1. Software development is difficult!
Sure, it looks easy. Just hire a project manager and some developers. But before you write that check, search Google for software project failure, and look at the number of zeroes in the costs. Even the experts who develop software as their main business have trouble delivering projects on time with no major defects.
2. You don’t have enough resources to run a hospital AND manage a capital development project
There is no hospital anywhere that has spare time, so any project you begin at your hospital will take resources away from your primary mission: patient care. Don’t be deceived about development costs and timelines, either. According to the Software Development Cost Estimating Guidebook, “A realistic estimate is based upon a solid understanding of the software development process and the historical data…” – neither of which your organization has.
3. You can’t achieve economies of scale to cover your sunk costs and ongoing maintenance
Again, software is very expensive to develop and maintain and only makes financial sense if you can sell or license it to many customers. Can your hospital afford to increase its operating overhead? How will you measure return on investment for this project? Don’t forget to track patient outcomes, throughput (revenue), and employee satisfaction, both before and after your project. And you have to keep sunk costs and ongoing maintenance LOW because you can only amortize these expenses across your organization instead of a large customer base.
4. Captive users don’t give honest feedback
When you have a problem with vendor-provided software, the solution is simple and painless: pick up the phone! When you have a problem with internally developed software, there is a natural tendency to mute complaints for fear of job security. Will you get honest feedback from users if your multi-million-dollar project has poor usability? Nobody wants to be the person to tell the executive sponsor that their capital investment was wasted.