In search of a software solution that works for you: it goes beyond a simple RFI or RFP
Jamie C. KowalskiIt's an all too common refrain. "We purchased this software and it has not lived up to its expectations ... not provided an ROI."
Hospitals in the U.S. are in a precarious position. Half of all hospitals lose money on operations. The other half has barely break-even bottom lines, and those are worsening. There is a tremendous need for capital to use for facility replacement/renovation, investments in new clinical technology and computer/software technology. And, I almost forget to mention, there is an extreme shortage of capital and no obvious new source on the horizon. As actor William Bendix, as character Chester A. Riley used to say in the 1933 1958 NBC TV sitcom, "The Life of Riley," "what a revoltin' development this is!"
For supply chain management executives, there is, sorry to say, no deviation from this theme. Supply chain management software is obtained the same way.
But it doesn't have to be this way. What is needed is an entirely new approach to how software tools are acquired.
Historically, the process of acquiring soft ware has gone something like this:
* The hospital identifies its needs for information systems through some process; sometimes engaging a consultant to help. Usually, this is entirely focused on what technology capabilities it has that it wants to make sure it keeps, plus recognition of what it doesn't have, and therefore, wants.
* Frequently, the next step is to create a Request for Information (RFI) that invites suppliers of information technology systems to provide their company qualifications and the features of their software; how it meets hospitals' needs. No proposal/bid is included, and the hospital is not committed to act on any of the responses.
* Next, or sometimes instead of the RFI, the hospital produces and sends out a Request for Proposal (RFP). The response to this is a formal bid; what will the vendor provide, how the specifications will be met, and, how much will it cost.
The reasons the above is not resulting in satisfied customers are:
* The RFI or RFP processes do not allow or require the technology/software companies to truly understand the idiosyncrasies of the hospital
* The responses focus on only the software the supplier has to sell
* Software alone is not going to address the supply chain business processes that need the software to work better, yet probably have to be changed to allow the software to provide the total benefits touted and/or desired.
* Software is usually purchased with some help with the installation provided by the supplier or a third party. This includes education (training the trainers) and loading the files. It does not include total implementation. So no wonder it falls short of actually achieving much more than automating what was manual, or changing the way the automation happens--for better or worse.
Think about when you obtained the new upgrade to Windows or Microsoft Office. It was easy to install and it came with either a reference manual or the access to a downloaded version. However, if no one was able to show you how to use the new features in Power Point or Excel on tasks you do every day, you couldn't take advantage of the features and gain the benefits until you stumbled upon them or figured them out. You did not achieve the outcomes you sought, or, at least you didn't for a very long time.
As a further illustration, consider this: A leading hospital supply chain management software company reports that less than ,5 percent of its customers use the contract management feature in the base package! When asked, supply chain leaders state their technology, needs include contract management as one of the top items!
Striving to find a solution
When engaging a business partner to provide supply chain management (or any other) soft ware, the software should be recognized for what it is ... a tool. Software is an enabler that helps improve operations, information processing and analysis., By itself, software can't "do" anything. Management and staff use the software tools to make decisions, take action, process transactions in a new, improved way, so the supply chain improves performance. Sounds just like a "solution," doesn't it?
Prospective software buyers and providers would both benefit from the solution approach. The buyer should invite and require submitters to make the investment in the time required to understand the environment of the buyer/hospital. This would be an "assessment" of the entire supply chain: organization, operations, outcomes, etc. And it would be at a requisite level of detail, which would demonstrate how well the potential supplier can and does understand the specific situation at that hospital. Not just aggregate industry knowledge, which may or may not match that of the individual hospital. While supply chain management principles are universal, their applications are not.
The supplier then would be in a position (and required) to present how the supply chain could and should operate, using its technology tools, in a way that achieves the hospital's goals and objectives; in specific terms. It would also allow (require) the supplier to calculate a savings associated with the new model and subsequent purchase/use of its software, and the Return on Investment (ROI).
Finally, the supplier would be expected to help the hospital make those changes in operations and show how to use the software to make it all happen. This is far beyond basic installation.
Impact of a solution
What would this change? Quite a bit, and mostly for the better.
First, the hospital would get the following: A solution-driven outcome. That means something tangible, like:
* Real bottom line ROI, not just "feel good" benefits like "simpler transactions" or "enhanced productivity"
* Savings that can be used to fund/pay for the software and possibly other investments. Or go to the bottom line for future needs (buildings, raises, and/or other technology)
* Reduced risk of a technology purchase failure, or disappointment
* A cohesive plan that, if executed, will transform the supply chain from what it has been to what it can and should be. A plan that integrates technology with operations in a way that allows the software to be optimized, which in turn, helps to optimize the operations
* A supply chain that is efficient and effective; that does the right things in the right way. That helps clinicians save time and effort and apply that saved time to patient care
* Technology and a business partner that really knows the hospital's business operations in a way that it can help provide the total solution
* Data and information that can be used to manage daily operations, find additional savings or expense avoidance opportunities, and tracks performance
* An infrastructure that can sustain the transformation in the supply chain, so initial savings and improvements do not disappear
Some might consider these effects to be less positive, or, at least relatively so:
* A longer time to complete the process because of the addition of the "assessment" step. This can be minimized if the chosen supplier applies adequate, knowledgeable resources to the process.
* Greater (perceived) expense to acquire and implement the technology. Remember to take into account the ROI that this will derive.
* A need to change the operations of the hospital, rather than having software used or customized to do things the way (not always the best way) the hospital has done them.
Seems like a lot to gain with little to lose.
Hospitals would be well off to use this approach with all technology/software acquisitions. It would help them improve their likelihood of success, their operational and financial health. In short, their outcomes.
Jamie C. Kowalski is vice president of McKesson Provider Technologies, Milwaukee, WI.
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