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KPMG Leader: “The Healthcare CIO is in a Very Tough Spot”

January 13, 2017
by Rajiv Leventhal
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A recent survey reveals noteworthy findings about healthcare CIO budgets and strategic visions

Last fall, findings from a Harvey Nash/KPMG CIO survey across various industries revealed that more than half of healthcare CIOs anticipate increases in IT budgets in the year ahead, though these same patient care organization leaders reported they also face significant skill gaps in data and analytics, project management and change management.

As Healthcare Informatics Assistant Editor Heather Landi reported in November, the Harvey Nash/KPMG CIO survey consisted of 3,400 CIO respondents across a number of industries and in 82 countries. The healthcare industry sector snapshot provides survey responses from 190 healthcare industry CIOs. The findings indicated that healthcare IT budget growth is outpacing other sectors. “In addition to the 52 percent of healthcare CIOs who see increases in IT budgets in the next year, 35 percent expect unchanged budgets, and this compares with 45 percent of CIOs across all industries anticipating an increase in IT budgets and 33 percent expecting IT budgets to remain unchanged,” Landi reported.

Nonetheless, it’s noteworthy that although 80 percent of healthcare CIOs said they see a growing strategic role in their organization, just one-third of healthcare companies reported having an enterprise-wide digital business strategy and vision. The survey also revealed that the healthcare sector lagged industry averages in key technology skills. Healthcare companies face the greatest skills shortages in big data/analytics, project management, change management and security and resilience. And, healthcare CIOs reported greater skills gaps in these areas compared to the all-industries average, Landi reported.

“Despite significant increases in IT spending in recent years, the maturity of IT investment in healthcare is still lagging versus other industries and healthcare companies know they need to catch up,” Vince Vickers, KPMG LLP’s healthcare technology leader, said in a statement with the release of the survey. “Healthcare organizations have significant operational cost pressures now more than ever, and there is an opportunity to close that gap quickly with disruptive technologies and analytic tools that open the door to the notion of the ‘creative CIO.’”

To dive deeper, Vickers recently spoke with Healthcare Informatics Managing Editor Rajiv Leventhal about the report’s findings, what the biggest takeaways were and how CIOs’ operations and processes will change moving forward. Below are excerpts of that interview.

This survey featured thoughts from a lot of CIOs across all industries, with nearly 200 just from healthcare. The slight majority of healthcare CIOs see increases coming in their IT budgets. What were your takeaways from this?

I don’t think anything from this survey is too surprising. Having data is obviously helpful to validate the anecdotal stuff you hear every day. I meet with two to three CIOs every week, so it’s good to get the formal data to validate your thoughts. While Harvey Nash and the survey has been great for us, that pool of healthcare [they use] is pretty far reaching, so keep in mind that it’s not just providers or payers—converged life sciences fall into it, too. We are going to be much more targeted on the provider side going forward by taking a subset of this survey and playing that back via our CHIME relationship, who we do surveys with every year. If we get half of CHIME participants to respond, so 200 or 300 healthcare provider organization CIOs, it will be very interesting to see that data.

For the CIOs planning budget increases, where will they be directed? What are the biggest areas of need?

This is more anecdotal; this specific questions we have are what we are asking CHIME to validate. So this is more of my gut feeling before we get these survey results, but cybersecurity is huge right now and we expect that trend to continue. Everything around the cloud is big; I am really finding it interesting how much activity we have now with assessments and road mapping around cloud application work. It seems like we have a group that has gone out and spent a ton of money, effort and energy on their EHRs, and there certainly is an ongoing optimization exercise occurring there, and because the cost pressures continue to mount, [folks] have pivoted. They are challenging themselves to figure out how to move to a cloud-based app that reduces support spend and also helps continue to get value out of relationship with the software vendor with “regular automated updates” as opposed to large expensive upgrades. I find it interesting that just 18 months ago, we would have CIOs and CFOs with strong objections to the cloud due to security, but because of the cost pressures now, they are looking very seriously at it. This is a very active marketplace for us and I expect this CIO survey to validate that.

Vince Vickers

How can one resolve, or at least mitigate, the concern over security when at the same time move to the cloud?

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