CATEGORY: Business Performance Management
REVIEWER: Todd Richardson, budget manager for Mercy Health Partners.
BACKGROUND: Mercy Health Partners (Western Ohio Region) provides a comprehensive range of high-quality healthcare services including acute care, long-term care, elderly housing, hospice, home health agency, outpatient and REACH substance abuse services.
PLATFORMS: Microsoft Windows NT, Windows 2000 Server with Microsoft SQL Server 2000, Internet Explorer 6.0.
PROBLEM SOLVED: Mercy Health Partners of Western Ohio has in recent years faced the soaring costs of providing healthcare, changing regulations and constant reorganizations. In the midst of this changing landscape, our finance team decided that we needed to improve our budgeting and planning processes to contain costs and effectively expand our network of care facilities. Before implementing a business performance management solution for budgeting and planning, we recreated our spreadsheet model for budgeting each year. This is no small undertaking for a healthcare provider that budgets for eight separate facilities, comprising roughly 200 departments. In total, 150 to 200 users participated in the process, all editing budget worksheets for the salary and other operating expenses of the entire organization. All the worksheets needed to roll into something that made sense for each department and for the entity as a whole. As a result, accuracy was no guarantee. Budget planners also found it problematic to make changes in a timely fashion and were mired in budget preparation for months, making this process timely and unproductive. To change the focus of our efforts, we implemented Microsoft Business Solutions for Analytics-Forecaster from FRx Software. Forecaster is a Web-based business performance management solution for budgeting and planning. The application helped our finance department make each individual manager accountable for budget and forecast performance, allowing departments to take full ownership of their ongoing performance. It also offered self-serve abilities to drill into the numbers and track progress on an ongoing basis. Forecaster allowed us to immediately realize the benefits of implementing a budgeting and planning application.
PRODUCT FUNCTIONALITY: Using Forecaster, we've lowered labor costs and, more importantly, given decision-makers better access to information that, in turn, allowed us to make better decisions. In labor costs, we estimate that we save more than 30 person- days per annual budget cycle, which equals approximately $15,000 in salary. Forecaster enables this savings by reducing time spent recreating spreadsheets. We no longer need to worry about linking spreadsheets because all the data is housed in one central database. The application also reduces administrative and user-support costs and time spent creating custom reports. Finally, we've reduced time spent compiling data. Formerly, we prepared 200- to 300-page budget reports for each cycle. With the introduction of Forecaster, we virtually eliminated paper reports. In addition, the application lets us drill down into specific accounts and even specific income statement line items to determine why a particular expense is going up or how we can better address other cost- containment and budgetary issues.
STRENGTHS: Forecaster allows us to focus our efforts on real issues such as cost containment and long-term planning, rather than on menial tasks such as compiling data. With Forecaster, we now have the time and flexibility in the system to conduct in-depth analysis and make better decisions for the business overall.
WEAKNESSES: In order to graph and chart budget data, you must export data to Excel.
SELECTION CRITERIA: After in- depth evaluation of budgeting and planning solutions, we selected the solution that would provide the greatest deal of customization for our human resource budgeting while delivering a Web-based, security-enhanced, flexible and easy-to- use solution. The extensive HR functionality was an attractive feature because it allowed us to gain better visibility into our labor costs, one of our largest expenses. Even though the application is comprehensive, the solution was rapidly implemented, enabling us to shorten our time to payback.
DELIVERABLES: Forecaster allows us to easily create standard financial reports without having to download everything to our general ledger. We also have the ability to create reports completely defined by us for additional analysis.
VENDOR SUPPORT: FRx support is absolutely fantastic! They will pull in nearly anybody, including the programmer that wrote the code, to help us clear up any problem we might be having with the software.
DOCUMENTATION: The documentation has been helpful and easy to use.
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