Q&A: Streamlining the purchasing process

August 13, 2007

Editor's note: Over the past year, Ron Schilling has been fielding questions from readers in response to his commentaries on business strategies in medical imaging. We are publishing some of those questions and responses and invite new requests for information.

Editor's note: Over the past year, Ron Schilling has been fielding questions from readers in response to his commentaries on business strategies in medical imaging. We are publishing some of those questions and responses and invite new requests for information.

Question: We are continuously making investment decisions for new equipment purchases. How can we streamline the process to make it more inclusive?

Answer:My initial reaction is to suggest the use of the Real-Win-Worth (RWW) strategic thinking tool (DI SCAN 6/2/06, Real-Win-Worth).

Let's examine the characteristics of the investment decision process using the RWW tool.

  • Simplicity. The process should be simple in concept so that it can be rapidly grasped by the stakeholders.

  • Clarity. When the factors in the process are combined, the level of clarity should be very high.

  • 80/20 Rule. For almost anything, 80% of the results are controlled by 20% of the factors involved.

  • Focus. The process should be able to zero in on the key aspects of the decision making.

  • Language. The factors should be able to provide a "language" that all stakeholders can readily grasp.

Based on the above, we can proceed confidently in considering the RWW as our solution approach. As an example, let's apply RWW to purchasing a scanner for CT angiography (CTA).

Real: How real is the situation in terms of the market to be served (is the market real?), and how successful will the product be in meeting the needs of the market (is the product real?).

In using the example of CTA, more than enough data are available to show that the market is substantial. Therefore, products are available to meet the needs of the market. In the case of CTA, the "Real" factor is essentially a given. This, however, does not mean that any entity can succeed.

Win: This takes into account the ability of the technology selected to be competitive (can the technology win?) as well as the capabilities of the entity or team in being able to provide a service that will win in the marketplace (can the entity win?).

In addressing the technology question, it would be helpful to create a High 5 (DI SCAN 4/7/06, High 5 highlights importance of understanding the competition )

The team should consider the key factors that are required for the technology to be competitive within CT, as well as other possible alternative technologies (e.g., MR angiography).

In this case, the entity or team may be the make-or-break factor that separates the winners from the average players. The complexity of performing the reconstruction and visualization process of 3D-type studies has increased rapidly over the last few years. Some experts will insist that only physicians can conduct this process themselves in order to get optimal results. Others will argue that their technicians are very well trained and, therefore, can do an excellent job without the need to involve the physicians. Some manufacturers will claim that they have advanced software that makes it easier for the techs to succeed at this process (perhaps this is a High 5 factor).

Worth: In most cases, this factor addresses the customer (e.g. the patient, the doctor, etc.) as well as the investors (e.g., administration, the entity, etc.). Obviously, if the situation is "Real" and the entity can "Win," there is a good chance it would be "Worth" it. The customer should consider issues such as supporting overall objectives. Administration can examine questions such as understanding the cash flow aspects to determine whether it can afford to make the investment in terms of return on investment and risk management.

In determining whether RWW can work for you, consider the following. Does it provide the simplicity and clarity that the team needs? Does it cover the issues with only a few important factors (80/20 rule)? Does it focus on the most important issues? And does it provide for a language that streamlines the process and allows all stakeholders to participate?

Shilling is an editorial advisor to Diagnostic Imagingand president of RBS Consulting in Los Altos Hills, CA. Comments or questions should be addressed to ronald11341@aol.com.