Healthcare organizations today are navigating an increasingly complex technology landscape. Between margin pressures, workforce shortages, and the rising cost of maintaining critical IT systems, some organizations are asking a crucial question: should we be running all of our technology ourselves?
That question sits at the heart of KLAS Research’s Large System Integrators 2025 report. The findings in this report highlight a growing but cautious interest in large system integrator (SI) partnerships among larger health systems. These partnerships can bring needed cost efficiencies and operational scalability but also require organizations to rethink how they manage technology, talent, and trust.
Points to Know
- Many health systems are turning to SIs because of pressure to modernize IT environments while managing workforce shortages and tight budgets. Among other benefits, large SIs offer significant cost savings; 69% of organizations report moderate to significant savings from these partnerships.
- Despite cost benefits, large SI engagements can be expensive and complex. Some organizations struggle with questions around service consistency, governance, and alignment. Success depends on clear expectations and strong contract structures.
- Demand for large SI services will likely stay steady but limited to larger organizations. Instead of full-scale outsourcing, many will pursue targeted partnerships focused on specific functions like EHR maintenance or cybersecurity to balance cost efficiency with operational control.
Why Healthcare Organizations Are Turning to Large System Integrators
Healthcare has always been labor intensive—not only in terms of patient care but also regarding the IT systems and infrastructure required to support patient care. Further, organizations are now being asked to do more with less—to continually modernize their IT environments while also facing workforce shortages and tight budgets.
Large SIs are global professional services firms that provide extensive clinical, financial, and operational IT outsourcing. These firms have deep benches of onshore, nearshore, and offshore IT resources who are trained to handle everything from EHR and ERP maintenance to analytics and service desk operations. Additionally, because these firms employ many offshore and nearshore resources, they can lower labor costs for their clients. For many healthcare organizations, those levels of talent, expertise, and cost savings are impossible to replicate internally. As the report notes, 69% of respondent organizations saw either moderate or significant cost savings from their Large SI engagements.
The appeal is clear: outsourcing to a large SI can reduce costs, address staffing gaps, and free in-house teams to focus on innovation and patient-facing priorities.
Cost Savings Can Come with Challenges
While the promised financial outcomes are compelling, large SI engagements are not without their challenges. For many healthcare organizations, IT outsourcing can feel like giving up control. When hundreds of IT staff members are effectively transitioned to an external firm, questions about governance, accountability, and alignment naturally arise. Large SI projects are also very expensive—respondent organizations spend an average of $5 million annually on these engagements. This can even be cost prohibitive, especially for smaller organizations.
KLAS data also shows that while the majority of interviewed large SI clients have experienced cost savings and even IT performance improvements, overall satisfaction with their firm varies widely. Many respondents describe their large SI relationships as good but not great, expressing desire for deeper innovation and strategic partnerships. Additionally, some organizations struggle with challenges like inconsistent service delivery, cultural mismatches, or gaps in innovation.
However, the flexibility, competitive prices, and scalability provided by large SI engagements can outweigh the discomfort of change and the project challenges. Success hinges on how well both sides manage expectations and structure their contracts. Organizations must weigh whether they are prepared to hand over the keys to their operations and whether outsourcing will bring the desired outcomes. Being intentional about the scoping and alignment of incentives can make the difference between a productive partnership and a frustrating one.
Where Is the Market Heading?
Larger healthcare organizations’ interest in large SIs will likely remain steady due to continuing margin pressures and workforce shortages, but the number of organizations who actually take the leap to engage these firms will probably stay low. Large SI partnerships can be transformative, but they aren’t turnkey solutions. They require trust, transparency, and careful planning to balance the benefits of scale with the need for control.
As the market continues to evolve, organizations will likely use large SI firms for targeted or piecemeal outsourcing rather than full-scale handovers. Strategic engagements focused on specific applications or use cases (e.g., EHR maintenance, data integration, cybersecurity) will allow organizations to fully maximize the benefits of these partnerships. Healthcare leaders considering a large SI partnership should ensure that their engagements are well structured and managed.
To explore the full market insights, firm overviews, and best practices for successful large SI partnerships, we encourage all to read the complete Large System Integrators 2025 report.
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