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Part(nership) 1 of 10: Sourcing

October 27, 2008
by lstofko
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Insourcing, outsourcing, multi-sourcing??? Determining the best “strategic sourcing partnership” for your organization can increase service and move you forward. Just prior to Y2K we made the decision to enter a long term comprehensive outsourcing agreement. The key objectives where to increase IT service quality, have a positive economic impact, have additional access to skilled professionals, and allow our retained IT team to be more well positioned to focus on the future. Finding the right mix in how the IT function is sourced continues to be more of an art than a science. It is an area that should not fall prey to the dreaded “pendulum swinging back and forth” with IT leadership changes, but a strategy that evolves over time with your business environment and needs.

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Larry: I agree with the key objectives you lay out here, these seem to point the way to which functions could benefit from outsourcing for your organization and which do not. In 1999 you probably did not find the kind of canned SaaS offerings that exist today, I suspect these were more amorphous service offerings that you had to work hard to define for the agreement.

In terms of art versus science, I found in two instances of outsourced services (ERP hosting and data center hosting) that the first outsourcing partners helped to refine the service levels and other criteria desired and led to signing on with different service providers when the initial contracts expired. The initial experiences definitely increased the urgency to closely define needs and requirements to a much greater degree as there is little room to change the relationships during the term of your contract.

Larry, I was talking about this exact thing yesterday at our editorial meeting. Do you think that this might create a type of 'it's more expensive to be cheap' dynamic that will end up hurting patient care?

lstofko

Larry Stofko examines important IT issues in healthcare from his perspective as CIO of St....