Is there ever an acceptable level of vendor lock in? Today we explore.
Today in health, it we're going to talk about acceptable vendor. Lock-in. My name is bill Russell. I'm a former CIO for a 16 hospital system and creator of this week health. Instead of channels and events dedicated to keeping health it staff current and engaged. We want to thank our show sponsors who are investing in developing the next generation of health leaders. Short test artist, site, parlance, and service. Now check them out at this week. health.com/today. Having a child with cancer is one of the most painful and difficult situations family can face. In 2023 to celebrate five years at this week, health. We are working to give back. We have partnered with Alex's lemonade stand all year long. We have a gold raise, $50,000. And guess what? We have raised over $50,000. We appreciate all of you who have participated in our captains campaigns and our events and other things that have raised the money. , if you haven't yet, we asked you to join us in our website in the top right hand column. You're gonna see a logo for the lemonade. Stand, click on that to give today. We believe in the generosity of our community and we thank you in advance. All right. As you know, sometimes I go off of articles and other times I do not go off of articles. This is one of those times where I don't, I'm going off of conversations. I've had a lot of conversations this week with CIS. And one of the things that, , is sparked in my mind. Is this whole concept of what is an acceptable, low level of vendor? Lock-in. And it's interesting. Cause I was going to do an article that talks about the cybersecurity. , challenges that Microsoft has been having, , directs to Ford has been posting some of these and I've been reading them and I'm kind of concerned, I thought, okay. Yeah, this would be great article at all. I'll go ahead and talk about this and whatnot, but at the end of the day, I don't think it's going to make a difference. Like, I don't think you're going to say, oh my gosh. It, even if Microsoft is agregious here and I don't think they are, but if they are agregious here. You can't swap out Microsoft. , and so I'm like, all right, does that really help you? If I, you know, expound on this and say, oh, wow, look how bad this is. Other than to say, Hey, keep an eye on this. It's important to keep an eye on it. , Microsoft had. , some challenges and some issues with regards to cybersecurity, especially in the cloud. I think it has, you know, clearly it's a much larger target. And a much more interesting target for especially state actors and those kinds of things. If they can, , if they can get into Microsoft, they can get into potentially government accounts and those kinds of things. So it's a, it's a large target. It's a large, , vector for them to go after. , and so I would keep an eye on it, but it got me to thinking. You know, what could you actually do about it? And actually I have a story about this and I, I tell the story every now and then. So if you've heard it, I apologize. I'm turning into my father, but the. The essentially there was a. Time where I was struggling with our rising costs for Microsoft. , services. And this was back in the time of a bomber Steve bomber and who I thought was quite frankly, not that good of a leader for Microsoft. He was too sales oriented, too. , hell bent on getting, , you know, driving market share, whatever buying, whatever he was going to buy as a result of that. , I think Satya has taking Microsoft in a much better. Direction since then, but regardless at the time it was Steve Follmer. I was worried that we were too beholden to Microsoft. And that quite frankly, they could raise the rates to whatever they going to raise somebody. We couldn't do anything. So, , my family was away for the weekend and I decided I was going to do a project. And my project was to spend some time over the weekend. This is how much of a nerd I am spend some time over the weekend, considering what it would take. To take Microsoft out of the environment completely. Okay. So 16 hospital system. About six and a half billion in revenue. About 30,000 full-time staff. And, , Microsoft everywhere. Right? So I didn't want to give this project to my team. First of all, it's the kind of project that if I gave to my team, they would just look at me like, , we have real work to do here. And so, , you know, I didn't want, I also didn't want to alarm anybody. I also didn't really, at the time when it getting back to Microsoft that, , I was contemplating this or. And it ended up being a really good exercise to do. And when I was done the exercise, what I realized is there was absolutely no viable way to take Microsoft out of our environment. It was either cost prohibitive. It was career limiting in terms of the transition. And, , as you know, there's a, there's a cost of change and there's, there's, , there's political capital that you have to expand. And then there's also the capital that you have to continue to expand. If the project does not go well. And when you're changing so much of the environment, you're changing. , Excel, PowerPoint word, you know, just the basics. You're touching every user. Every single single user would be touched. , you would also hit every, every user. , in, in your it department as well. So, , so anyway, regardless, I went out, took a look at this and the conclusion was, could not take it out of the environment. It was integrated into some of our ear EHR functions. So Microsoft word was the integrated editor into some of the EHR functions. That was one of the reasons that, that we couldn't do anything. , the second was the number of vendors within healthcare. That had gone down the Microsoft SQL route. And so replacing that was no small feat. And in some cases we had no control over it. And so you were going to have to continue to pay Microsoft for some aspect of the licenses that were required to run it. And those licenses turned out to be pretty significant. Given how many applications we had, , , 800. , 1300 instances of 800 applications and of those applications and majority. Microsoft had done a good job at marketing to those companies. They wrote on the Microsoft stack. Therefore we had to pay the Microsoft. Fees. And so at that point I realized, okay, regardless, we have to sit down with them as a partner to figure this out. And I think that that environment is a lot easier today with Sacha's. , Microsoft than it was with Steve bombers, Microsoft. And I think that's my first point. What is an acceptable level of vendor? Lock-in. I think it depends on the leadership by the way. To the extent that you can make it no vendor lock-in, that would be perfect to the extent that you can make it, , because lock-in. Represents lock-in. I mean, you cannot move off and yes, we want to do layers of abstraction. We want to make sure that we can move our data out of the cloud and all these things that we've talked about in this show over the years. But at the end of the day, there are some things that you just cannot get away from it. If you cannot get away from, there's a couple of things that you want to look at, you want to look at their history of price increases when they know they have you, are they just going to continue to extort a five, 10, 15% increase?
Every time they have the opportunity to sit down at the table without adding additional value, if they are adding additional value, it is not just a price increase. It is additional value that they're creating. If they are adding. Software adding features and those kinds of things. , If it's, if you look at that history over time and it's acceptable, then. That's an acceptable level of vendor. Lock-in. You have an organization that sees themselves as a partner and they're going to work with you and they are going to get paid for the value that they are offering. And I think that speaks to leadership. And this is why I say things like Steve Balmer's, Microsoft and such, and a Dallas. Microsoft. They're different. They're different companies. One was hell bent on growing the, , the, , investor return and those kinds of things. And the other is more measured. And focused in on the clients and what they need and developing new services around what those clients need. And so. I think you have to look at, obviously their price increases over time. You have to look at their leadership. This is why when people say, you know, Hey, we have, we've a lot of vendor lock-in with the HR providers. And I say to them, do you trust the EHR providers? Do you trust those organizations? And I think it matters. I think it matters who the leadership is. I think it matters what their history is. I think it matters if you feel like it's a fair amount of money that they are taking for the services that they're offering. And, , and I would look at the leadership. Because the reality is once you've gone to any HR, you're not swapping it out. Not anytime soon. Anyway. Not unless there's a. , an event that causes you to head in that direction. And so there's a vendor. There's an amount of vendor lock-in that you are. , you are agreeing to, if you're doing these large projects, if you go to a new ERP solution, you're likely not moving out anytime soon. If you go to new EHR, you're not moving at any time soon. If you do a PAC system. , because of the cost, the expense, the complexity, you're probably not moving out any time soon. And so as you look at consolidating on a single packs environment and you can have my gosh, I saw a diagram the other day, where there was a 45 different PAC systems at a health system. And it wasn't even a huge health system. It just, it happened to be an academic medical center. So they had a lot of PAC systems. Within there for all the different specialties, but if you're going to consolidate consider the acceptable amount of vendor, lock-in the organization, the price increases the leadership. , you know, the other thing you can look at is how long of an agreement can you sign? Because if they are only extracting increases, every time they sit down at the table with you, you want to make it so that they're not sitting down at the table with you all that often. And so you saw a signet. When a PJ Moore came in at Providence, he signed, I think a 10-year deal. With with Microsoft. And so he didn't have to worry about, Hey, I'm renegotiating this every year, every three years, every five years. Just something to consider. , I bring up the question so that you bring up the question. Is there an accessible level of vendor lock-in and what can you do? To ensure that it doesn't impact your organization, your providers, your patients. Any more than it has to, , because there are going to be cases where you do have to accept some level of vendor lock-in. So anyway, that's my thought for today. Thought I'd share it with you. Hey, if you have ideas or thoughts, shoot me an email. Love to hear them, bill it this week. health.com. If there's something I'm not considering here, or if there's another way of thinking about it, love to hear it. That's all for today. If you know someone that might benefit from our channel, you know what to do, tell them about it. Tell them about us, tell them where they can find us anywhere. They listen to podcasts or our website. , we want to thank our channel sponsors who are fantastic, and they continue to support our mission of investing in the next generation of health leaders. They are short test artist, site parlance, ad 📍 service. Now check them out at this week. Health. Dot com slash today. Thanks for listening. That's all for now.