SELECTING A HOME medical equipment software package can be a complicated and expensive process. It can also have a direct effect on a company's success or failure.

HomeCare Magazine has compiled two lists of key issues to consider when selecting a new operating system. The first list can assist in the preliminary search for potential vendors; the second is a list of focused questions to ask vendors once the field has been narrowed to the finalists.

Industry estimates put the life span of a typical business operating system at four to five years. So even if you are comfortable with the system you have, it will likely need updating or replacing within the next few years.

These tips, gleaned from HME and computer industry experts, are general enough to remain pertinent even with the rapid pace of technological advancement.

The First Round 1. Know your company. TO SELECT THE proper software, you need to know the present state of your business, as well as have an idea of its future direction. Are you planning an expansion or acquisition, or perhaps a downsizing? Will the emphasis remain on current market segments or spread to new ones? These are visionary questions best addressed by the boss. Knowledge of the answers is critical in choosing the proper system.

2. Analyze and prioritize. ASK YOURSELF, WHICH parts of my business are most ineffective? Which are most costly? Which are most time consuming? Which experience the highest inventory turnover? Which account for the most billing mistakes? Which result in the most inefficiencies? "Ask yourself why are you looking to change," says Spencer Kay, president of Fastrack Healthcare Systems, Plainview, N.Y. "Some companies don't assess that well. They tell me how miserable they are now. Then when they get a new system in, they tell me how great the old system was."

3. Network with your peers. TALK TO OTHER HME providers, especially those with similar business models and specialty niches. Businesses built around oxygen or wheelchairs have different software needs than those focusing on infusion. Follow the guidance of buying groups, some of which have consultants with automation expertise. Experts also suggest making site visits to providers using the considered software to see how they use it.

4. Get a certified vendor list from Medicare. THESE ARE AVAILABLE from your Durable Medical Equipment Regional Carrier or the DMERC Web site. They are not recommendations of vendors, merely a listing of vendors whose software has passed accuracy tests for electronic Medicare billing. With widespread consolidation, some of the data is outdated, but it can be a reference starting point.

5. Be prepared to research. IF YOU DON'T want to research software or delegate it to a key employee, be prepared to hire a consultant knowledgeable in the home care industry. Find a vendor who specializes in home medical equipment software. Include workers in the decision-making process. They must use the software, they know best what it must do, and they should be motivated to make it succeed. "Sometimes a president buys a program without talking to the people who use it, and those employees can make sure it doesn't work just to make the president look like an idiot," says Kay. "It can be like a Dilbert cartoon. This is mission critical, and a good manager will realize it's key to win over the employees."

6. Be realistic about expectations. NEW SOFTWARE is not a magic pill. "Some people think they can buy a program, and it will eliminate every problem in their life," says Kay. "Some don't understand why they buy a new program, and they haven't been able to immediately reduce their payroll. Sometimes the result is you keep the same number of people, but they are more productive." Be realistic about cost. Don't be so ambitious in wanting a system so versatile that it becomes cost prohibitive. And don't be so frugal that the software does not match the business focus, cannot adapt to different needs or be expanded for growth.

7. Understand the electronic data conversion process. THIS IS THE transition from the old system to the new one, which can be a nightmare without proper planning and execution, experts say. Data such as a customer's medical history or equipment rental history are more valuable than any software and hardware you may buy. The goal is to have every necessary contingency to make the data transition as seamless and orderly as possible.

8. Know what training programs and support the vendor offers. FIND A USER of the software. Vendors usually are willing to refer a potential buyer to a current user, but that allows the vendor to filter out unhappy customers. One suggestion is to ask the vendor for all users of the product, so you can decide which ones to contact. Find out details of the installations (how many days was the vendor on-site?), warranty and service staff (available weekends, nights?).

9. Understand the vendor's policy on upgrades and updates. ARE THEY FREE? Are they part of a monthly service fee? Are you notified when they are available? Can the software be modified to meet a your specific needs?

10. Negotiate all parts of the contract before signing. THIS IS BASIC business sense, but often it is overlooked when dealing in unfamiliar terrain. Everything is negotiable, from price to training and support to warranty. "You need contracts to protect both sides legally, but our goal is to have a win-win situation for both sides. And for that to happen, there must be compromises. We're quite flexible," says Robin Campbell, systems consultant for Computers Unlimited, an HME software vendor in Billings, Mont. Countless variables influence price, but most complaints about software involve training, support, compatibility and reliability-not price, experts say.

Once you narrow the field to a manageable number of vendors, it's time to start asking a series of more probing questions.

The Finals 1. What is the vendor's business strategy? MERGERS AND ACQUISITIONS are a crucial part of the business world, but they can interfere with the vendor's service. Of course, there are no guarantees. Also most vendors would not admit they were in the midst of a buyout anyway, but it doesn't hurt to ask the vendor to forecast his or her company two or three years down the road. That might shed some light on whether the vendor is planning on staying independent or merging with another company.

2. Is the vendor financially sound? AN INQUIRY INTO a corporation's finances was once as taboo as asking a co-worker's salary. But today, particularly if you are expecting to make a large financial commitment, it should be a crucial element in your decision-making process.

If a company is publicly traded, the information is readily available. With private companies, it often comes down to a blunt question posed to the salesperson. If the answer is not satisfactory, don't hesitate to speak to the company president.

Credit checks to see if the vendor's suppliers are being paid can be very revealing. The vendor is becoming a partner in a sense, so due diligence is appropriate. "A lot of vendors are in financial jeopardy," says Campbell. "Make sure that company will be around."

3. What are the vendor's technology plans?

BE SURE THAT the company you do business with is taking the same technological path as you to avoid any future potholes. If you make a commitment with a company for apples and in a couple years they specialize in oranges, you will be forced to seek a new program and refinance your system once again.

4. Has the vendor formed alliances with other vendors? IT WOULD BE a perfect world if one software company could provide your firm with every business solution. Because it can't, your vendor should have strong alliances to refer to when your problem does not fall under its specialty. If you believe the Internet will become a viable option for your business, be sure your vendor does too.

5. Who makes up the vendor's management team? TO BEST EVALUATE a prospective vendor, observe its management team. The owner, the company's vision, its organization and strategy are all crucial indicators of the company's performance. Is there unusually high turnover, for example, or a lack of organization? The inquiry process itself may illustrate responsiveness and may shed light on whether you would rather take your business elsewhere. Call and ask to speak to someone in senior management. That person's accessibility can be a yardstick of the company's commitment to customer service.

6. Who will work on my project? KEEP IN MIND that the individuals who will be working on your company's software transition will have access to every file on your computer. Request a list of personnel working on your project and their resumes, their training and experience. You should meet with all the members of the vendor's team and discuss your plans to make sure you feel comfortable entrusting your entire database to them. Learning whether a manager's compensation is tied to customer satisfaction can be an indicator of a company's commitment to excellence.

7. How will the solution be implemented? IF FAILURE OCCURS in an automation project, it usually occurs during the implementation process. Ask if the vendor's employees will handle the electronic data exchange or if the vendor will farm it out to a third party. Once payment is made to a vendor, you have no leverage to get satisfaction from a third party. Avoid outsourcing when possible, but always insist the vendor take responsibility regardless of who does the work.

8. How are training and support handled? BECAUSE THE TREND is toward hiring third parties to provide training and support services, you should inquire how the vendor can guarantee someone else's work. Is it monitored, managed, controlled, audited and graded? If the answer is not yes, you have cause for concern.

In the support category, glitches have the potential to generate continuous problems if not dealt with properly. A common problem is breaking one thing while fixing another. Again, the vendor must be held accountable.

9. How will my upgrades and warranties be handled? MOST COMPANIES FOCUS on selling their product, and in doing so, post-installation issues often fall by the wayside. It is crucial to understand what kind of upgrades the vendor offers, who will be installing them and if they can be distributed electronically.

A 30- to 90-day warranty that includes process and time-frame policies for fixing glitches is standard for most companies, but you might have to specifically ask for one. It is wise to phrase guarantees around your company's performance, especially if the vendor makes a sale based on a software's performance claim.

10. Does the vendor conduct customer satisfaction surveys? IF THE ANSWER is no, that either tells you the vendor doesn't care whether its customers are satisfied or doesn't want to know. Either way, it's not a good sign.

"We do quarterly calls with clients on an ongoing basis to make sure they are happy with the software," says Kent Barnes, marketing director of Team DME!, Nashville. "We also have a wish list they can fax to tell us what they would like added to the program."

A vendor that does conduct such research will probably be willing to share the results in some form, much as an HME provider might be asked for outcomes data when competing for a managed care contract. There is nothing wrong with requesting proof that a vendor can deliver on promised claims. The legitimate vendor should have nothing to hide. HC

The "Finals" list of vendor questions was adapted with permission from the April 1999 issue of Sales & Field Force Automation magazine.

For more guidance on selecting and installing automation in your business, please refer to the following back issues of HomeCare Magazine:

March 1999-"Pen to Pentium" (p. 42) The story can help you save time and money by making sure you invest in an automation system that is right for you and your company.

July 1997-"Choosing Your Way" (p. 45) This piece includes 10 tips from HME computer professionals to help you purchase the right computer system.

February 1997-"Keys to Success" (p. 34) This feature describes how to use automation technology to serve patients and buy products more efficiently.