Are you planning for an upcoming lab informatics project? The experience of evaluating proposals for a large project can be daunting. No two proposals are ever identical. As a consulting company with 25 years of experience in laboratory informatics, we know that receiving multiple proposals with significant price differences causes confusion and raises more questions than it answers.
A laboratory information management system (LIMS) is a large investment that has the potential to revolutionize lab operations. However, LIMS products come with a wide range of capabilities, making the selection process challenging. Evaluating implementation proposals in an informed way can be equally confusing.
This blog post will shed light on the factors influencing LIMS proposal pricing and guide readers on evaluating proposals effectively.
The Base Cost of a LIMS Implementation?
A comprehensive LIMS proposal should have at a minimum, descriptions of six elements focused on what you should expect for each. Each of these should be covered in sufficient detail so that all parties can understand the expected time and resource commitments. These elements are:
Consultant Expertise and Time
Experienced LIMS consultants are worth their hourly rate. The estimate of their billable hours provided in the proposal should be evidence-based (calculated based on the consultant or vendor’s previous work on projects of a similar size and type). If the proposal preparation team can’t explain how they got their numbers, be wary.
The proposal should include a breakdown of the different skills required (e.g., business analysis, data migration, development, configuration, validation, training) and an estimate of how much time will be budgeted for each. This should be mapped to specific roles, ideally using a RACI chart (Responsible, Accountable, Consulted, and Informed). This breakdown should accurately capture the scope and complexity of the project as the consultancy understands it. If there are significant mismatches between your understanding of the project and the proposals received, some further clarification should be requested.
Subscription Fees and Software Licensing (if Vendor)
The proposal should clearly explain the options for user licenses and subscription models. The needs of your lab should be considered when estimating the number of necessary licenses. Because the goal is to reduce bottlenecks, the periods of peak testing demand should be the driving metric for determining how many licenses are required. The chosen system may also require ongoing subscription fees for support and updates.
Infrastructure Requirements (Optional)
There may be associated required access to hardware (servers, workstations), software (operating systems, databases) or network restrictions to work around. These should be outlined in the proposal, including whether the associated costs are included in the scope or if they are the client's responsibility.
Data Migration and Integration (Optional)
Migrating data from legacy systems is a big part of many informatics projects. It’s important to be sure you’re collecting all the required data from your legacy systems. If you want the provider to manage this, your vendor or consulting company may ask for samples of the data so they can understand the types of transformations that might be needed. Additionally, integrating the LIMS with other lab instruments and enterprise systems should be considered because of the benefits that enhanced data access can bring.
Customization and Configuration
The difference between customization and configuration is sometimes difficult to wrap your head around. Most LIMS products are quite configurable, meaning that there are settings within the LIMS that allow the product to be fit to many of your existing lab workflows. Sample and test types can be easily defined by the users. Configuration is work that anyone with a basic understanding of your lab and your LIMS can do without making any changes to the code.
Conversely, customization can be quite complex and requires skilled programmers who can change the underlying code to achieve the desired result. For example, you may need to apply conditional logic to a sample login process, or you may want a dashboard that displays specific information. Any customization may have significant impacts on the development effort and cost.
Validation and Compliance
If your lab operates in one of the regulated industries, you will need to factor in the cost of validation. At CSols, we have always taken a risk-based approach to validation, meaning that the higher risk functionalities receive the most rigorous testing. Any customization of your LIMS or integration with other systems or instruments will add to the validation cost.
Training and Support
Last, but not least, the proposal should include a training and support plan. Many LIMS implementations fail when there is inadequate user adoption. The right level of training and support can help to ensure that users can get the best experience from their new LIMS. The proposal should include a breakdown of the postimplementation support services offered and their costs.
Strategic Bidding: Why Some Proposals Might Be Lower
Now that we understand how the base costs are allocated, we can look at where the variances come from. There are intentional and unintentional reasons why a proposal might be lower than others. Some of the most common reasons are outlined here.
Scope Underestimation
Some vendors or consultants may underbid a proposal intentionally, hoping to secure the business and add change orders once the project has begun. Watch for incomplete estimations of the scope.
Proposals of this type inevitably accrue change orders and experience cost overruns later in the project. This is scope creep. The time and expense involved in negotiating change orders can drive the final cost of implementation far above what you might have thought was an unreasonable estimate from a more thorough implementation provider.
Lower Consultant Rates (and Potential Tradeoffs)
Vendors or consultants may use less experienced resources so they can offer lower hourly rates. Third-party or offshore resources can also be used to drive down the cost. Each of these potential solutions carries risk.
Less experienced resources may affect your project timelines or the quality of the finished project negatively. Some repetitive tasks can be accomplished with low-cost resources, but if the work touches any of the more complex elements, it’s possible there could be unintended consequences.
Offshore resources bring the risk of your data going overseas where data protection regulations may not be as strong. Depending on where the resources are located, you may encounter time zone challenges.
Limited Customization and Configuration
A lower price might mean that the proposal relies heavily on out-of-the-box functionality with minimal configuration or customization. If this is the case, the proposal may not meet all your needs.
Hidden Costs and Exclusions
Carefully review each proposal for exclusions (e.g., travel expenses, specific integrations, advanced training) or potential omissions of one or more essential components mentioned in the previous section.
Why the Lowest Offer Isn't Always the Best Choice
Throughout the proposal process, both the client and the service provider should ask enough questions to properly scope the work. Everyone makes assumptions in this process. It’s important to level-set appropriately. Any gaps in understanding regarding testing, data mapping, or project management (for example) ultimately fall on the client, and sometimes you will have to pay more to get it right.
To ensure that you can evaluate proposals equally against each other, even when the costs are quite different, there are certain areas to dig into and weigh.
- Long-term Cost of Ownership—this includes support, upgrades, and potential rework due to an inadequate initial implementation.
- Experience and Expertise—Look for specific qualities in a consultant’s or vendor’s team. Developers who are scientists can make any informatics project much easier to execute. An experienced LIMS Business Analyst (BA) is crucial for any informatics project. They bridge the communication gap between lab personnel and IT staff, translating lab needs into actionable developer requirements. This critical role prevents misunderstandings and ensures smoother project execution by anticipating challenges. For larger projects, a dedicated project manager can be a wise business investment.
- Quality of Solution and Fit for Purpose—Selecting a more expensive LIMS that truly meets your organization's needs and workflows can be more cost effective if it doesn’t require customization. A poorly implemented or inadequate LIMS will be difficult for your lab staff to use efficiently, which will continue to cost you money for years.
- Vendor Stability and Support—Choosing a financially stable service provider with a strong support infrastructure means you won’t have to worry about long-term support or updates.
We have had clients come to us after a failed attempt at implementation or validation. These clients had accepted an initial proposal that seemed reasonable on paper but then ran into problems. The problems have multiple causes—sometimes it’s poor change management or lack of training; sometimes the system wasn’t built correctly. If you take the time during the proposal process to evaluate your options fairly, you can avoid some of these missteps.
Making an Informed LIMS Investment
Evaluating LIMS proposals requires a comprehensive approach beyond just comparing prices. Be prepared to ask some key questions of the vendor or consultant during the proposal evaluation process.
The first important question to ask is, can you deliver a product that meets our needs? This question can be subdivided into three parts:
- Are your developers scientifically trained?
- What level of experience will the assigned resources have?
- Do the assigned resources have experience in our industry with the selected LIMS product?
The second question to ask is, what is the vendor’s or consultant’s approach to completing the project? This involves details like staffing levels, batching of deliverables, the project management style, definition of the minimum viable product, etc. This question helps you gauge the culture fit between your organization and theirs.
Culture fit is often a bigger issue than you may think. The culture can be organizational or country/region specific. We have found that flatter organizations have more issues with adopting a LIMS because someone needs the authority to make decisions.
You need to ensure that you’re comparing apples to apples in terms of the proposal cost and effort. If there is a broad range of costs or effort required, you’ll want to understand why. Is something built into one proposal that isn’t in the others? Is one proposal assuming that your organization will shoulder more of the project management, or that more time will be required of your resources in other phases of the project? These are important considerations that might not be deal breakers for you, but that should be weighed in the decision.
Your project will have a much greater chance of success if you focus on value, experience, and long-term fit when evaluating the proposals.
What’s the biggest mistake you’ve seen when an organization evaluates proposals?
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