Tuesday, March 5, 2013
I recently received a call from a dental practice owner who asked for help transitioning his data from his current web-based vendor to a new vendor. When I asked him if I could look at the vendor’s data transition warranty, it was apparently non-existent.
Dental practice owners make software decisions every day based on how the screens look and function…and how much they like their salesperson. But few use the actual terms and conditions of the contract in their evaluations and comparisons.
Having been involved in the selection and purchase of numerous web-based software solutions for healthcare practices over the past decade, the best advice I can give is a reminder that the contract you sign is critical to the success or failure of your web-based vendor selection decision.
There are many advantages in having the software hosted by the vendor. You don't have to call Joe the local IT guy on an evening or weekend if there's an issue and see if he can make it over to your practice. You also don't have to deal with making regular backups, taking care of system maintenance issues, or making sure the system is optimized for efficiency. Fact is, you would probably rather take care of patients than deal with these IT issues
While there are many items to review and structure in your web-based contract to make sure it meets your practice’s goals, defining the vendor’s support services and setting out the situations that allow you to exit from the contract are two of the most important.
Do You Have Good Support?
You have to remember that when the vendor is hosting your system they have more control over the operations of the software. They are in control of whether the system is up or down. And they are in control of how they respond to issues you might have.
Unfortunately when practice owners sign contracts they often don't think to make the vendor accountable for all this. You need to make sure they are accountable in three major areas:
First, is your system down for any length of time? Typically the industry standard is that the system will be up and working at least 99% of the time if not more. If the vendor doesn't meet that metric then there needs to be a financial penalty for the vendor.
Second, how would you feel if you called with a problem and they didn't return your call? You need to define an acceptable response time for both critical and noncritical issues. This is all negotiable. But at the end of the day, if the vendor doesn't meet the agreed to response times, then there should be a financial penalty.
Finally, what if the vendor calls you back on an issue but doesn’t fix it in a timely manner? Just like with the previous response time issue, if the vendor doesn't fix a problem in an agreed to period of time, there needs to be a financial penalty for the vendor. Now remember, vendors don't typically like to penalize themselves for their mistakes—what a surprise! So, if there aren't already metrics for uptime, response time, and resolution time, with associated penalties for noncompliance, then the onus is on you to make sure you are protected by having those added to the contract.
Can You Get Out of Your Contract?
In a perfect world, you and your vendor partner will have a wonderful relationship running your web-based software from their hosting center, everything will be Kumbaya, and there will never be cause to get upset. Keep in mind that the monthly software fee and hosting contract can be a fairly long-term arrangement. Most vendors set a period of 3 to 5 years, and if you decide to get out early then there is a penalty.
But what if the vendor doesn't do its job? What if the system is chronically down, or they don't return phone calls or they don't take care of you? There needs to be a boiling point defined, where basically you have had enough and, in this case, the vendor should let you out of your contract, no strings attached. You will probably need to negotiate with the vendor to define just what will be considered a chronic problem, but at the end of the day, the vendor needs to give you the right to cancel the contract if there truly are chronic problems.
Lessons Learned
Getting these details defined in a contract can be the basis of a mutually beneficial long-term relationship, and if they’re not defined they can lead to problems for everyone involved.
As an example, I was negotiating with one web-based vendor on behalf of a client, and when I asked the CEO about structuring some support assurances, he told me “they were in business for a number of years, had a stellar reputation, and that my client didn’t need formal support guarantees.” When he wouldn’t budge on this point, we decided the practice could be better served by another vendor.