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Automating Your Practice, Part 2:
Deciding What Technology You Need (and Don’t Need)

by Technology Policy & Projects and Communications staff

This is the second article in a three-part series on automating a psychology practice. The first article discussed the benefits of automating routine administrative functions in a practice. This article explains how to identify the technology tools you need to run your practice in an efficient and cost-effective manner. The third article will provide sample technology configurations for various kinds of practices.

When it comes to automating a psychology practice, a common concern raised by practitioners is, "How do I decide what technology tools I need? How can I avoid getting more than I need?" To answer these questions, start by conducting a technology needs assessment.

This article explains how to conduct a technology needs assessment to identify computer hardware and software tools to automate your particular practice.

Conducting a technology needs assessment involves looking at several factors, including:

  • How information is used in your practice, and the way that you manage that information.

  • The goals outlined in your business plan

  • Available technology-based solutions

  • Your available resources, which includes your current technology infrastructure and your technology budget.

The goal of the needs assessment is to develop a cost-effective technology plan for your business that meets your current needs and creates or accommodates new opportunities to make your practice more efficient and effective.

Deciding What to Automate

A first step is to consider what activities you would like to automate. Looking at your practice functions, consider for each:

  • What activities/functions do you currently automate?

  • Which activities/functions do you perform manually?

  • Which activities/functions would you like to automate?

  • Which activities/functions are your highest priority?

Assessing Your Current Technology Equipment and Needs

Next, consider your existing technology infrastructure and what enhancements you would you like to make to improve your administrative operations.

Keep in mind that you will need a system that will grow with your business. For example, your computers and software should be upgradeable, allowing for future growth. If you are purchasing more than one computer (and you would like to connect them together into a network), each computer should have networking capabilities and all software should come with multi-user licenses to allow for more users as your business grows. Printers, fax machines or other additional hardware should also be ready for use on your network. (If you are just starting a practice or you are purchasing a new computer for the first time, review the article "Choose a Computer That's Right for You.")

In assessing your technology needs, consider the following questions in order to identify areas of your technology infrastructure that need to be upgraded so you can operate more efficiently:

  • What computer hardware do you currently have? Are you using all of the features of your current hardware? Start with an inventory of your existing computer and other equipment to determine if you need to upgrade or purchase additional equipment. If your computer, printer or other devices are relatively new, you may not need to purchase new equipment. If your computer and other equipment are not so new, you should determine whether you'll be able to upgrade or improve your existing system, or if you should consider replacing one or more components or devices.

  • What computer software do you currently have? Do you have the most up-to-date versions of your software, and do you regularly check for updates? Knowing the versions you have, and knowing whether they have been updated, will help you determine if your current software is the capable of working together with any additional practice management or financial management software you are considering. Updates to existing software often add new features, improve on old features and improve the way the software works with other newer software.

  • Are you using all of the features of your current software? Often a technology needs assessment reveals that many of the desired automated activities can be undertaken by better learning how to use features of existing software.

  • What operating system is on your computer? Is it the most up-to-date system that can run on your machine? Making sure that your operating system software is up-to-date is the best way to ensure that your data stays secure. For more information about data security, see the "HIPAA Security Rule Primer"

  • Does your operating system have local area network (LAN) and Wireless (WiFi) Network Capabilities? LAN capabilities will allow you to link more than one computer together in a network.

  • Do you have the capability to backup and restore your computer software and hardware? Do you have a backup drive, emergency power backup, or a disaster recovery plan? Being prepared for computer failure or a disaster is good business practice, and is required if your practice must be HIPAA compliant.

Assessing Your Practice Management and Financial Management Software Needs

Practice management and financial management software can be valuable tools for streamlining administrative functions in your practice, such as scheduling, record keeping and billing. When considering your need for this software, consider the following questions:

  • What information would you like the software to capture?

  • What reports would you like to run using the software?

  • How easy is the software to learn and use?

  • Who will be entering and maintaining data into the program? How often?

  • How much training and support is provided with the software? Can more be purchased?

  • Can the software be used by more than one person? Can users be added if your practice grows? If so, is there a cost?

  • Is the software installed or do you access it via the Internet (via an Application Service Provider, or ASP)?

  • Are upgrades included in the purchase price?

  • Are integrated add-on services available for the software? For example, for practice management software, is electronic claims submission available? For financial management software, is credit card processing or online banking available?

  • What additional features are included? For example, does the practice management software offer HIPAA compliance features? Does the practice management software offer security features?

  • Will the software work with your existing operating system and hardware?

Assessing Your Resources

Next, look at your current technology budget and conduct a cost-benefit analysis to weigh the benefits of investing in improvements against the associated financial costs. For example, consider whether you could recover the cost of hardware and software over the course of one year, ending the year in a better financial position than if you had not automated. Or, for larger practices that would require more elaborate and expensive technology solutions, could you cover the cost in three years?

Also consider whether you should perform certain administrative functions in-house or whether you should outsource them. Consider purchasing a service to handle such functions as credit card processing, electronic claims submission and billing if doing so will:
  • Improve your cash flow

  • Save you time (or give you more time with your patients/clients or family)

  • Reduce duplicate data entry and improve tracking

  • Reduce your overhead expenses

Likewise, consider whether you should buy or lease the computer equipment in your practice.

The following document provides a sample cost-benefit analysis, including a sample analysis of borrowing to purchase versus leasing:


Ideally, practitioners should assess their technology systems yearly to determine if software upgrades are available and needed and conduct a complete technology needs assessment every three years to ensure their computer hardware and software are up-to-date, secure and performing effectively and efficiently.

Additionally, it is a good idea to consult with an accountant or tax advisor before investing in new computer hardware or software, to determine which costs and payment terms might work best with your business and financial plans. 

Finally, consider documenting your automation processes and including them in your office policies and procedures manual. In addition to helping you demonstrate compliance with legal and regulatory requirements (e.g., the HIPAA Privacy and Security rules), this will make it easier to train staff or recreate your processes in the case of an emergency or disaster. 

A practitioner who undertakes this process should end up with a very specific list of hardware and software needs, as well as a clear assessment of the financial resources needed and available to support their purchase. Using this information, the practitioner should be ready to consider making purchases that will support the needs of his or her particular practice. 

The next and final article in this series will discuss the purchase, setup, and maintenance issues surrounding the use of computer hardware and software in your practice and will provide a variety of sample configurations suitable for different types of practices.


Date created: 2006