Technology Procurement Process

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Technology Procurement Process

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

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