It’s hard to go for more than a few days without reading another story about problems with federal and state health care exchanges. While the names of the vendors providing the exchanges vary from one state to the next, the core issues are pretty similar. Technology vendors are largely building customized web sites and back-end exchanges even though the contracts were typically won by initially pitching pre-built solutions, commonly known as commercial off-the-shelf products, to meet agency needs.
There is no question that pre-built, true off-the-shelf products deliver a unique value proposition to organizations. These solutions are often quickly implemented and easily adapted to rapidly changing business processes, and they are continually enhanced by the software provider, are higher-quality, available at lower prices, and can be quickly implemented with less risk to the agency. Custom-built solutions are often plagued with protracted delivery timelines and cost overruns, and most significantly, run a significant risk of project failure since the solution has not be used and proven in other agencies. The root problem is that many vendors are positioning their custom development project, state transfer systems, or generic product frameworks, as off-the-shelf solutions when they are nothing of the sort.
One recent example may be in Maryland where they are scrapping their health exchange technology to use Connecticut’s systems. A recent Oregonian article points out that Maryland’s Joshua Sharfstein said his state was victimized by an IT vendor, IBM/Curam, that promised “off the shelf” technology that did not deliver. While it’s unclear exactly what IBM sold to Maryland, it’s unlikely that it was a true off-the-shelf solution given that amount of product development that was required to deliver the web site. Agencies looking to take advantage of off-the-shelf solutions need to carefully examine how a vendor defines off-the-shelf.
The fact is, the concept of commercial off-the-shelf (COTS) software has been blurred by software and services firms that have hijacked the off-the-shelf term in order to market their custom development services, often in conjunction with state transfer systems or generic product platforms built for different purposes. Today, vendors and buyers define COTS as anything from one-off, in-house development projects to multitenant Software-as-a-Service (SaaS) solutions, and everything in between.
Harmony has written this white paper to help you understand if you are buying truly off-the-shelf product.