New report from Frost & Sullivan, analysis of the European healthcare IT professional services market, finds that the market earned revenues of $1.58 billion in 2011 and estimates this to reach $1.93 billion in 2017. The research covers consulting, training, integration and implementation as well as support and maintenance services and states that the need to enhance healthcare delivery is driving the market for IT professional services in Europe.

However it states that the adoption levels are being hampered by budget cuts and end user reluctance to invest in such services as healthcare budgets continue to shrink. Triggering several changes in the market, including consolidation and the adoption of inorganic growth models which can be dealt with cost-effective solutions.

“Hospitals are now increasingly dependent on IT solutions to support their day-to-day, reduce human errors, limit operational costs and stay ahead in terms of technology. As the penetration of healthcare IT rises, hospitals are investing in professional services to optimise the use of these solutions,” informed Somsainathan C K, research analyst from Frost & Sullivan. He said that hospitals, now more than ever before, are recognising the importance of using the right communication and technology solutions turning to healthcare IT professionals to select the models best suited to their needs.

The demand to update existing technology to boost efficiency and lower costs is further driving the growth of IT professional services in healthcare. This will have a beneficial impact on the training segment, in particular; when a new technology is acquired, hospital staff needs to be trained to use the upgraded version. A major and continuing challenge for market participants remains shrinking healthcare budgets, adversely affecting the revenues and the margins earned by industry participants.

“Lower cash inflows have motivated hospital CIOs to revisit investments into IT solutions and services. Simultaneously, the market is being negatively affected by certain pre-conceived end user notions. For instance, some IT services, especially training and consulting, are perceived as adding very limited value to existing IT infrastructure and solutions,” cautions Somsainathan.

The need, therefore, is for cost effective solutions that promote clinical and cost efficiencies. Service providers, on their part, will have to place cost optimisation on the top of their agendas. “Newer architecture and delivery models, such as cloud services, will revive the market for healthcare IT professional services in the near future, as more and more hospitals are looking to improve their technology set up. Ultimately, the need to reduce costs through the effective use of technology and the optimum utilisation of financial resources will help in improving the penetration rate of IT professional services in Europe,” concluded Somsainathan.