Building a Business Case for the Purchase of an Athlete EHR System. Donald Olds Chief Executive Officer, Presagia
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1 Building a Business Case for the Purchase of an Athlete EHR System Donald Olds Chief Executive Officer, Presagia
2 CONTENTS Introduction... 3 What Should be Included in a Business Case?... 3 Executive Summary... 4 Rationale for Investment... 4 Identifying the Benefits... 5 Quantitative Benefits... 5 Qualitative Benefits... 6 Identifying the Costs... 6 ROI Analysis... 8 Summary and Recommendation... 9 Next Steps... 9 NOTICE Copyright Presagia All rights reserved. Presagia is a registered trademark. The Presagia logo is a trademark of Presagia Corp. Other trademarks identified in this document are the property of their respective owners. Page 2 of 9
3 Introduction In the first whitepaper of this series, we discussed the non-monetary factors involved in choosing the right Athlete Electronic Health Record (Athlete EHR) system. Key decision points included vendor history and reputation, security, configurability, scalability and ease of use. In today's economy, even if you know that switching to a new EHR will improve the health of your athletes, you also know that the first question from the final decision makers is not going to be: Will this proposed software solution advance our ability to optimally care for and train our athletes? ; it is likely to be a much shorter: How much does it cost? With this second whitepaper, we will help you prepare a business case and return on investment (ROI) analysis to sell the new system within your organization. The length and depth of the business case that you may need to write will vary significantly from organization to organization. In some cases, it might be as simple as a five minute conversation with your boss, where you outline the rationale, costs and benefits. In other cases, you may need to produce a formal written document, detailing the costs over a period of three or more years. In either case, what we discuss within this whitepaper will help you prepare your case. What Should be Included in a Business Case? You have identified a need to implement a new Athlete EHR system and now you need to clearly communicate why this purchase should be approved. A business case is a generic term to describe the internal document required by many organizations to justify a capital or non-capital expenditure. While your organization may have specific requirements for a business case, the basic elements generally include: 1. Executive Summary 2. Rationale for Investment a. What is the business issue? b. What are the options considered? c. What is the proposed solution? 3. Benefits of the Proposed Solution a. Quantitative Benefits Cost Savings b. Qualitative Benefits Operational Improvements 4. Net Costs of the Proposed Solution 5. Summary and Recommendation We will discuss how to structure these areas in more detail in the following sections. Page 3 of 9
4 Executive Summary It is generally easier to write the executive summary after the business case has been drafted. When it comes time to write it, ensure that you capture in one or two short paragraphs what you are recommending, what it costs and why the benefits, both monetary and non-monetary, exceed those costs. Test your executive summary by giving it to a colleague and asking them to read it. They should be able to clearly understand your message without having to read any of the details of your business plan. Rationale for Investment Begin by describing the business issue. If you are currently using a paper-based system or an older software solution that has not evolved in many years, describe the current practice for maintaining athlete health records and the issues with this system. These issues may include: Repetitive work to complete standard forms Challenges in sharing athlete health records with others within and outside your organization Inconsistent, incomplete or lost athlete data Difficulty collecting injury statistics and analyzing trends Security and privacy concerns Inability to access data outside of office hours or while traveling Any business case will be stronger if you can present a number of options that you have considered. This might include improvements or upgrades to the existing system or a review of potential alternate solutions. The merits of each option, with their respective strong and weak points, should be considered. It is essential that the importance of each factor is clearly communicated, otherwise your audience might incorrectly assume that the solution with the most positive points is the winner. For example, if you are not certain that a particular software solution is secure or reliable, then it does not matter how many features it has. Within this section, you will have an opportunity to clearly articulate these priorities, discuss the advantages and disadvantages of each option, and provide your recommendation. If you are recommending a solution that is more expensive, highlight the principal reasons for recommending the more expensive option. Some of the factors that could lead to your choice were discussed in the first whitepaper of this series. To download Choosing the Right Athlete Electronic Health Record System, visit Page 4 of 9
5 Identifying the Benefits Prepare a list of quantitative benefits, those that can be measured in dollars or time, and qualitative benefits, those that can be described but not easily measured. In order to be persuasive, it is often better to portray a general gain for the entire organization, including the athletes, the team, athletic trainers and other medical staff, executives and the administration. Quantitative Benefits ROI analysis is a financial measurement tool whose basic premise is that a rational, for-profit organization will make a decision to spend money when it can be demonstrated that the organization will reap a monetary reward that exceeds the amount invested. This may be a straightforward concept for the building of a new factory, but more challenging when some of the most important benefits are difficult to measure, such as improved athlete health and better performance. However, it is still likely that moving to an Athlete EHR system will have some measurable benefits such as: Improved efficiency when entering, reviewing and sharing information Time saved by all users can be estimated and an hourly rate applied against that time Reductions in the time required to prepare statistics, summaries and reports Consolidated data means summaries and analysis can be done quickly and easily Time saved by having data consolidated can also be measured in terms of dollar savings Reductions in paper and storage costs if moving from a paper system Reductions in hosting costs (hardware and IT services) if moving from a legacy on-premises software system to a SaaS solution Another equally important, yet more difficult to measure factor will be your organization s ability to improve athlete health through the use of the system. Improved health results in better performance, lower healthcare costs and ultimately greater success for your organization. This might also improve ticket sales and sponsorship revenue. Page 5 of 9
6 Qualitative Benefits Once you have listed the quantitative benefits, it is equally important to identify and list those that are more difficult to measure, the qualitative benefits that the athletes, medical professionals and overall organization experience. Examples of qualitative benefits for a cloud-based Software as a Service (SaaS) Athlete EHR with mobile access include: Providing better care to athletes so that they are healthier and more competitive, and downtimes are minimized when injuries and illnesses occur Anytime, anywhere access to athlete health data in order to make better, more informed treatment decisions Communication tools to allow medical professionals to securely and easily collaborate with each other, regardless of where they are Analyzing individual and collective data to highlight risks and trends Identifying best-practice treatment strategies Developing proactive injury prevention programs Identifying health and injury risks early-on Gaining a clear view of each athlete s health status to support competitive strategy Gaining more control over security to protect the privacy of athletes personal health data Data is stored securely online and cannot be lost or stolen Authorized users only have access to the specific data they need Identifying the Costs When preparing a business case for the purchase of a software system it is important to calculate all of the direct costs, including licensing and ongoing maintenance and support fees, upfront implementation or setup costs, data transfer costs, training costs and equipment costs. License Fees Software solutions are increasingly being offered on an annual or multi-year subscription basis which provides the purchaser with the right to a defined number of users and athletes. Multi-year plans can have some advantages, in that you lock in your annual cost and protect yourself against future increases, and often suppliers provide a discounted fee or reduced implementation fees in return for your longer subscription. When receiving a quote from a supplier, you should request the annual and multi-year costs, and ensure you get answers to the following questions: Page 6 of 9
7 1. How many users are permitted and what is the cost of additional users? 2. How many athletes are permitted and what is the cost of additional athletes? 3. Does the price include training? How is training provided and how many hours is it? 4. Does the price include technical support? Does it include both online and telephone support? Is there a toll-free number? 5. Does the price include future upgrades? When was the last upgrade of the software? 6. Is mobile access included in the pricing? 7. Is there an annual price increase? If the answer is it depends, ask for a confirmation in writing as to what the annual price increase has been for the last three years. Implementation Costs Implementation costs refer to the costs to setup and configure the system. If you are hosting the servers yourself, you will also encounter costs to purchase, install and maintain hardware. If you purchase a cloud-based, SaaS service, both implementation costs and the need to utilize your internal IT resources will be minimal. Implementation costs may include: Configuring and customizing the new software and hardware to meet your specifications Transferring data from your old system into the new one Training staff Buying new equipment, such as computers, mobile devices or internet data plans Setting up and maintaining interfaces (if required) with some of your other software systems Speak with your supplier when calculating these costs as some may be billed separately and some may be bundled with your license fees. For the purposes of an ROI calculation done over several years, some of these may be one time costs, while others could be recurring. Identifying and measuring all of these costs is a critical exercise. Of equal importance, but often forgotten, is considering future costs if your needs change. Will your number of users and athletes grow significantly? Will you need special configurations and customizations and, if so, can those be handled by your supplier in a timely and cost-effective manner? Page 7 of 9
8 ROI Analysis Congratulations! You have reached the point where you have put a dollar figure on your new system s costs and, to the best of your abilities, calculated cost savings. You can now construct a simple spreadsheet that shows these cost savings versus the system costs. The table below is a sample worksheet that you can use to help with your own ROI analysis. It also includes some sample assumptions for illustrative purposes. Sample ROI Analysis Costs Year 1 Year 2 Year 3 License fees Support and maintenance fees One time implementation costs Upgrades Training Mobile data plans Data transfer Benefits Saved time at $X/hour Reductions in health costs of X% Reductions in IT costs Net Benefit (Cost) Sample assumptions 1. Electronic data entry and record keeping will save ($X/year) 2. No implementation costs (cloud-based, SaaS solution) 3. No customizations required 4. Reductions in healthcare costs associated with more proactive treatment strategies, better monitoring and oversight and improved communication 5. Reductions in IT costs are for moving from a self-hosted solution to a SaaS solution 6. Five mobile data plans required ($X/month/user) Page 8 of 9
9 Summary and Recommendation The final step to complete your business plan is to write your summary and recommendation. This section should summarize your proposal, the benefits and the costs of your recommendation and highlight how and why the non-monetary benefits should be considered. Implementing and improving best practices is a long term process. While a dollar figure value of such efforts is inherently difficult to determine, the advantages of offering improved medical treatment to your athletes will likely outweigh the cost of putting an Athlete EHR system in place within your organization. Next Steps In the next and final part of this whitepaper series, we will discuss how to prepare your organization for the changeover to your selected system. For more information on the ideas discussed in this whitepaper or to be added to our mailing list, please contact info@presagia.com or visit us at About Presagia Presagia provides secure web-based health management software solutions used by athletics organizations worldwide. Our multi-sport Athlete EHR and injury management system centralizes information needed by athletic trainers, physicians, coaches and physiotherapists while streamlining data entry to speed up the capture of treatment records. It also includes real-time reporting and collaboration tools. Our customers include the World Anti-Doping Agency, the U.S. Ski and Snowboard Association, the English Institute of Sport and the Irish Sports Council. For more information, visit Page 9 of 9
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