KLAS: Providers Scaling Back On IT Outsourcing

Providers are stepping away from outsourcing - but not completely.

Providers are stepping away from outsourcing – but not completely.

As organizations face mounting pressures to meet meaningful use requirements, providers are pulling back on extensive IT outsourcing services and turning to partial outsourcing agreements to meet growing demands, according to new data from KLAS.

The report — IT Outsourcing 2013: Who Can Help with Rising IT Pressures — identified application management and help desk as the most pressing needs for organizations outsourcing discrete IT functions. Siemens and Xerox scored the highest marks in providing support for legacy applications, while CareTech and Xerox garnered top scores for help desk support.

Not surprisingly, KLAS data showed that the majority of extensive IT outsourcing engagements are with smaller organizations (100-500 beds) who often have limited internal IT resources and difficulty attracting and retaining IT staff. Two services — disaster recovery and security — are becoming a higher priority, with both represented for the first time in the report.

Vendor performance, however, is in question, as a number of firms have experienced drastic changes in satisfaction scores over the past two years, a sign that providers’ needs are not being met, according to KLAS.

“Providers are really looking to IT outsourcing to assist them with their IT strategies, more than they have in the past. Most of the activity is seen in partial IT outsourcing with some movement in extensive IT outsourcing,” said Erik Westerlind, report author and research director at KLAS. The report aims “shed light on which vendors are positioning themselves to help providers navigate the IT demands that stem from the federal government’s initiatives,” he added.

Vendors ranked in the report include CareTech, Cerner, CSC, CTG, Dell Services, McKesson, Siemens and Xerox.

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