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Computer Technology Update

August 1, 2003
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by Malcolm H. Morrison, PhD New Rules for Your IT Vendor Search
New Rules for Your IT Vendor Search

BY MALCOLM H. MORRISON, PHD
Competition in the long-term care software market is beginning to have an impact on long-term care providers. General competitive pressure and new requirements in overall healthcare information technology (IT) are resulting in improvements in long-term care software, as vendors try to remain competitive and provide additional applications to meet emerging Internet functionality demands. Applications such as electronic medical records, computerized order entry, risk-management documentation, pharmacy ordering/dispensing/bar coding, clinical protocols/pathways, drug interaction databases, and Web application service provider (ASP) options are becoming available from long-term care software vendors. And even though providers don't often change their major software suites, the new applications will become very attractive when software replacement becomes necessary.

Experience has demonstrated that possibly the most important factor in ensuring successful use of software is the vendor's ability to deliver on its assurances over time. How can providers select vendors who will provide the reliable performance and relationships that are needed to support long-term care operations over time?

The first important step is to consider factors beyond the software product itself, including the vendor's team, methodology and support processes, and financial status. Many providers never fully research these factors in performing due diligence on vendors. Key information to obtain includes:
  • The vendor team. Who are the executives, senior managers and members of the board of directors, and what are their backgrounds?
  • Vendor methodology/processes. What is the process for deciding on desirable new product features, and how are the final decisions made? What is the process for testing new product features? How is product support organized, what are the performance standards, and how are these standards measured? What is the vendor's overall quality assurance process?
  • Vendor financials. What is the company's cash position, the process that determines spending and investing decisions, and the company's strategic plan for the next five years?

In general, providers should not hesitate to ask for detailed written information on vendors' leadership and key staff, software enhancement and support processes, and financials. The decision to select a vendor should in fact be based on the answers provided to these questions, as well as to direct evaluations of the product.

In addition to obtaining detailed information, it is important for the provider to know if the vendor's product uses industry standards and standard technology architecture, if the product can be easily integrated as required with products the provider already has, and if the vendor has a sound and reasonable plan for product improvements. Again, detailed information should be obtained.

One strategy used of late by some nursing home providers is to avoid an initial highly detailed specification of product requirements and instead provide the vendor with an overview of the provider's strategic business and operations objectives, followed by a product demonstration and pilot test. Although this approach does not preclude getting detailed information about the product, it is extremely important in evaluating whether the vendor and its product support the organization's future growth and development. When providers make vendor decisions based on "cutting edge" software functionality and avoid consideration of the need to establish a longer-term relationship with the vendor, it is highly likely that dissatisfaction will result.

Four basic areas of vendor performance should always be evaluated: (1) product functionality and technology, (2) quality of the vendor team, (3) vendor product development and support, and (4) vendor financial status and financial history. Purchasing new information systems involves establishing a business relationship with a vendor. A successful relationship depends on shared goals and expectations, as well as on consistent and high-quality vendor performance over time. What follows is a checklist of recommendations for evaluating IT vendors in today's marketplace:

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