CONTRACTING 101: TIPS ON WRITING

AND NEGOTIATING CONTRACTS

Matthew Werder, MA, CHCIO

Chief Technology Officer, Hennepin Healthcare

Agenda

• Get grounded

• IT spend categories

• Contracting Basics

• Deep Dive• Managed Services• Software License Agreements

• Questions

• Legal / Terms and Conditions / BAA (excluded)

Before 18791

Before 19091

1930s1

Meet Toasteroid = The Smart Toaster

Retrieved from:https://www.kickstarter.com/projects/258723592/toasteroid-first-app-controlled-smart-image-toastehttps://www.youtube.com/watch?v=wkOQ5l7i2tE

IT Contracting is

• Contracting is more complex

• Extends beyond function

• Dramatic license changes

• Regulatory implications

• Rigid compliance & audit threats

• Cyber, financial, and performance risk

RidiculousCOMPLEX

Basics• Keep this simple

• PREPARE

• Single point of contact - ALWAYS

• Know thyself and the supplier• Industry and market trends (mergers,

bankruptcy, breaches, etc.)• Top 10/20 vendor

• Understand your keys points• Deal breakers

• Seek key stakeholder input and requirements

How confident are you that you are getting the best deal amongst your contracts?

Text to (650) 600-9016

1. 100% - 121346

2. 75% - 99% – 121347

3. 50% - 75% - 121348

4. Less than 50% - 121349

5. Please help! Zero% – 127900

Approach

• Sourcing basics• 7-step approach

• Understand your categories• Software• Maintenance• Managed services• Hardware• Others

• Top 10 suppliers – 80/20

• Partnership with supply chain

Managed Services

Managed Services

• What is managed services to you?

• What is managed services to finance, purchasing, contracting, etc.?

• One two deals are alike

Deeper Dive – Managed Services

• PACS Service Management Agreement• Infrastructure aaS, maintenance, etc

• Key points• Service level agreements

• Uptime performance

• Lifecycle

• Hardware

• Cyber security

Service Level Agreement / Uptime Performance

• 99% = 3.645 days• 1 hour planned downtime per month

• Negotiate 100% uptime performance

• Avoid the penalty compromise battle

• Revenue source of maintenance agreements

Software Licenses

Deeper Dive – Software Agreements

• License Agreement

• Key points

• Understanding your license

• Uptime performance

• Software Assessment Management Tool

Deeper Dive – Software Agreements

• Know your inventory

• Maintenance Cost• Inevitable but do you need it?

• CPI/Inflation/Price Increases

• Enterprise v Seat v Concurrent Licenses

• Overbuying Trap

Be A Pro and…

• Focus on total cost

• Technology Supply Chain Council

• R/R between Purchasing/IT

• Group purchasing organization (GPO)

• Balance cost-risk-control

• IT Asset Management (software and hardware

• Institute for Supply Management (ISM)

• CSCMP's Supply Chain

• CHiMe

• HIMSS

Questions, Discussion, and Answers

Contact Information

Matthew Werder

Chief Technology Officer

Hennepin Healthcare

Minneapolis, Minnesota

matthew.werder@hcmed.org