June 13, 2005

B2B and IT outsourcing, whether it takes place on-shore, offshore, or in some combination, is normally associated with cost savings. But that's just part of the overall solution. There is actually a lot more to it than just that.

To understand why, listen to Steve Noyes, director of information and communications technology at Toronto's Mt. Sinai Hospital. "Mt. Sinai only embarked on clinical systems over the last seven to eight years," he says. "Most hospitals have been moving down this road for twenty years."

n Mt. Sinai's case, the company has had no real legacy of home-grown systems. Going with IT outsourcing from HP, a company with which the hospital has now been working for five years, was a way to get a jump on some lost opportunities.

HP manages plenty of services for Mt. Sinai. Think help desk, desktop, and operating system support plus e-mail infrastructure management, server administration, and more recently data center hosting. HP has more experience with all of this than Mt. Sinai, which is the ultimate rationale behind the contract. "HP can bring a lot of efficiencies that we, as a hospital, can't bring."

This indicates that the relationship isn't simply a question of doing things more cheaply, as Noyes admits that Mt. Sinai's immediate goal is to break even with HP rather than recoup operational costs. It's about doing IT tasks for which Mt. Sinai never even staffed, and turning the switch on quickly rather than waiting for the hospital to build out its own internal expertise.

Some managed services contracts go bad because service level agreements (SLAs) are ambiguous or not comprehensively thought about by both parties. In this case, though, Mt. Sinai has spelled out its requirements thoroughly. There's a lot at stake, as Noyes says. "We can't afford any downtime." To that end, SLAs stipulate for HP to resolve server problems within two hours, devices within four hours, and issues that effect business users rather than patients within six hours.

Smaller managed service providers claim that the larger players do best at managing their own technology, but Noyes says that, in the present instance, that's not the case. "HP supports the Unix boxes that are IBM and the Wintel boxes that are HP. HP will support anything we put in."

Source: Line 56