As the saying goes among software industry veterans, the cost burden of a highly customized product is applied to the customer “up-front and over-and-over, every day, inside and outside.”
Hospitals and other companies need to be somewhat aware of commercial software development economics, as it applies to buyers, since they are buying so much IT these days. A software product company does best when the high cost of developing the software is spread across many customers that use the same software as it is. Customization changes that. It requires each customer for which customization is done to bear the distinct and direct costs of that development that is uniquely done for them. There may be ways to economize the process, but it becomes substantial when much of the delivered software is customized. When the Total Cost of Ownership (TCO) for the software customer is considered, as it should be, customization costs becomes a big concern.
That is broken down as:
Up-front – The customer starts paying from contract-signing, before they can even access the product and long before they can really understand what will result from the process and assess its value.
Over-and-over – In that mode, customers usually think up and request additional changes from time to time. That then costs additional project dollars, and changes sometime become a continual process.
Every day – All enhancements that the company routinely makes to its base product must be specifically tailored to the unique version each customer is using. Looking at such effort for all of its customers and the additional overhead of tracking what software changes everyone has, this customization-focused approach, overall, is a more expense way to run the business of the software provider. That ongoing additional expense is reflected in all the pricing and fees the software company charges its customers.
Inside and outside – In addition to the costs paid to the software provider (outside), a significant customization effort requires that the hospital’s own (inside) employees – often some very busy key employees – are required to spend time documenting their needs. They must explain their work to the software companies analysts and review the output of various stages of the custom development lifecycle.
Some may suggest, and others believe, that major customization is the only way to obtain software that users in a variety of hospitals can effectively and enjoyably use in their particular environment, but that is simply not the case. Users don’t customize Microsoft Office applications like Word and Excel but are presented with many options to pick preferences and configuration settings, and provide localization data used by the application. Long term, users and the companies that buy applications come to understand that very particular choices that are applied in major customization efforts don’t really change the value of the use of the application in ways that could not have been done with truly good workflow and user experience design, by professionals, up front. And, overall, the idea that customization is some kind of norm has to be considered in a broader context. What other non-software products that healthcare providers, or the individuals who lead it, buy are customized ? Probably not many because of its being cost-prohibitive when the impact of custom development is considered against what can be achieved with readily available options and configurability.
The long-term, strategic and most insidious cost of customization is the bad habit that it enables among management. Faced with a truly innovative product, which necessarily represents change, leaders and staff in hospitals can, and do, customize their new products back to the familiar appearance, sequences, artifacts (forms,reports, etc.) and activities that they have used for decades, nullifying expertly-designed process innovation. Because that which is familiar is relatively comfortable. Can anyone calculate the total cost of healthcare’s infamous resistance to change ?
The approaches outlined below have earned for our ActionCue® Clinical Intelligence product very high user satisfaction scores, many spontaneous statements of praise and 100% customer retention from its inception. Cost conservation is addressed at every part of the application and our operation. So, it doesn’t mean that we don’t listen to customer input or modify the product for it. We simply are prudent in making changes that truly make the product more valuable and the customer experience more rewarding.
Don Jarrell has over 35 years of technical and business experience in product management, technology strategy and intellectual property management and licensing. Don is a primary driver of Prista’s vision and mission for the ActionCue Clinical Intelligence application.