An analysis of the relationship between a pathology department and its laboratory information system vendor

The ongoing collaborative relationship between a pathology department and the vendor of its laboratory information system is vitally important because of the strategic importance of the laboratory information system in managing the information product of the department. Laboratory information system vendors are value-added resellers in that they produce software and package it with hardware manufactured by another manufacturer. The success of laboratory information system value-added resellers in creating information systems that are highly functional depends on their forward vertical quasi-integration into pathology departments. Because of this relationship, laboratory information system value-added resellers exert a significant degree of control over departments, largely through the creation of switching costs. There are a number of strategies by which departments can exercise greater control over vendors, one of which is to serve as either an alpha- or beta-development site for the vendor's software. Such a strategy is not without risk, but it achieves the dual purpose of enhancing both the expertise of departmental personnel and the quality of the software product.