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Selling Your Soul: Part Two

December 22, 2009
by jlee
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Yesterday I made the observation that there are healthcare organizations around the country who have abdicated their duty to manage their IT operations responsibly. Sometimes it’s hard to tell the difference between those who are doing legitimate outsourcing and those who are selling their soul to their vendor.

Let me talk a little about the general principles that are important to keep in mind when you’re evaluating your vendor relationships…

Don’t overgeneralize from other industries.

Don't get me wrong... We need to talk to, and learn all we can from our IT brethren and sistren in other industries. If the only meetings you go to are with other HIT folks, you really need to get out more. But I suspect that many of these unhealthy relationships started when some C-suite resident read an article in the general business press about how IT is now a utility and you should outsource it if it’s not a core competency.

Here’s a newsflash... Healthcare IT is a long way from being a utility. You can’t apply strategies designed for a mature industry if yours is in its infancy. (See “

Running Before You Walk”)

If you want to hire help with non-core functions, make sure they are core for the people you are hiring to do them.

There are areas that you may have problems staffing or supporting adequately. One of our key systems runs on VMS, and I’ve had trouble getting and keeping people who know that operating system. Even if we trained someone, they aren’t going to spend enough time administering that one system to stay sharp. Despite the cost, we finally signed a remote system management deal with the vendor of that system, because they have people who eat, drink and sleep VMS and do nothing but remote management of those systems.

Would I hire the same vendor to manage my Cisco network? Almost certainly not.

Never expect an outsourcing arrangement to save costs.

I can already hear the howls from vendors and probably some customers who sold their Board on the idea that this big outsourcing deal would cut costs out of their IT budgets that could be allocated elsewhere. I’m sorry, but I’ve never seen it, and I don’t really buy it.

The argument is that a service provider can be more efficient and can spread multiple customers’ work across fewer people and still provide adequate service levels. My test of reasonableness for such arguments is always, “How many layers need to profit from this arrangement?” Don’t count on adding layers and saving costs.

Don’t put all your eggs in one basket.

Cliché? Sure. But there’s important truth there.

What I’m talking about specifically is throwing more and more of your critical systems and services at a single vendor. I know that we all dream of integration across our application suites, but don’t confuse the number of contracts you have with a single vendor with having integrated systems.

There are at least two reasons that this is important. The first goes back to the question of core competency that I raised before.




Absolutely valid point, Marc. My bottom line is that if you have the option of doing things yourself, it's almost always better to do so.

That's not always possible, and sometimes you have to make other arrangements, but that should be considered a compromise, not a strategy.

And if you don't take some of the precautions I've outlined here, disaster can ensue, as you can read in the third and final installment here: