Contracts for veterinary software and SaaS solutions

Key business solutions are just that: key. If the solution is unavailable or not working properly, it has an immediate impact on your business. The price over the life of the solution is usually chunky. A suitable contract is a vital tool for managing the supply and commercial aspects, implementation, and incidents that arise during use.

It’s a niche area, and this article cannot hope to be comprehensive. But let’s get stuck in and give you a flavour by shining a light on a selection of headline factors.

What’s a “key” solution?

It’s any solution that is essential to your practice — not just nice to have — because it helps you run the practice, provide services, achieve sales or margin, or manage something expensive or high risk.

Brace yourself: acronym attack, imminent! Examples of key solutions include Practice Information Management Systems (PIMS), Client Relationship Management systems (CRM), and Picture Archiving and Communication Systems (PACS). For some practices, virtual consultation solutions may also be key.

You might also view general business solutions as key, such as communication, finance, HR management and storage systems. Some solutions may be key because they are high risk, such as AI, some device, software or data integrations, and some marketing solutions.

Software, SaaS, hybrid — and hosting

This is a potential gotcha. It is about whether you or the supplier control the solution and its data.

With software, you typically control the solution, although there are exceptions, often called hybrids. With SaaS, the supplier typically hosts the solution and data, although again there are hybrids.

Who cares?

You might do: stay tuned.

Your human customers and staff care about their personal data, its location and safeguards. You care about keeping the key solution’s lights on, and the total cost of ownership.

Two global trends to keep in mind

There are two big factors and trends for you to consider.

First, the changing relationship between the US — HQ location of all the West’s big cloud and hosting providers — and the UK and EU has sent a shockwave through Government and digital tech communities. Many now see a stronger case for “UK/EU only” digital infrastructure.

Second, the trend is not all one-way towards the cloud. In the last five years, large organisations have started moving back to hybrid solutions and private networks. Why? Frankly, Amazon and Microsoft are perceived as being too expensive, although computing resource, storage and management are costly any which way.

And when a bad software update affects major services widely, it reminds the West that its digital tech is a bit too centralised. Eggs, basket: we need more baskets.

The basics: supply and permission

KISS: Keep It Simple, Stupid.

In return for a big chunk of cash, you want the supply of a solution, commitments from the supplier that they will include everything you need — no hidden omissions — and broad permission to use the solution in your practice, with your customers and supply chains.

It’s truly amazing how many key solution supply contracts skip some or all of these items. They are bargain-basement basic. Insist on having them covered in the contract.

Price, payment, licence, inclusions and dependencies

Exactly what the contract needs to say is subtle, so take an experienced guide with you. Key tips and gotchas to consider:

• Plan to pay the supplier in meaningful stages, linked to tangible results.
• For software, you want a licence. For SaaS, you want a commitment to supply a corporate account with a quota of user accounts across relevant staff, management and IT admin roles.
• You want written permission allowing use of the solution in all relevant contexts without additional charge, except where you need to increase your quotas.
• You want written confirmation that all components, including third-party devices and solutions, are included — or a clear list of the additional dependencies that you must budget for and buy.

Maintenance and support

These “neglected dark arts” are neglected because they’re difficult and boring. They’re so widely neglected that an entire industry profits from it, often aided by complementary social engineering: cyber crime.

The proportion of UK businesses that have Cyber Essentials Plus is still … small. This, in large part, is why.

Sunsets and updates

Do not neglect them. Embrace the boring.

You want to pin your supplier to a documented minimum service life: the number of years they will continue to offer your product and provide updates for it. You also want them to publish updates that can be easily applied.

Help desk and application management

You want to pin someone to applying the updates. Depending on the solution and your set-up, that might be your supplier, your in-house IT team, or an outsourced service provider.

And you want one or two of those candidates to provide you with a help desk, so you can raise tickets and fix the solution if it breaks.

Wonga

This is also about spending money wisely.

A typical key solution has a working life of 10 years. The cost of maintenance and support over that time can be similar to — best-case scenario — or dwarf — in some cases — the implementation and licence or subscription cost.

Surely, then, you want an enforceable, written contract for committed maintenance and support, with price controls, and giving the supplier or suppliers appropriate exposure to claims?

So why do many businesses pay significant amounts for maintenance and support against a half-page non-contractual marketing flier?

About that exposure to claims

Claims are demands for money, made by you to your solution supplier, when things go wrong.

In their standard terms or agreements, suppliers of key solutions typically insert “standard” commercial contract exclusions and limit their liability to the price you pay. We work for tech suppliers as well as vets … we know the tricks.

In a nutshell

The news is simple, and it’s a gotcha: “standard” commercial exclusions and limits don’t work from your perspective in this context. Your bad-case scenarios will typically cost 2 to 100 times more than the contract price.

Don’t try to boil the ocean — but do bring your kettle

There are some business-bursting risks here, and you generally don’t get a supplier to swallow them whole for you.

But you do need a contract liability clause that takes account of the key risks: unavailability, security incident, privacy breach and intellectual property claims. It should make a more-than-token attempt at covering them.

Take an experienced guide.

“I think I now prefer the blue to the yellow”

If, for example, your key solution includes workflows or other bespoke elements or options, you need to decide what you want and stick with it.

A good key solution contract will include a process for you to change your mind, as long as you do it in good time. But, as a general rule, set your requirements before you sign the contract, or as your first task after contract if time permits and if you really can’t finalise the requirements earlier.

Then try not to change them once they’ve been set.

Instead, invest your time in documenting your requirements. Make them comprehensive, clear and unambiguous, but don’t over-engineer them. It is then easier, and more cost-effective, to implement and maintain the solution.

Digital transfor-mess?

You might be planning a transformation project where you’re leaning on the new key solution so you can redesign staff roles in the practice, and restructure to some extent.

That kind of project requires steely clarity about the design of your “to be” organisation. The human element is about supporting your people to adjust to their new roles, and to the new tech.

A top tip: don’t view the project as being about the tech provider making an avalanche of detailed changes to the solution so it fits your practice and staff.

There must naturally be consultation, and some flexing, but you won’t realise the benefits from the new solution unless you allow your practice to be disrupted and reshaped to fit the tech.

Locking down the purchase

The wise veterinary practice will prepare carefully for the key solution purchase, using consultants who really know the market and can also advise on running a competitive tender process.

Formal tender? Give me a break!

Hear me out. It’s not for everyone, but there are some clear benefits. A tender can help you lock down some key commercial points:

• You can set the contract terms, or get early sight of each supplier’s terms, so you can take them into account when selecting your preferred supplier or solution.
• You can mimic public tendering practice and conduct market pre-engagement, or you can build discussion into the tender process.
• You can handle product demos carefully. They are potential gotchas: too many moving parts.
• You can take your refined requirements back to the market, or to your chosen supplier.
• In a well-conducted competition, suppliers will sharpen their pencils.

Lockdown in another sense

No, not that one.

The topic here is business resilience. So, if you were thinking pandemic and its impact, you’re kind of on the right track. It’s amazing how many organisations pay no attention to cyber-security and business resilience in their key solution contracts and projects.

Buck the trend. Especially if you’re planning to go anywhere near an investment or practice sale any time soon.

This isn’t a topic that’s easily fixed with a few choice cut-and-paste contract clauses. It cuts into your solution requirements and even your plans for running and scaling your practice.