NOV 11, 2008 11:14am ET

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Trends in I.T. Outsourcing

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In the early 20th century, most factories had their own power plants; now they get their power off the grid. When it comes to I.T. infrastructure, hospitals at the turn of the 21st century are making a similar, belated transition, says George Brenckle, CIO at UMass Memorial Healthcare.

“More and more hospitals are concluding that they don’t need to run their own data center to accomplish what they want to achieve,” the CIO says. “They’re concluding they should focus on delivery of applications to meet business objectives.”

UMass, like a growing number of hospitals and integrated delivery systems, has outsourced its I.T. infrastructure while continuing to use internal staff to manage its software.

Good Samaritan Hospital in Vincennes, Ind., is taking a similar approach. “Managing desktop computers and answering the help desk phone aren’t part of the core work that the I.T. department should be doing,” argues Charles Christian, the hospital’s CIO. “We should be working on understanding care processes and business processes and how we can support them. Managing what PC is rolled out to what desktop today is not something I should be worrying about.”

It’s relatively easy to set up measurements for whether an outsourcer is succeeding with infrastructure projects, Brenckle contends. For example, a hospital can measure help desk response times and monitor how often a network crashes.

In contrast, he argues, measuring whether an outsourcer is meeting expectations for managing applications is much more challenging. “Are you making the software do what I want it to do? That’s tougher to measure.”

Nevertheless, a few hospitals are outsourcing virtually their entire information technology departments, including management of both infrastructure and applications, for a wide variety of reasons.

To read the complete November Special Report on outsourcing click here.

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