How MSPs serve as shadow CTOs

Shadow CTOs are often linked to Virtual Chief Technology Officers (CTOs) or Fractional CTOs, which are particularly relevant for smaller and medium-sized healthcare organizations that cannot afford or do not require a full-time CTO-level executive. Managed Service Providers (MSPs) frequently take on the role of shadow CTOs for smaller and medium-sized organizations.

Their services include setting technology strategy, advising on security and compliance, optimizing IT infrastructure, implementing cloud solutions, and managing vendor relationships while maintaining an ongoing partnership rather than short-term consultancy. Through this model, MSPs effectively democratize CTO-level expertise, helping healthcare organizations without extensive internal resources to manage IT challenges.

The Journal of University Industry Government Innovation and Entrepreneurship study of ‘Hidden CTOs’ finds that many executives “perform the functions of the CTO without having this official status.” The authors note that in small and medium-sized enterprises “this position is often combined with other roles,” so that those doing CTO-type work may have titles like General Manager, Head of R&D, or Director, yet still carry out a high degree of technology leadership responsibilities.

What is a CTO? 

A CTO is a senior executive responsible for the technological direction and strategy of an organization. The CTO has to develop and execute the organization's technology vision in alignment with its overall business goals. CTO bridges the gap between technology and healthcare delivery, steering digital transformation initiatives that support clinical excellence and regulatory compliance. Their leadership extends beyond technology management to include strategic planning, risk management, and stakeholder engagement.

Recent research published in the Journal of Healthcare Management notes, “the COVID-19 pandemic accelerated provider and consumer adoption of new digital healthcare technologies,” creating demand for executives who can manage both technological change and organizational transformation. Inside health systems, “the use of electronic health record (EHR) systems and data science tools that use artificial intelligence (AI) are facilitating improvements in care and the patient experience,” which requires CTO-level leaders to integrate technical expertise with strategic orientation.

Why you won't find CTOs in small healthcare organizations 

Smaller healthcare organizations lack the financial and human capital to employ senior-level technology executives such as CTOs. These constraints result in limited bandwidth to dedicate leadership attention exclusively toward strategic technology management and innovation. Smaller practices or clinics often operate with minimal IT staff and face difficulties managing the expensive and technically demanding healthcare IT infrastructure needed to support clinical and administrative activities. 

A Frontiers in Digital Health study confirms that “the incompleteness of healthcare data is the main problem, particularly in primary health facilities and district levels,” where limited resources and overburdened staff struggle with the demands of digital health systems.

The absence of a CTO aligns with the organizational structure of smaller healthcare providers who often prioritize clinical and patient-facing operations over technology governance. Barriers include “lack of an adequate health management information system and data clerk staff, poor management commitment, lack of post-training follow-up, work overload, [and] frequent duty rotation.” Without a chief technology executive, technology decisions can be fragmented or relegated to non-specialist staff.

The function of MSPs beyond IT support 

Many MSPs specialize in healthcare staffing, acting as intermediaries between healthcare organizations and temporary or contract professionals. They make sure clinicians, allied health workers, and administrative staff are properly credentialed and meet training requirements, particularly for privacy laws like HIPAA. This workforce management helps healthcare providers adapt quickly to changes in patient volume. 

A 2006 study on practice arrangements and patterns titled ‘Multispecialty Clinic Practice’ notes, “a multispecialty clinic practice (MSP) is a common practice pattern for colorectal surgeons…[with] both positive and negative features, depending on the surgeon's perspective and needs.” These practices have long been “located on the periphery of major urban centers” and have since grown into tertiary care networks, serving broad populations while affiliating with universities and hospitals.

How MSPs operate as shadow CTOs

Shadow CTOs are external technology leaders who align IT capabilities with healthcare organizations’ overall goals without being formal members of executive leadership. MSPs in this capacity help organizations evaluate and manage technology portfolios. This role is vital considering the changes in healthcare, as mentioned in an International Journal of Environmental Research and Public Health study, “The digital transformation of healthcare includes changes related to the internet, digital technologies, and their relation to new therapies and best practices for better health management procedures. The quality control of massive data collected can help improve patients’ well-being and reduce the cost of services.” 

Rather than reacting to technical issues only when they arise, MSPs acting as shadow CTOs proactively identify gaps that improve interoperability. A study on shadow record practices titled ‘Shadow Health Records Meet New Data Privacy Laws’ notes, “large sets of health data can enable innovation and quality measurement but can also create technical challenges and privacy risks,” MSPs function as trusted advisors, ensuring that healthcare providers remain current with technological advances. 

This aligns with the central topic of the IJERPH study, “The healthcare industry will be shaped based on the needs and expectations of this new ‘consumer of health services’, which will require upgraded experiences with the main characteristics of personalisation, comfort, speed and immediacy in the provision of services.” 

MSPs also provide vendor management leadership as shadow CTOs. The healthcare IT ecosystem includes EHR providers, telehealth platforms, cloud services, medical device manufacturers, and numerous software vendors. MSPs coordinate among these diverse entities to streamline integrations, improve system interoperability, and negotiate contracts conducive to long-term organizational goals.

See also: HIPAA Compliant Email: The Definitive Guide (2025 Update)

FAQs

What is an MSP?

An MSP is a third-party company that manages a business’s IT infrastructure and end-user systems.

What is a Managed Security Service Provider (MSSP)?

An MSSP specializes in cybersecurity services. They monitor, detect, and respond to cyber threats in real-time.

Why would a business choose an MSP instead of hiring in-house IT staff?

Hiring an MSP gives businesses access to a team of experts at a fraction of the cost of full-time staff. MSPs provide 24/7 support, scale services as the business grows, and often deliver specialized skills that may be too costly to build internally.