SPONSORED: Valify
Supply chain executives know that purchased services are an expensive cost-driver. In fact, they typically contribute about 45 percent of a hospital’s non-labor budget. So spend that money wisely. Take time to research the service category, the players and the market. By doing your homework, you increase your chances of contracting with a vendor that can deliver high-quality service and lower costs.
By Ben Bailey
A successful relationship with a provider of purchased services starts at the beginning – selecting the right vendor. As a supply chain executive, you may not be familiar with the nuances of document management, interpretation services, elevator maintenance, collections, landscaping or IT staffing. You’ll find – if you haven’t already – that there are many paths to follow in trying to find that right vendor, and many sources of information to consult. Unfortunately, not all of them will take you where you want to go.
Take your department head. He or she may love the current vendor. Maybe they’ve worked with them for a long time. They’re good people. Certainly the department’s input is valuable. But when is the last time they tested the market?
How about word of mouth? Your friend and peer at a nearby health system might offer some suggestions. But will she know how well it has performed? The department head might have an idea, but probably not your friend in supply chain.
There’s another problem with word of mouth: Your colleagues may know a particular vendor for its work in one category (thanks to experience or advertising and marketing efforts). But you’re interested in another category. Does this vendor excel in that one as well?
Of course, there’s always Google. But as you conduct your search, you may find the category is ambiguous or geographically limited. What’s more, not all of your local vendors – particularly the smaller ones – have a strong enough internet presence to make it to the top search results.
There is another option – the Valify Marketplace (www.valifymarketplace.com), a public (i.e., free) online catalog of products and services from 55,000+ vendors. The decision maker can search by service category, geography, keyword, or through a number of filters, such as diversity status. Because it is populated by actual spend data, you can be confident in the search results knowing that other hospitals and health systems are using or have used the vendors listed.
Customers of Valify’s analytics technology can also view their spend with a vendor or within a category on the marketplace. Customers can even view vendors’ market share at their organization, as well as their region or the nation. If you find a vendor that you’re interested in, you can engage in an online dialogue with vendors of your choice, to describe your specific needs and ask questions. In short, the Valify Marketplace is your gateway to issuing an RFI and ultimately an RFP.
‘Weed out’ questions
To save yourself time in the long run, even before issuing an RFP, take the opportunity – with the Valify Marketplace or whatever vehicle you choose – to ask early, but essential, questions of potential vendors. I call them “weed out” questions.
Do your contracts typically contain fundamental “pillars,” that is, provisions that are not up for negotiation? For example, do you insist on term renewal language, or language covering termination for cause or convenience (or both)? You want to know if vendors can comply as early in the selection process as possible.
Once you’ve selected vendors whom you think might be a possible fit, let them know an RFP is coming. This opens up a dialogue with them, confirms you have the right contact information, and ensures they’re ready and willing to respond to your RFP in a timely manner.
Your RFI: The learning opportunity
Your RFI helps you focus your efforts on suppliers that are willing, interested, and capable of servicing your book of business. You want to know if vendors can comply as early in the selection process as possible. Ask them to identify two or three health systems for which they have completed a project similar to yours. Ask them to describe their implementation process and whether they would agree to “xyz” terms (i.e., those “pillars” we talked about earlier).
By the time they answer all of these questions, they will know whether they are able to do the job under the circumstances you have identified. You will too.
The RFI is valuable to you for one more reason: It helps you learn more about the category at hand. In fact, vendors who may fear being out-bid will make sure you understand all of the category-specific nuances and considerations that go into pricing out the service. You will be richer for the information you gain.
Go to ValifyMarketplace.com today to find products and services of healthcare vendors in your area. It’s your starting point toward improved services at a lower cost for your organization.
Ben Bailey is a director of client success-sourcing at Valify. Ben leads the Valify PinPoint Benchmarking program, helping clients assess their vendor agreements and accelerating their RFP process. Prior to Valify, Ben worked for MedAssets where he managed the Analytics team with a portfolio of more than $20B.