3 dental software purchasing mistakes
We are in the midst of a revolution, and changes in the dental software industry that are dictating the way dental groups and DSOs run their operations and do business. Chances are that soon you will be looking either to upgrade your present software with new features and functionality or purchase new software altogether.
However, whether you’re purchasing brand-new software technology with a new vendor or you decide to upgrade to software with your present vendor, it is important to be prepared to negotiate the contract terms.
Having personally negotiated hundreds of contracts over the years I can tell you that some vendors are hesitant initially to negotiate their standard agreements. But what you need to realize is that this is the game. You can’t get what you need unless you ask for it. So, demand they work with you.
Also, it is important to note that many healthcare attorneys, although skilled in the legal matters of practices and groups, don’t necessarily understand the nuances of IT and software contracts, especially electronic health record contracts. There are many business and technical issues in these contracts that need to be recognized and addressed, and the onus can fall on you to prepare yourself adequately. Don’t fall prey to a bad contract that could negatively impact your practice for years to come.
A software contract can be very complex and lengthy with many sections and clauses difficult to discuss in one article (I conduct lengthy workshops on the subject). But to help you get started and be more aware of the importance of this subject, here are three basic common contract mistakes to think about:
Not asking for the best price
Everybody wants a good deal, but too often providers and administrators are too intimidated to ask for a better price, or may not be sure what a “right” price should be. Vendors are adept at making you believe that you’re getting a great system at the right price. But there are many games being played on this front. It can look like you’re getting a good price for the software, but the training and implementation or support costs might be out of whack. Are the costs of interfaces in line? How can you be certain? Ask your vendor for a detailed breakdown of all costs. Remember, all items should be negotiable. You can develop a win-win negotiation strategy with your vendor. Above all, learn about marketplace pricing. If you negotiate price from a position of knowledge, you’re likely to get better terms.
Accepting poor payment terms
If you were a vendor, you would want most of your money up front, and typically this is what a vendor wants. The problem is that upfront payment severely reduces vendor accountability. Never pay a vendor most of their money up front. Instead, ask for milestone-based payments. As the vendor completes certain pre-determined project milestones they receive a portion of their fee. The onus needs to be on the vendor to perform before they get all their money. A milestone-based payment system is the best incentive for the vendor to complete the project successfully and in a timely fashion. If you pay everything up front, what leverage do you have if the software doesn’t work as advertised, or training and implementation doesn’t go as expected?
Not demanding service and support guarantees
Many times issues crop up once the system is installed, final payment is tendered, and a practice or group is dependent on the technology. But this is just the starting point. How you receive service and support is a major factor to your long-term success.
There is no such thing as a system that doesn’t need a solid plan for maintenance, support, and upgrades and enhancement. And this is where many contracts fall short—they don’t take into account the “after” implementation problems in enough detail.
During the sales process, sales people are quick to assure you of great support, but can your vendor “walk the talk” once the system is in place? If you run into problems, how long will the vendor have to address them? What are the penalties if the vendor doesn’t meet stated commitments? Sales people will commit to taking care of you, but unless there are real consequences for the vendor, you don’t have any real guarantees.
That’s why you need a Service Level Agreement or SLA, which is the standard mechanism to document vendor commitments. The agreement outlines various areas of accountability in which the vendor commits to service and support. After all, you’re paying a percentage of the license fee on an ongoing basis for support; you have the right to demand good service.
And, if you happen to be using a Cloud-based system, then the whole idea of service and support guarantees becomes a bit more complex. Now you are dependent on your Cloud vendor to keep your system running smoothly. So, you need to address uptime guarantees and penalties, backup procedures and, most importantly, HIPAA compliance of the data center.