Drawing an ACE- Greetings from Chicago

I arrived late Monday night in Chicago to attend the Allscripts national user conference. Allscripts calls their soirée “ACE” for the “Allscripts Client Experience.” If you heard anything about the incredible series of storms that hit the Chicago metro area (leading to the evacuation of the stands at Wrigley field at one point during the game), I was driving into town right in the middle of all of it.

Here are a few random thoughts. I’ll go into more depth later…

I’ve enjoyed several speakers, but two stand out:

Chunka Mui gave a talk to the Executive forum yesterday, based on his newest book called “Billion Dollar Lessons”. We all got an advance copy of the book, which should be available through regular channels in another week or two.

The concept of the book is kind of the inverse of work like Tom Peters and others that look at companies that have been wildly successful. Mui and his co-author, Paul Carroll, look at notable failures and try to find important lessons in why things didn’t work out. Rather than “Good to Great”, “Good to Gone.”

This morning we had a keynote from Bill Strickland. Strickland has dedicated his life to addressing educational needs, especially in “bad” neighborhoods. One of Strickland’s themes was the idea that “Environment drives behavior.” He’s put that into practice by building a remarkable jobs training center and community arts guild in Pittsburgh, an effort that’s now being replicated in cities around the country.

I would defy anyone to make it through Strickland’s presentation without getting some brain circuitry rewired. You can read his story in Make the Impossible Possible, written by Vince Rause. (You can get to the book from his site I linked to above.)

If you are at all familiar with Allscripts, you know that they’ve had a rough patch for about the last year.

They had a perfectly good EMR product that was beginning to run out of headroom with its current configuration and underlying technology. They were still some distance from running out the string, but I credit the boldness with which they decided that it was time to make a dramatic shift; making major changes to the user interface, leveraging .net to enhance client-side capabilities, and incorporating SOA tools to improve flexibility and connectivity.

Where they screwed up was in underestimating the complexity of what they were taking on. THREE YEARS AGO at this show, they were beginning to sell the concept of Version 11 to their customer base, even though they hadn’t written a line of real code. They estimated the cost of the project at about $20 million.

Months ticked by. Deadlines came and went. Customers like us asked about getting on the list for this great new product. By two years ago the promises were getting more specific, but still no firm dates.

Finally, last year at this time we got to hear from the first couple of beta customers and the company announced that they were ready to go to general release. They weren’t.

I’ve got no inside information, but I believe that the biggest problem was prematurely building an appetite for something, then succumbing to the pressure to bring it to market, even though it was only about half-baked.

Early adopters got slammed. Physicians aren’t always the most patient end users.

Company financial results suffered. Wall Street noticed. Last October their stock was trading around $28. Five months later they bottomed out under $9.

The company put on a full-court press to fix the problems, with five point releases and who knows how many hot fixes. But with all the attention focused on digging out of the V11 hole, the rest of the installed base that was still on some flavor of V10 felt neglected.

They now have 50 clients running the V11 product- I’m not sure how many are new and how many are upgrades. There are another 80 or so in progress. They’ve signed 50 new customers for their big EMR product in the last few months.

Oh, by the way, the real price tag for V11 related development is now around $38 million.

Tuesday they announced their results for the second quarter. They were pretty good, and better than the analysts were expecting. The stock has bounced back up over $14.

One presentation we heard yesterday indicated that the company is planning to have ALL customers off the V10 platform by the end of 2009. Forgive me if I’m skeptical on that one. I’m feeling good enough about the progress they’ve made that I’m ready to get back in line for the upgrade- though it looks like we won’t be able to get a slot until Q2 next year.

We’ve got another half day of sessions tomorrow, after which I’m driving back to southeast Ohio. I’ve got some interesting information on the progress of the Misys/Allscripts merger that I’ll share in the next day or so.

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