Are you Spending the Right Amount on Practice Software?

Optimise Your Practice Software Spend: A 5-Step Guide

In today’s healthcare landscape, software plays a pivotal role in streamlining operations, improving patient care, and enhancing staff efficiency. However, many medical practices struggle with managing their software expenses effectively. How much should you be spending? Are you getting the best return on investment (ROI)? In this video, we provide actionable tips to help you audit, evaluate, and optimise your software expenditures.

Optimise Your Practice Software Spend: A 5-Step Guide

Understanding Software Spend

Among medical practices, software spending typically ranges from 1% to 2% of equivalent practice billings. Outliers exist, with some practices spending as little as 0.5% while others allocate up to 4%. Whether your expenditure falls on the lower or higher end of the spectrum, the key is ensuring you're receiving maximum ROI.

Before assessing whether you’re overspending or underspending, ask yourself these five critical ROI questions:

5 Key Questions to Evaluate Software ROI

1. Is the software increasing patient satisfaction or improving care delivery?

2. Is it reducing staff workload?

3. Is it protecting your practice from fraud or human error?

4. Is it generating revenue or opening new income streams?

5. Is it improving operational efficiencies overall?

If your software doesn’t support these critical goals, it might be time to reevaluate its purpose and cost.

A 5-Step Process to Audit and Optimise Software

To ensure your practice is maximising its software investments, Kelly Chard recommends a simple, five-step process. Let’s dive into each step:

Step 1: Gather a Complete List of Software

Start by listing every software tool your practice uses. Enlist your team’s help or refer to your Xero file to export all relevant software expenses. This will give you a clear view of tools currently in use.

Step 2: Categorise Software into Functional Buckets

Group each software into specific categories or “buckets” based on its purpose. Typical examples include:

• Communication (e.g., email, messaging platforms)

• Online scheduling and payments

• Data insights and analytics

• Payroll and bookkeeping

You’ll likely identify 5–10 functional buckets. Categorising these tools provides visibility into how different software supports various aspects of your practice.

Step 3: Quantify Monthly and Annual Spend

Quantify how much you’re spending within each bucket on a monthly and annual basis. This step is essential for identifying areas of disproportionate spending or underutilised tools.

Step 4: Evaluate Software Effectiveness

Here’s where the real work starts. Engage with your team and audit software performance:

• What tools are actively used?

• What tools are underutilised or unused entirely?

• What tools have bugs, inefficiencies, or cause headaches?

• Are there missing features that could be useful?

Then ask a critical question: If a tool was removed, how would tasks be handled? This evaluation process will highlight inefficiencies and gaps in your systems. Refer back to the five ROI questions above to ensure your software investments align with your practice’s priorities.

Step 5: Eliminate, Consolidate, and Optimise

With a comprehensive list and evaluation complete, it’s time to act:

• Cut unused or redundant software. Double payments or forgotten subscriptions are common and must be dropped.

• Negotiate better terms with vendors. Explore price reductions or upgrade plans to take advantage of unused features.

• Consolidate functionality into fewer tools. For example, one software tool might offer features that make another redundant.

• Train staff to maximise software use. A lack of training often leads to the underutilization of available features.

At the end of Step 5, your practice should have an optimised software stack that maximises ROI while aligning with operational goals.

Balancing Efficiency and Expenses

Optimising software spend isn’t just about cutting costs. It’s about ensuring that every dollar you invest works towards making your practice more efficient, sustainable, and patient-focused.

By following the five-step process outlined above, you’ll have the tools to audit your practice’s software expenses, streamline operations, and position your business for long-term success.

Next Steps

Take time this week to review your software expenditures using the process above. With thoughtful evaluation and optimisation, you’ll not only save money but also improve the efficiency and effectiveness of your practice. If you need help in working through the five steps, the GrowthMD team is here to help.