A key metric to analyzing the longevity of a software company is its research and development budget. That was one point offered by Richard Temple, a former hospital CIO who now serves as an I.T. consultant for Beacon Partners. Temple made the point during his presentation on assessing vendor viability. “You should request a break-out of the vendor’s research and development budget,” he said. “What percentage of revenue is devoted to R&D? How much goes into each?”
Without an adequate R&D allocation, software vendors may be hard-pressed to maintain certification of future iterations of their software, he noted. That issue frequently comes up after a merger. Legacy systems may no longer be maintained, leaving providers organizations dependent on systems that are being sun-set.
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