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Did You
Know...?
That Value Analysis Was Developed Back
In the 1940's After World War II as a Way to Find Lower Cost but Higher
Quality Alternative products and methods. This was Due to the
Lack of Material Resources At The End of The War.
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Strategic Value Analysis in Healthcare Best
Practices
Return to
Best Practices Main Menu
Value Analysis
Technology Connection
How Do We Save Money On High Dollar
Technology Purchases with Value Analysis? For
Example: Purchase of MMIS Software
Let’s Start with The Budget and Purchase Process That Are Popular In Today’s
Marketplace. Today and for many years to come the first line of defense in
healthcare organizations to control their spending is the Budget
Process. This is a vital process that allows organizations to evaluate
their purchase of technologies from the highest
level of the organization to the requesting department. In most cases
the organization has already submitted Request for Quotation to Ballpark the
price of the technology for the budget process. This is necessary and
recommended.
Who now takes control of this purchase decision in a healthcare organization
once budget approval has been granted? Most likely the Director of
Materials/Purchasing (he/she knows the most about such a system right?) and
the CFO/VP of Finance for the final sign off, prior to purchase. In most
cases budget approval is only the first step in the purchase and will
re-institute the bid process from all of the MMIS Software Vendors that sent
proposals for the Request for Quotation Process for budget projections.
Next:
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You will
Meet With All of The Software Vendors |
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Have
Demonstrations of All of Their Software with the Latest Bells
and Whistles |
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You Will
Have Key Department Heads Sit In On The Demonstrations to See
How They Like the
Software Products |
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You Will
Receive Formal Proposals |
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You Will Identify
What You Like and What
You Don’t Like About
Each Vendors products |
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You Will
Identify The Key Features That You and Your Users Feel
Will Benefit Your Organization |
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You Will
Ask The Vendor To Sharpen
His Pencil Once
You Have Chosen His Company (Give Me Your Best Price) |
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You Will
Make A Final Recommendation to Your CFO and Senior Management on
Why You Want The Vendor you Chosen and the Contract Is Awarded
and Implementation is Started. |
What’s Wrong
With This Process?
Just because you have approval and theoretical best price on $750,000 of new
Materials Management Information System Software (and numerous other
software products too) from your Finance Committee, it doesn’t mean that you
are getting this best VALUE for your converted dollars.
LET’S LOOK TO
VALUE ANALYSIS FIRST BEFORE YOU START THE BIDDING PROCESS
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Before
requesting a RFP, establish A Value Analysis Team of customers,
stakeholders and experts to evaluate your current situation and
develop performance specification for your new MMIS system based
on your functional requirements. I.E. |
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Identify
key Issues/challenges that are problematic with your current
software/hardware configuration |
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Compare
your organization’s challenges to similar organizations that are
current utilizing same or similar MMIS Technology and/or have
recently upgraded |
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Determine
the functions (primary, secondary and aesthetic) that are
ABSOLUTELY require for your MMIS |
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Develop
performance specifications based on your functional requirements |
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Prepare
bidders list for only qualified vendors that can meet or exceed
your performance specifications |
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Prepare
your performance specifications in the form of a RFP and submit
to qualified MMIS vendors |
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When bids
are returned from MMIS vendors rate vendors (1-10) on how well
they met your functional requirements and the associated cost to
meet them (this might require software demo’s and site visits to
vendors customers to properly rate and weigh these factors) |
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Select
MMIS with highest rating and lowest overall total cost that met
your required functions. |
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Lastly,
negotiate with this bidder to reduce their cost even further on
the functions that you have identified through your VA process
that are not need or required for the optimal performance of
your new MMIS. |
Through this VA
Process you will find that
you will save up to 25% off you theoretical best price because you
predetermined what’s important to you and what’s not. As opposed to letting
your MMIS vendors overwhelm you with feature rich options that you will
NEVER, NEVER USE or even understand.
Do not under estimate
the simple yet powerful Value Analysis Process. If you employ the process
correctly, you will lower your acquisition cost, improve your quality and
more importantly give your customers and yourself exactly what you need and
want!!
Click Here to Learn More about the FREE
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