That plan was foiled by a failure to entice IT workers to move from California to Phoenix and problems with the SAP software. Users found SAP supply chain and financial applications installed at seven hospitals by 2000 "extremely complex" and not intuitive, Canning said.

In 2001, a new CEO oversaw a corporate reorganization to stem operational losses in 1999 and 2000, and that led to a decision to outsource CHW's IT operations to Perot Systems Corp. The operations are still outsourced to Perot.

The company had decided to abandon the SAP effort in 2001 after an internal study determined that the German vendor's applications were geared more toward a manufacturing environment than a services-based health care business, Canning said. An SAP spokeswoman contended that the firm has a "strong footprint in health care." She blamed the move on executive changes at CHW.

In early 2002, CHW selected Lawson, which Canning said generates 40 percent of its revenue from health care organizations.

CHW took six months to find the right staff to support the applications and then began the implementation.