Benefits of DSOs and MSOs consolidating technology vendors

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Duff Bourassa

Managing Director

Duff Bourassa

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Managing Director
As the Managing Director for E78 Partner’s Healthcare division, Duff works to partner with our clients to identify and solve their toughest challenges.  Having participated in over 20 M&A transactions within the Dental Industry, Duff has the unique expertise to provide guidance and thought leadership within the DSO space.  Having built a strong reputation in […]
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For dental service organizations (DSOs) and management service organizations (MSOs), achieving operational efficiency and ensuring seamless integration of services are critical priorities. One area where significant efficiency gains can be realized is in IT operations, specifically through consolidating IT vendors and establishing a common technology stack. This article will explore how DSOs and MSOs can benefit from this strategy.

DSO and MSO Vendor Consolidation: A Path to Savings

The fragmented nature of IT vendors and licenses across various locations in a DSO can lead to inefficiencies and inflated costs. By consolidating these vendors, DSOs can harness economies of scale and achieve savings across all locations. Vendor consolidation simplifies the IT landscape, lowers administrative overhead, fosters improved vendor relationships, and often leads to better pricing due to increased bargaining power.

The ripple effects of vendor consolidation span beyond direct cost savings. It also simplifies operational support, standardizes service levels, and creates an environment where technology solutions can be seamlessly integrated, offering a more cohesive user experience. High-quality and timely support becomes more manageable and predictable when dealing with fewer, more reliable vendor partners.

Creating a Common Tech Stack for Seamless Integration

When DSOs acquire new practices, integrating them into the existing operational framework can be a complex and time-consuming task. However, a common technology stack allows new acquisitions to integrate quickly and smoothly. It ensures that all practices, regardless of when they join the organization, are on the same page regarding technology, making training, support, compliance, and reporting uniform and centralized.

A common tech stack also leads to better data management and analytics capabilities across the organization. With a standardized set of technologies, data can be collated and analyzed from various sources to form actionable insights that can drive the organization forward. This unified approach paves the way for enhanced patient care through the efficient use of collaborative tools and the availability of comprehensive patient data, regardless of the practice location.

Efficient Management of Licenses and Compliance

Another benefit of consolidating IT vendors and creating a common tech stack is the efficient management of software licenses. With a consolidated approach, DSOs can centralize their license management, eliminate redundancy, and ensure that they are compliant with software licensing terms. This not only reduces software costs but also reduces the risk of non-compliance with software licensing agreements, which can lead to hefty fines and legal complications.

DSOs can adopt a proactive approach to license management that can adapt to the changing scale of operations, often facilitated by vendor partners who specialize in serving multi-location healthcare organizations. Vendor partners can assist in negotiating volume licensing agreements, leading to further cost reductions and ensuring that software usage aligns with organizational needs.

Overcoming the Challenges

The path to consolidating IT vendors and creating a common technology stack is not without its challenges. It requires a well-planned and strategic approach, considering everything from ease of implementation to the return on investment. The change management process involves buy-in from stakeholders across all practices, effective communication, and a smooth transition plan to minimize workflow disruption. Training becomes critical to bring all staff members up to speed with the new systems and processes, and careful project management ensures that the technology transition does not negatively impact patient care.

DSO leaders who have already embarked on technology consolidation projects suggest focusing on the long-term strategic advantages rather than short-term inconveniences. The transition process should prioritize maintaining high service quality and uninterrupted patient services during the transition period.

The Way Forward

Consolidating IT vendors and creating a common tech stack represent a strategic initiative for DSOs and MSOs eager to improve operational efficiency and integration. In a sector where margins can be tight, and competition fierce, these strategies can make the difference between a thriving organization and one that is struggling to keep up. As the industry continues to evolve, propelled by technological advancements and changing patient expectations, DSOs that adopt this forward-looking approach are likely to be the ones that lead the way in operational excellence and business success.

Overall, such technological standardization across practices affords DSOs and MSOs the agility to grow, scale, and adapt to an ever-changing healthcare landscape while keeping a keen eye on cost efficiency. Contact us to learn more about how E78 can help your DSO/MSO consolidate your IT spending and create a common tech stack.

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Meet the Author

Duff Bourassa
Managing Director
As the Managing Director for E78 Partner’s Healthcare division, Duff works to partner with our clients to identify and solve their toughest challenges.  Having participated in over 20 M&A transactions within the Dental Industry, Duff has the unique expertise to provide guidance and thought leadership within the DSO space.  Having built a strong reputation in […]
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