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I. Summary
As the healthcare industry approaches IT operations, an increasing number of healthcare organizations tend to use outside vendors to achieve IT excellence. A research conducted amongst US and Canadian hospitals with fully outsourced IT explored the hospital full IT outsourcing market first. Midsized hospitals with 201-501 beds were most apt to pursue full outsourcing and they accounted for almost half of the participant organizations. The four general categories of IT outsourcing services providers were identified. Thereafter, the research revealed the reasons why hospitals preferred IT outsourcing. The lack of competent IT resources—internal IT management team urged these organizations to ask outside professionals for help. The desire for improved services of systems, reduced costs and successful implementation accelerated the outsourcing. The hospitals stood to benefit by the outsourcing due to improved service levels, the depth of outsource partner’s IT skills, lower costs, more expertise in IT as well as stronger IT staff and leadership. The hospitals suffered most from pitfalls like resource staffing issues which would cause frequent IT management changes. Some of the participants encountered resistance to the initial transition to outsourced IT, internal cultural changes and difficulties in managing the agreement with outsourcers. Poor performance of the outsourced IT team, the increasing costs, the lack of control and the cultural clash compelled some providers to discontinue outsourcing. If an opportunity were to be given to start over, most participants would focus more attention on contract details for better services. Some, however, gave directly opposite response—nothing to change. A ...