing with them what you seeing from other clients--things they should be doing for ICD-10 and meaningful use--satisfaction will he higher."

Anthony Guerra is the founder and editor of healthsystemCIO.com, a site dedicated to serving the strategic information needs of healthcare CIOs. He can be reached at [email protected].

The Healthcare IT Leadership Forum is a day-long venue where senior IT leaders in healthcare come together to discuss how they're using technology to improve clinical care. It happens in New York City on July 12. Find out more.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
CIOs Face Decisions on Remote Work for Post-Pandemic Future
Joao-Pierre S. Ruth, Senior Writer,  2/19/2021
11 Ways DevOps Is Evolving
Lisa Morgan, Freelance Writer,  2/18/2021
CRM Trends 2021: How the Pandemic Altered Customer Behavior Forever
Jessica Davis, Senior Editor, Enterprise Apps,  2/18/2021
White Papers
Register for InformationWeek Newsletters
Current Issue
2021 Top Enterprise IT Trends
We've identified the key trends that are poised to impact the IT landscape in 2021. Find out why they're important and how they will affect you.
Flash Poll