IT in the House

I was recently interviewed by For the Record magazine about why many hospitals and their CIOs are choosing to bring their IT projects inhouse. Here’s how Elizabeth Roop began the article:

It may be too soon to call it a bona fide trend, but there is a change underway within some hospital IT departments, where they are bucking tradition and handling projects internally rather than outsourcing them to vendors or consultants.

The reasons vary. In some instances, facilities want to maintain better control over what they consider the most important aspects of their IT infrastructure. In others, it’s a desire to reduce reliance on vendors for ongoing maintenance and, in some instances, to reduce costs.

Elizabeth’s premise was interesting and I was happy to provide my thoughts on why it makes sense not to outsource IT in some cases (especially when it’s a strategic requirement).

Let me know what you think about it and whether you agree with my points.

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9 thoughts on “IT in the House

  1. I’m curious what data you have to support your claim. All indications are that outsourcing is becoming MORE prevalent, not less.

  2. Van, great question. Most of the data that I have collected is anecdotal based on my clients and their current plans.

    I totally agree with you that the trend is showing increased outsourcing (which I do favor in most cases) but my point was that sometimes it makes sense to bring IT in the house, especially when IT can make a strategic difference.

    Here is one of my points from the article: “when technology is strategically important to the mission of a hospital, like in an academic center or similar place, then you see hospitals outsourcing less and taking more control,” Shah says. “When they do relinquish control to vendors and consultants, they do so because they don’t see it as being important to their mission. It’s just a cost of doing business.”

    Of course, if portions of IT are non-critical or not game-changing or not pivotal to the central mission of the hospital (patient care) then it’s a good idea to outsource.

  3. Not necessarily — I was more commenting on the outsourcing of IT functions (not just development). For example, many organizations are looking to outsource help desk, application management, desktop support, etc. There’s no simple formula for whether to outsource or not but I would say the more strategic something is to the mission, the more favorable “insourcing” should be.

  4. I think that’s where the problem is – figuring out “the strategic importance” piece. It’s quite hard to do that w/o having a very clear idea of what the goals are and what the strategy to accomplish them is. Unfortunately, it is where lots of our hospitals are today: lacking clear goals, lacking strategy and lacking skills. To outsource or not is a secondary issue. As long as “..the best use of our money is to make the best use of the money we’ve already spent..” – we will continue to have a problem.

  5. I’m always interested in your topics, but I have nothing to add to the conversation. All I know is the frustration and delays involved with any custom programming job for our vendor-supported systems.

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