Should Health IT Consulting Companies Do Software?

I’ve had a lot of conversations recently with a lot of the top health IT and EHR consulting companies out there today. I imagine this is partially a result of attending the CHIME Annual Forum and also bringing the Healthcare IT Central’s job board into the Healthcare Scene network. Either way, I’ve been intrigued by all the various approaches that healthcare IT consulting companies take.

In one of my conversations, someone suggested to me that if a health IT consulting company does software and consulting, then it angers the health IT software vendors. On its face you can see where this could be a challenge. In some cases it can turn a consulting company into a competitor with the software company. I think there’s a nuanced way to approach this that can avoid the issue in many cases, but no doubt it takes a unique leader with a special vision to handle the balance.

In another conversation with Ivo Nelson we were discussing his software and consulting company. I asked him why he had two companies with practically the same name and addressing much of the same market area. He then told me that it was because he believed that it was really hard to have a software company and a consulting company under the same roof. As we talked more I realized that the real challenge is that if you try and do both, one of them becomes the red-headed step child that doesn’t get enough attention (nothing against red heads or step children since I love them both).

What do you think? Can a consulting company also be a software vendor? I look forward to hearing your thoughts in the comments.

About the author

John Lynn

John Lynn

John Lynn is the Founder of HealthcareScene.com, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference, EXPO.health, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.

6 Comments

  • Yes, I think that a consulting company can be a software company especially if the consulting company brings their middle-ware software tools that provide true seamless interoperability between existing disparate legacy systems. That allows their client vendor neutrality, application independence, minimizes the need for retraining, yet integrate HIT with ERP, the exchanges and all the supply chain verticals at a very affordable cost.

  • I agree with Robert, that a consulting company can bring great value add to clients by providing a software solution. I would add that a proper software solution would be built upon a common HIT development/deployment platform. If this platform were subscription-based, there would not be the conflict of interest between the software platform vendor and the HIT consultant. This could be a synergistic relationship. A proper platform would have hooks into other platforms such as ERP, Exchanges, etc. as Robert describes, for integration of work flows with the HIT platform.

  • Having a long career with a large corporation that built software, did consulting, and provided services for custom-built software, I saw many good and bad aspects over the years. Services always wanted to build, so they tended to campaign against their own company’s software offerings (so much so that the software division created their own services group). Consulting was so concerned at being seen as partial that they often recommended a competitor’s software when their own company’s software was actually the best fit for a particular customer. And, of course, the software group was often guilty of trying to jam a square peg into a round hole because they had to sell what was on the cart, and were concerned that bringing in services or consulting would hurt their chances at a sale. The main message we heard from customers was either have 3 different companies or come to us as one company, communicate with each other, and have a consistent message. While it almost never happened, the best scenario was for senior management to decide what our strategy was, and make sure everyone stuck to it. Almost impossible, but the customers appeared to appreciate it.

  • Carl,
    I think you described well the challenges that happen when you try to do both. Thanks for describing it in more detail than I did in the post.

    I’m not saying you can’t do both. In fact, there are advantages to doing both because consultants often know what software systems are needed. It’s just a challenge when you go to sell.

  • Another way to look at it is to view the struggles that many HIT software vendors have with developing internal professional services capabilities. Especially for smaller, high growth companies it’s really tough to invest in and grow engineering and professional services organizations equally. Which is problematic if the software is good but the PS (read, customer service) is not.

    If the software build by consulting company is complementary to specific products or categories then I agree they can add great value to their vendor partners. The only trouble is focus like Carl mentioned.

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