There are many reasons to switch RMIS. Organizations switch systems typically when the current system is thought to no longer meet its needs or does not have the latest technology capabilities.
The RMIS Report User Survey tells us that 38 percent of respondents have switched systems in the past four years. The survey also tells us that an additional 15 percent are currently in the market or will be in the next 12 months. That is more than 50 percent that have switched or are planning to switch.
In the past 10 years, technology has changed exponentially, and the definition of risk has continued to broaden as well. While many organizations continue to invest and enhance their system, not all of the enhancements make it to the existing client base. Many installations are on premise, and upgrades are not as frequent or mandatory as they are if they were in a software-as-a-service (SaaS) model. Other vendors support multiple versions of their system and may charge to upgrade to the latest version. In fact, 35 percent of our respondents have been with their current RMIS for over 10 years.
All of these factors lead to switching systems. But while switching systems can be exciting and offer more capabilities, it can also be daunting and expensive. The RMIS market is very competitive, and that has made it a buyers’ market in many ways. But there are other costs to consider beyond the implementation and annual systems costs that should be considered and understood when switching systems.
Needs Assessment/Business Review/Market Research
To support the goal of switching systems, a thorough needs assessment, requirements gathering, and identification of desired results must take place. Whether you do this on your own or use a third party to perform the review, there is a cost to the organization in this process.
The next step is to identify potential vendors that can meet your needs. The RMIS Report is a source for that type of analysis, but time and cost will be invested in this phase as well. This is where an independent consultant who knows the market can bring significant value and pay for themselves. Their knowledge of the market, similar projects, and vendors’ capabilities can be invaluable.
RFP/Vendor Selection/Contract Negotiation
The vendor selection process, whether it’s a formal RFP or competitive situation, can be time consuming. You also need to ensure that you are comparing apples to apples when reviewing proposals and comparing with your current vendor.
What costs are included in one vendor’s pricing compared to another? Is there software or hardware needed to run the system that is not included in the proposal? What about licenses for third-party reporting tools? How does the vendor handle subscription and maintenance fees? What annual increases can be applied automatically within the contract period? Does the license include all the system capabilities or just the features that you need today? What is the cost of integrating with other systems? These are just a few of the factors that must be understood when evaluating systems.
Implementation and Data Conversion
Once you have selected a new vendor and signed a contract, you are not out of the woods yet. Most implementations experience unforeseen delays and previously unidentified requirements that were not originally contemplated. These costs can add up. We recommend setting aside an additional 20 percent of the total implementation costs to address these types of unexpected costs.
One of the more significant costs of switching systems is the cost of converting the existing data to the new system. In our experience, this is the most common underestimation, leading to delays and additional costs. Additionally, one of the costs that many organizations fail to account for is the costs associated with extracting the old data from the vendor that you are moving away from. These unexpected costs, if not negotiated up-front, can be significant. We recommend that you build into your existing RMIS contract the data extraction services and associated fees so that if and when you decide to switch systems, you know what the costs will be.
Despite all the potential unexpected costs, switching systems can be a very good investment. A new system can bring benefits to an organization like improved workflow, new system capabilities, and reduced administrative costs among many others that can far outweigh the switching costs. Additionally, the switching costs should be seen as an investment that pays over many years to come.