“The general response was that such a development cycle would take a large team, mostly offshore, and 18-24 months to complete.”
Tom Carson, MD-IT
MD-IT originally built its online transcription platform with a third-party vendor of licensed platforms. Working with this company over several years and millions of dollars, they created a platform based on Microsoft technology that was licensed back to MD-IT on a yearly basis. As with many such relationships, change orders to the platform were expensive and slow to be acted upon. The license fees were enormous ($95,000/mo.) and, additionally, the vendor made a demand for extra cash payments upon learning of MD-IT’s latest round of financing that amounted to taking the platform hostage.
MD-IT needed to extricate itself from this relationship without damaging its current customer base. It began by asking its technical advisors, members of its board, and colleagues in the industry how to effect the transition they needed. The general response was that such a development cycle would take a large team, mostly offshore, and 18-24 months to complete.
When using the original platform, MD-IT was being charged fees and "adders" that aggregated to $95,000/month. Equivalent costs using the new platform (none of which are fees or licenses to Relevance or any other development partner) are now $40,000/mo. The $55,000/mo. savings means that, in reduced fees alone, the new platform would achieve full return on investment in 18 months ($660,000 per year in savings on licensing and other fees against a $980,000 investment in the new platform). Additionally, MD-IT was able to avoid extra-contractual demands for payments whose avoidance dramatically accelerates the date of full return.
Since launching the new platform, MD-IT has been able to add new features long demanded by existing and potential customers that have allowed them to increase both customer satisfaction and their customer base, further accelerating the date of full return.
On top of customer satisfaction, the new platform has allowed for higher productivity in the transcriptionist corps, due to usability, scalability and performance improvements over the original system. This new productivity boost increases gross margins by 24% over the original platform, translating to higher profits per transaction in the system. Having the intellectual property entirely owned in-house means that MD-IT has the freedom to explore leveraging the toolset to serve other markets, or to develop the platform to serve a broader base of their current market.
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