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Survey: 52 Percent of Healthcare CIOs Expect Increases in IT Spending

November 3, 2016
by Heather Landi
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More than half of healthcare CIOs anticipate increases in IT budgets in the next 12 months, which outpaces other industries, yet healthcare CIOs also face significant skill gaps in data and analytics, project management and change management.

The healthcare CIO survey results are part of findings from the Harvey Nash/KPMG CIO survey 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 from the Harvey Nash/KPMG CIO survey indicates that healthcare IT budget growth is outpacing the broader industry. 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.

Of the healthcare executives surveyed, 80 percent said they see a growing strategic role in their organization compared with 67 percent from all industries. Despite this more strategic role, only half of the respondents said they have a “clear digital business vision and strategy.” One-third of healthcare companies report having an enterprise-wide digital business strategy and vision and 18 percent report having a digital business strategy within business units, compared to 50 percent and 58 percent, respectively, for all industries. The survey found that 39 percent of respondents were currently working on a digital business strategy.

“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. “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.’”

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. For example, 45 percent of healthcare CIOs see a skills gap in big data/analytics compared to 39 percent of CIOs in the all-industries average.

The survey results also indicated that healthcare companies place a higher priority on increasing operational efficiencies, improving business processes and delivering business intelligence/analytics than the all-industries averages. When asked what are the key business issues that management boards are looking for IT to address, sixty-four percent of healthcare CIOs said increasing operational efficiencies and 63 percent said improving business processes. Sixty percent said delivering business intelligence/analytics and 52 percent said delivering consistent and stable IT performance.

Healthcare companies also are taking steps to become more agile and responsive. According to the CIO survey results, healthcare companies are more likely to utilize strategic partnerships (41 percent vs. 32 percent for all industries) and multi-mode IT (34 percent vs. 27 percent), and less likely to utilize DevOps (19 percent vs. 28 percent).

Cloud computing is gaining interest from healthcare organizations, the survey findings indicate. Healthcare CIO survey respondents found that the top three reasons for using the cloud were to “improve availability and resiliency” (45 percent), “best solution available” (35 percent) and to “improve agility and responsiveness” (34 percent). Healthcare CIOs are more likely to face challenges to cloud adoption due to legal and regulatory compliance issues, cited by 42 percent of respondents, and concerns over business continuity and disaster recovery, cited by 21 percent of respondents. More than half of healthcare CIO cited data loss and privacy risks and integration with existing architecture as top challenges when adopting cloud technology.

“Healthcare organizations are continuously confronted with new regulatory challenges and evolving business models that are forcing them to change the way they think about leveraging technology toward the cloud and digital labor that can change how work is done,” Vickers said in a statement. “Some of these changes can remove costs through automation and provide greater insight into their business from data & analytic tools. All of this is putting more pressure on CIOs to quickly and effectively sort through the best new technologies and implement them to engage patients and deliver greater efficiency. So the CIO’s role is becoming much more creative, strategic and a key to transformation in healthcare.”

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