With medical imaging, it is total cost of ownership (TCO) that really counts—that and, of course, the product itself and its ability to do what it promises. Consider the world of enterprise imaging.
Traditionally, major modality manufacturers have provided the software that drives their technology, with few, if any, essential questions asked up front. The software is functional, though often unspectacular according to KLAS analyses, and buyers frequently accept it because it is bundled with reputable and even exceptional hardware. Unfortunately, nothing lasts forever, and when contracts expire and it comes time to update the software, the cost often increases dramatically. But because the user is bound to the technology by virtue of having made a significant investment only a few years earlier, the unexpected high cost to renew the software is begrudgingly accepted by the buyer.
In a recent white paper titled Enterprise Imaging—Total Cost of Ownership: Bottom-line Considerations When Choosing an Enterprise Imaging Vendor, the market research firm Frost & Sullivan discussed the theoretical acquisition of an enterprise imaging solution with unequivocal logic: “The selection and purchase of an enterprise imaging solution should not be merely based on financial and technical factors,” industry analyst Dinesh Kumar wrote. “Choosing a long-term market player with a well-established market footprint is key to a successful vendor selection strategy.”
Certainly, less-expensive often seems the best path. So does exceptional performance. But when averaged over the life of a product, is what appears to be less expensive really less expensive, or merely less expensive at the outset?
“A detailed TCO evaluation shows an enterprise imaging solution from an established medical imaging technology vendor will deliver significant cost savings over the long run compared to enterprise and OEM vendors,” the paper stated.
In the eyes of industry analysts, an enterprise imaging solution should support a variety of medical imaging modalities and medical information systems, enabling clinical information, images, reports, and other data to be readily accessible—securely. In light of that, several factors should be considered when purchasing a system. Software innovation, certainly, is important. So is the ability of a product to support numerous medical imaging modalities. And compatibility with a healthcare system itself is essential, enabling the swift movement of data without fear of loss or interception. That said, it is tempting to consider one additional factor above all others: Total cost of wwnership over the life of a system. If an enterprise imaging solution provided by a proven leader can meet the demanding needs of an owner at a cost that is reasonable and fixed over the life of a product and, as a result, make hospital board members and administrators smile, then the vendor has done its job.
Consider, as well, the capex and opex costs associated with investments in data centers, IT infrastructures, internal resources, and ongoing management—all to achieve a truly vendor-neutral enterprise imaging solution that lets enterprises acquire, store, access, share, and collaborate on medical images and associated multimedia content throughout the healthcare enterprise and beyond.
In a 2017 report, Gartner, Inc., a research and advisory firm that provides insight for IT and other business leaders around the world, described four laws of application TCO:
- All application capital expenditure creates both application operating expenditure and the need for future application capital expenditure.
- The actual TCO of an application is the outcome of design decisions and life cycle management decisions.
- Application costs are inconsistent.
- The costs for large volatile applications will tend to increase exponentially over time.
Those points underscore the need to incorporate TCO in any enterprise imaging purchasing decision.
“TCO is an important component of vendor management and a byproduct of application investment,” the report said. “When an investment in a vendor product or service is approved, the enterprise is automatically committing to ongoing costs that could eventually be more than 10 times the initial investment. It is incumbent upon all stakeholders, including IT, finance and functional areas of the investment, to manage this significant financial commitment and risk going forward.”