Creating a resilient, responsive analytic environment for a finance function
With new changes and requirements in healthcare, an Academic Medical Center (“AMC”) CFO came to Wellesley Partners knowing his finance team could not respond effectively to assisting the organization with its two critical strategic goals: reducing cost and navigating market-driven price reductions in a way that would not bankrupt the institution. He realized that accurate, real-time data was critical to their continued survival, yet they were lacking both the comprehensive data and the means to access what they had for urgent decisions.
Using a collaborative approach, combined with research and discovery, Wellesley Partners worked with finance teams across the enterprise to define a strategy and executable plan that would enable effective and efficient analysis and reporting for revenue, costs, financial results and budgeting. Together we defined:
- A 3-year strategy and roadmap for improving revenue and cost analytics
- A plan to create efficiencies in finance
- A 1-year executable plan including: prioritized features and functions phasing, approach and staffing
- A collaborative team operating across function specific areas of responsibility
- A governance structure to ensure success
- An Executive Business Case document for use by the CFO with leadership
Not only did this plan get funded by hospital leadership, it became the foundation for improving the dialogue with its Physician Organization around administrative collaboration.
The Finance Department at AMC had been operating within functional silos – payroll, revenue analytics, cost analytics, financial accounting – for a very long time. Multiple teams worked to provide financial information to different constituencies. Without a clear understanding of a broader purpose for the results of their analytics, nor a way to see how to become more efficient across teams, the teams were frustrated by slow, labor-intensive processes and by utilizing inaccurate data, much as they tried to reconcile and quality-control the data they had available. Lack of clear requests from business functions coming through poor communication channels compounded feelings of frustration.
Added to these issues, there was an institutionalized fear of change and lack of confidence in and knowledge of how to make the required improvements. For these reasons, the hospital was in grave danger of either sustaining price reductions unmatched by cost reduction, or alternatively, substantial volume loss. The potential financial ramifications were in the range of hundreds of millions of dollars. Critically important financial data was not accessible to analysts in a timely way.
Because of Wellesley Partners’ financial knowledge, business intelligence expertise and change management skills, the CFO brought us in to help with initiating a program to create a financial backbone to support a new world of analytics.
The Wellesley Partners process revolves around aligning teams to a clear plan driven by consistent values, effective processes and roles that are aligned with organization-wide goals. Major operational change always includes a component of change management including team development (pulling together the right team for change) as well as a short and long-term change management plan. Our integrated approach ensures that there is a clearly defined plan that includes stakeholder engagement throughout the process. [See Approach graphic to the left.]
The purpose of the Assessment Phase is to define the current state: what is happening now, what is going well, what needs to change, and to gauge involvement and buy-in from participants. At AMC, the assessment phase consisted of 25 interviews of workshop participants as well as executives and stakeholders in the finance project. Through a structured interview process, participants provided their view of the current system. Major themes included:
- Data gaps & data access challenges
- Inadequate hospital data
- Lack of management attention to the data infrastructure as a key enabler of the financial function
- Deficient operational management of data
- Lack of data integration
- Organizational and cultural impediments to change
Joint Planning: Workshop
Given the assessment data, Wellesley Partners went into the workshop with a clear picture of where the group stood and how to move forward with creating the momentum for change. The workshop took place over the course of three full days and was used to engage the team in their issues as defined in the assessment and conclude, through facilitation, how the team should move forward. The outcomes of the workshop were the definition of the following:
- Long term vision of financial data management for the enterprise
- Team ownership of and engagement in the plan for how to proceed
- Documentation of long and short term priorities
- Understanding of each other’s views and creation of collaborative solutions
The workshop was a success and the team left with the outline of a 3-year roadmap to support the strategic change.
Planning: Fleshing out Workshop Deliverables
Wellesley Partners took the roadmap, prioritized next steps and augmented the plan to include business cases, resources, budget and next steps. The CFO has taken the Executive Summary and socialized the needs and benefits across leadership. With a clear plan, defined business case and required resources, the CFO has been granted the implementation budget.
The four-month project provided the CFO with everything he needed to move forward with implementation of this multi-year plan with confidence. The cross-functional team worked so effectively that the Physician Organization associated with the hospital also engaged Wellesley Partners to facilitate a similar process within their finance organization.