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CONTRACTING 101: TIPS ON WRITING
AND NEGOTIATING CONTRACTS
Matthew Werder, MA, CHCIO
Chief Technology Officer, Hennepin Healthcare
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Agenda
• Get grounded
• IT spend categories
• Contracting Basics
• Deep Dive• Managed Services• Software License Agreements
• Questions
• Legal / Terms and Conditions / BAA (excluded)
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Before 18791
Before 19091
1930s1
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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
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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
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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
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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
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Approach
• Sourcing basics• 7-step approach
• Understand your categories• Software• Maintenance• Managed services• Hardware• Others
• Top 10 suppliers – 80/20
• Partnership with supply chain
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Managed Services
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Managed Services
• What is managed services to you?
• What is managed services to finance, purchasing, contracting, etc.?
• One two deals are alike
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Deeper Dive – Managed Services
• PACS Service Management Agreement• Infrastructure aaS, maintenance, etc
• Key points• Service level agreements
• Uptime performance
• Lifecycle
• Hardware
• Cyber security
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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
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Software Licenses
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Deeper Dive – Software Agreements
• License Agreement
• Key points
• Understanding your license
• Uptime performance
• Software Assessment Management Tool
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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
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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
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Questions, Discussion, and Answers
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Contact Information
Matthew Werder
Chief Technology Officer
Hennepin Healthcare
Minneapolis, Minnesota