But on the other hand, you shouldn’t extract a huge penalty if the system is running a second slower than specified. If everything is defined, and well, in the statement of work as early as possible, you to know what you’re buying and the vendor knows because it’s written down. You don’t want to rush this part.

Besselman: First determine if a problem is their fault or our fault. Firewall, storage, load balancer — that’s our fault. A slow phone tree response is their problem. You have to be precise in how you’re testing. We did put penalties into our agreement, intended to keep them (the vendor) honest — such as (free or discounted) software upgrades. On security, we do that assessment before the vendor even comes on site. Vendors need to document a security penetration test with our head of security and share how they will keep us up to date on this.

Dennison: The big thing is how do you get access to your database if a contract is canceled. But it’s best to have small release points in a service contract to deal with specific issues rather than have to rely on a catastrophic cancellation. Also, a thousand-page agreement or contract does not make your life any easier at two in the morning (due to a system failure). Have a working, useful agreement.

Toland: A vendor should be able to anticipate problems. We conduct quarterly reviews to make sure the vendor is meeting performance metrics. The system should be able to tell you that. For example, I get a message on my cell phones if the PACS system is running slow.

There are a lot of smaller companies that have been in business for five years in the enterprise space. What are some tips for working with them?

Toland: Have language that covers what happens to the contract if the smaller company gets bought out to by a bigger company. We have language in our standard agreement that covers this scenario.

Besselman: Do a financial background check to make sure the company is viable.

Coleman: Part of our job is to help the vendor be successful. We work with a lot of smaller companies because big companies are not as likely to make exceptions for what we need. I enter these agreements with a win-win mentality because if I do well, they will do well. The statement of work should be discussed as soon as possible

Dennison: You can put source codes into escrow, so if the company disappears, you can get your information back. It's considered to be a bit archaic, but it can be done, and there are attorneys who specialize in these types of arrangements.

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