Technology Procurement Process

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  • 1. Technology Procurement Process Calgary Regional Health Authority July 20, 1999
  • 2. Procurement Process Expectations
    • it will minimize the time required to select a system
    • it provides each Selection Committee member with a structured means of contributing to the final choice
    • it assumes that there is a selection to be made
    • entails up to 13 phases
    • phases may or may not occur and may be in a different order
  • 3. Procurement Process Phases
    • 1. Devise A Strategic Information Systems Plan
    • 2. Conduct a Preliminary Survey
    • 3. Prepare Functional Specifications
    • 4. Conduct a Benefits Analysis
    • 5. Issue a Request for Proposal (RFP)
    • 6. Develop Narrowing Criteria
    • 7. Preliminary Review of the Vendor Proposals
    • 8. Telephone Survey
    • 9. Vendors Presentations
    • 10. Site Visits
    • 11a. Performance Scoring
    • 11b. Financial Analysis
    • 12. Price Performance Comparison
    • 13. Finally - System Selection
  • 4. 1. Devise A Strategic Information Systems Plan
    • Consistent with the the Region’s corporate strategic plan
    • Identifies the major information needs/problems facing the the Region and may identify specific priority areas
  • 5. 1. Devise A Strategic Information Systems Plan
    • Identifies the broad goals and possibly the objectives to be achieved
    • Includes a strategic system design
      • identifies the architectural approach
      • concentrates on operational processes rather than department functions
      • outlines major constraints, e.g., HL-7 and/or MIS Guidelines compliant, etc..
  • 6. 1. Devise A Strategic Information Systems Plan
    • Determine if the Region is committed to “buying” vs. “building”
    • Form an Information Technology Selection Committee
    • Establish the budget or level of expenditures which with the committee will work
  • 7. Procurement Process Phases
    • 1. Devise A Strategic Information Systems Plan
    • 2. Conduct a Preliminary Survey
    • 3. Prepare Functional Specifications
    • 4. Conduct a Benefits Analysis
    • 5. Issue a Request for Proposal (RFP)
    • 6. Develop Narrowing Criteria
    • 7. Preliminary Review of the Vendor Proposals
    • 8. Telephone Survey
    • 9. Vendors Presentations
    • 10. Site Visits
    • 11a. Performance Scoring
    • 11b. Financial Analysis
    • 12. Price Performance Comparison
    • 13. Finally - System Selection
  • 8. 2. Conduct a Preliminary Survey
    • what is available on the market place?
    • what is the “state-of-the art?
    • how do we answer the above questions?
  • 9. Methods of staying current
    • conferences and trade shows
    • read the literature
      • e.g. COACH’s Healthcare Computing and Communications Resource Guide
    • talk to colleagues (particularly those at leading edge)
    • take in vendor presentations
    • surf the Web
    • issue a Request for Information (RFI )
  • 10. What is an RFI?
    • a letter to vendors who are perceived to have the type of systems the Region desires
    • letter (typically 2-3 pages) outlines in broad terms what the Region is looking for and requests that vendors send information
    • vendors return what is often returned to as “boiler plate”; off-the-shelve materials with no tailoring of the material to the Region’s needs
      • Banish refers to it as “brochureware”
    • vendors often directed to “stay away”
    • material returned often seen to have an educational value
  • 11. Procurement Process Phases
    • 1. Devise A Strategic Information Systems Plan
    • 2. Conduct a Preliminary Survey
    • 3. Prepare Functional Specifications
    • 4. Conduct a Benefits Analysis
    • 5. Issue a Request for Proposal (RFP)
    • 6. Develop Narrowing Criteria
    • 7. Preliminary Review of the Vendor Proposals
    • 8. Telephone Survey
    • 9. Vendors Presentations
    • 10. Site Visits
    • 11a. Performance Scoring
    • 11b. Financial Analysis
    • 12. Price Performance Comparison
    • 13. Finally - System Selection
  • 12. 3. Prepare Functional Specifications
    • a vendor independent identification of the required functionality
    • may be written from a work-flow or patient perspective as opposed to departmental one (the Region may be committed to re-engineering)
    • may include network topography, terminal device configuration, etc...
  • 13. Procurement Process Phases
    • 1. Devise A Strategic Information Systems Plan
    • 2. Conduct a Preliminary Survey
    • 3. Prepare Functional Specifications
    • 4. Conduct a Benefits Analysis
    • 5. Issue a Request for Proposal (RFP)
    • 6. Develop Narrowing Criteria
    • 7. Preliminary Review of the Vendor Proposals
    • 8. Telephone Survey
    • 9. Vendors Presentations
    • 10. Site Visits
    • 11a. Performance Scoring
    • 11b. Financial Analysis
    • 12. Price Performance Comparison
    • 13. Finally - System Selection
  • 14. 4. Conduct a Benefits Analysis
    • identify and forecast the benefits being sought through the implementation of the system(s)
    • an early stage of the “managing expectations” process
    • if done well, will entail solid user “buy-in”
    • serves as a baseline for later evaluations
    • may include of objectives (i.e., measurable)
  • 15. Objectives should be SMART
    • S = Specific
    • M = Measurable
    • A = Achievable (Accountable)
    • R = Resourced
    • T = Timed
  • 16. Procurement Process Phases
    • 1. Devise A Strategic Information Systems Plan
    • 2. Conduct a Preliminary Survey
    • 3. Prepare Functional Specifications
    • 4. Conduct a Benefits Analysis
    • 5. Issue a Request for Proposal (RFP)
    • 6. Develop Narrowing Criteria
    • 7. Preliminary Review of the Vendor Proposals
    • 8. Telephone Survey
    • 9. Vendors Presentations
    • 10. Site Visits
    • 11a. Performance Scoring
    • 11b. Financial Analysis
    • 12. Price Performance Comparison
    • 13. Finally - System Selection
  • 17. 5. Issue a Request for Proposal (RFP)
    • a document which outlines in some detail what the Region wishes
    • likely will be in high-level rather than in nitty-gritty detail of exactly what is required (detail will be needed at some point)
    • includes a Region profile
      • see the CHA web site for a sense of what would be included in a profile
  • 18. 5. Issue a Request for Proposal (cont’d)
    • includes general (the Region wide) and typically functional (departmental) specifications
    • typically requires vendors to discuss in detail how their system(s) will satisfy the the Region’s needs; true/false or multiple choice responses may not be acceptable
    • document needs to “sell the Region”
    • requires that the Region identify vendors (typically 8-10) to be sent the RFP
  • 19. Procurement Process Phases
    • 1. Devise A Strategic Information Systems Plan
    • 2. Conduct a Preliminary Survey
    • 3. Prepare Functional Specifications
    • 4. Conduct a Benefits Analysis
    • 5. Issue a Request for Proposal (RFP)
    • 6. Develop Narrowing Criteria
    • 7. Preliminary Review of the Vendor Proposals
    • 8. Telephone Survey
    • 9. Vendors Presentations
    • 10. Site Visits
    • 11a. Performance Scoring
    • 11b. Financial Analysis
    • 12. Price Performance Comparison
    • 13. Finally - System Selection
  • 20. 6. Develop Narrowing Criteria
    • Identify the essential requirements - those specific facets which must (should) be satisfied if the vendor is to be considered beyond the first stage
    • typically a small number (10-15) of essential requirements
    • typically each member of the selection committee will independently reviews all of the proposals
    • begins to develop an analytical approach to compliment the more mechanistic “scoring” of features which will follow
  • 21. Procurement Process Phases
    • 1. Devise A Strategic Information Systems Plan
    • 2. Conduct a Preliminary Survey
    • 3. Prepare Functional Specifications
    • 4. Conduct a Benefits Analysis
    • 5. Issue a Request for Proposal (RFP)
    • 6. Develop Narrowing Criteria
    • 7. Preliminary Review of the Vendor Proposals
    • 8. Telephone Survey
    • 9. Vendors Presentations
    • 10. Site Visits
    • 11a. Performance Scoring
    • 11b. Financial Analysis
    • 12. Price Performance Comparison
    • 13. Finally - System Selection
  • 22. 7. Preliminary Review of the Vendor Proposals
    • distribute the vendors responses (could be up to 7-8) to the Region’s RFP to all Committee members
    • each member independently reviews all of the proposals and determines if the proposals does or does not address the essential requirements with a simple "Yes", "No", "Not sure"
    • intent of the Region stage is to reduce the proposals to a workable number (2-4) as future phases will be more time consuming and costly
    • individual member findings are tabulated.
      • if member views of the essential requirement of are not unanimous, discussion is necessary
      • Proposals with one or more "No's" are usually eliminated from further consideration
  • 23. Procurement Process Phases
    • 1. Devise A Strategic Information Systems Plan
    • 2. Conduct a Preliminary Survey
    • 3. Prepare Functional Specifications
    • 4. Conduct a Benefits Analysis
    • 5. Issue a Request for Proposal (RFP)
    • 6. Develop Narrowing Criteria
    • 7. Preliminary Review of the Vendor Proposals
    • 8. Telephone Survey
    • 9. Vendors Presentations
    • 10. Site Visits
    • 11a. Performance Scoring
    • 11b. Financial Analysis
    • 12. Price Performance Comparison
    • 13. Finally - System Selection
  • 24. 8. Telephone Survey
    • It may be worth conducting a telephone survey to identify:
      • What applications are running in what facilities?
      • Why the facility chose the vendor - did they consider others?
      • What were facility's expectations - are they being met?
      • What type of hardware and systems software is being used?
      • Whether the facility is willing to have the Region staff visit?
    • The above is used to determine which facilities/sites are to be visited, taking into account geography, cost, and other factors
  • 25. Procurement Process Phases
    • 1. Devise A Strategic Information Systems Plan
    • 2. Conduct a Preliminary Survey
    • 3. Prepare Functional Specifications
    • 4. Conduct a Benefits Analysis
    • 5. Issue a Request for Proposal (RFP)
    • 6. Develop Narrowing Criteria
    • 7. Preliminary Review of the Vendor Proposals
    • 8. Telephone Survey
    • 9. Vendors Presentations
    • 10. Site Visits
    • 11a. Performance Scoring
    • 11b. Financial Analysis
    • 12. Price Performance Comparison
    • 13. Finally - System Selection
  • 26. 9. Vendors Presentations
    • permits vendors to come and present their systems to a wider audience than just the selection committee
    • permits some hands-on experimentation
    • gives the Region a look at the vendor’s clinical representatives (if any)
    • opportunity to meet their key people, preferably the project leader/manager
  • 27. Procurement Process Phases
    • 1. Devise A Strategic Information Systems Plan
    • 2. Conduct a Preliminary Survey
    • 3. Prepare Functional Specifications
    • 4. Conduct a Benefits Analysis
    • 5. Issue a Request for Proposal (RFP)
    • 6. Develop Narrowing Criteria
    • 7. Preliminary Review of the Vendor Proposals
    • 8. Telephone Survey
    • 9. Vendors Presentations
    • 10. Site Visits
    • 11a. Performance Scoring
    • 11b. Financial Analysis
    • 12. Price Performance Comparison
    • 13. Finally - System Selection
  • 28. 10. Site Visits
    • typically include 1-2 facilities from each vendor
    • may include a visit to the vendor's headquarters
    • demonstrates to the vendors that the Region is serious and that they are willing to invest resources up-front to minimize the risks of selecting the wrong vendor
  • 29. Procurement Process Phases
    • 1. Devise A Strategic Information Systems Plan
    • 2. Conduct a Preliminary Survey
    • 3. Prepare Functional Specifications
    • 4. Conduct a Benefits Analysis
    • 5. Issue a Request for Proposal (RFP)
    • 6. Develop Narrowing Criteria
    • 7. Preliminary Review of the Vendor Proposals
    • 8. Telephone Survey
    • 9. Vendors Presentations
    • 10. Site Visits
    • 11a. Performance Scoring
    • 11b. Financial Analysis
    • 12. Price Performance Comparison
    • 13. Finally - System Selection
  • 30. 11a. Performance Scoring
    • objective of this phase is to assign a "score" to each vendor
    • score will be made up of a number of factors such as:
      • functionality
      • technical characteristics
      • vendor characteristics
    • The criteria to be scored closely follow what was identified in the RFP
  • 31. 11b. Financial Analysis
    • rigorous quantitative cost analysis
    • may or may not be done independently of the performance scoring
    • costs presented are evaluated in terms of:
      • front end costs (installation, conversions, renovations, transportation, training, etc..)
      • operating costs (hardware, software, maintenance, insurance, supplies, training, staffing, etc..)
  • 32. 11b. Financial Analysis (cont’d)
    • goal is to compare vendor proposals as objectively and as consistently as possible
    • requires accounting skills as vendor responses are rarely consistent in terms of presenting financial data
    • assumptions and adjustments usually have to be made to develop reasonably comparable figures
    • cost comparison table is developed which estimates a single , all-encompassing, cost for each vendor’s system(s)
  • 33. Procurement Process Phases
    • 1. Devise A Strategic Information Systems Plan
    • 2. Conduct a Preliminary Survey
    • 3. Prepare Functional Specifications
    • 4. Conduct a Benefits Analysis
    • 5. Issue a Request for Proposal (RFP)
    • 6. Develop Narrowing Criteria
    • 7. Preliminary Review of the Vendor Proposals
    • 8. Telephone Survey
    • 9. Vendors Presentations
    • 10. Site Visits
    • 11a. Performance Scoring
    • 11b. Financial Analysis
    • 12. Price Performance Comparison
    • 13. Finally - System Selection
  • 34. 12. Price Performance Comparison
    • final "quantitative" step of the selection process is the amalgamation of the results of the price performance and the financial analysis
    • produces a price performance ratio which identifies which vendor produces the most results for the least investment
    • may entail a cost-benefit analysis
  • 35. Procurement Process Phases
    • 1. Devise A Strategic Information Systems Plan
    • 2. Conduct a Preliminary Survey
    • 3. Prepare Functional Specifications
    • 4. Conduct a Benefits Analysis
    • 5. Issue a Request for Proposal (RFP)
    • 6. Develop Narrowing Criteria
    • 7. Preliminary Review of the Vendor Proposals
    • 8. Telephone Survey
    • 9. Vendors Presentations
    • 10. Site Visits
    • 11a. Performance Scoring
    • 11b. Financial Analysis
    • 12. Price Performance Comparison
    • 13. Finally - System Selection
  • 36. 13. Finally - System Selection
    • The price performance ratios provide the Committee with the "scientific" evidence on which to base their final choice.
    • However, the final choice inevitably takes into account other factors which are impossible to quantify
  • 37. Next Stage - Contract Negotiations
    • Clarify vendor response, particularly the costs
    • Very important to :
      • clearly identify vendor responsibilities
      • have measurable system performance criteria
      • identify appropriate remedies for failure to perform
    • Contract should be more than the vendor’s standard one
    • May entail having the vendor assist in developing the cost benefit case and/or business case which will likely have to be submitted to the Board and perhaps to the Ministry
  • 38. Next Stage - Develop An Implementation Plan
    • Begin process of looking at the critical applications in more depth - a detailed design specification
    • Identify all user interactions with the system
    • Identify the resources required, site preparation, etc..
    • Identify the timetable and specific responsibilities
  • 39. Begin System Installation
    • Region staff member should take leadership responsibility (vs vendor or consultant)
    • Educate, inform, and communicate constantly
    • Cash in on the earlier “buy-in” commitments
    • Manage expectations