Three Best Practices in Planning and Forecasting -- and How to Apply Them

Transcription

1 Three Best Practices in Planning and Forecasting -- and How to Apply Them Nicole Diceman Product Marketing Manager Prophix Software Connie Noonan Finance Manager Community Physician Network Wednesday, September 4, 2013

2 The office of finance faces new challenges Companies today can access more data. They need to forecast more often. Collaboration is a fundamental requirement. Up next: Three best practices

3 Three best practices Keys for Success 1. Align organizational focus on Planning Increase bandwidth Focus on efficiencies & inefficiencies: Process, People, Infrastructure 2. Broaden ownership and accountability Provide value and empowerment 3. Take small steps Don`t try to Solve world hunger over night

4 Align organization focus Process Finance centralized Limited ownership & accountability Limited collaboration Data aggregation timing Manual & error prone Unstructured People Bandwidth issues Struggling to just get numbers together Analysis is an afterthought Employee Skill Business & IT exposure Infrastructure Under developed infrastructure Excel based Integrity issues Security issues Control issues Unable to support business needs

5 Broaden ownership It`s that time of year again Budget Season My experience Favourite time of year Time devoted to strategy

6 POLL #1 How many different individuals are currently involved with the planning process at your organization? More than 20

7 Broaden ownership Corp- CEO Grow company by 25% GTM- COO Achieve revenue of $50M Finance- Team Streamlined, collaborative, timely planning

8 Broaden ownership Observation on others Frustration Wasted time Need to turn this around Facilitate collaboration Involve line managers

9 Start small, and take smalls steps Focus on pain: budgeting, forecasting, reporting process? Financial translation of the Plan Need to focus efforts on the Plan Developing the Plan Monitoring execution on Plan Revisit plan as assumptions change Failure is related to misalignment of activities and focus Recognition of this is driving the need to improve

10 When an organization cannot x Keep it current, keep it relevant x Track performance x Make it easy Process and supporting solutions

11 POLL #2 What is your company currently using for budgeting, planning and reporting? MS Excel MS Access GL Other

12 Reality of Traditional Tools Lacks detail Detailed operational forecasts are nonexistent Fragmented Functionality split across multiple interfaces, technologies Inflexible Could not easily adapt to changing business Local Scope Narrowly deployed without a complete view No Measurement Difficult to track against industry benchmarks and actuals

13 Realties of Today Process Prep Budgeting Process (Bottoms Up) Top Final Down Approval Revisions

14 Existing Challenges Out of Date Process Prep Budgeting Process (Bottoms Up) Top Final Down Approval Revisions

15 Thank You! Keys for Success 1. Align organizational focus to Planning 2. Broaden ownership & accountability 3. Take small steps

16 Budget Cycle Evolution Wednesday, September 4 th, 2013 Connie Noonan Finance Manager Forecast & Reporting

17 Community Physician Network One of the area s largest multi-specialty medical groups with more than 100 locations across central Indiana. Includes more than 500 primary and specialty care providers. Physician developed and led group practice that functions as a partner of the Community Health Network. Community Health Network Founded in 1956 with the opening of our east side hospital which was funded entirely by local businesses and private citizens. Ranked among the nation s most integrated healthcare networks. Includes specialty and acute care hospitals, health pavilions, surgery centers, home care, MedChecks, behavioral health and employer health services. 17

18 My Role Manage Quarterly Forecast/Annual Budget process Global Administrator for CPN s Corporate Performance Management (CPM) Solution Responsible for all Financial and KPI reporting to Operations Management, Physicians, Executive Leadership, outside consultants, Assist Finance and Operations teams with data review 18

19 2008 Budget Cycle 2 full time financial analysts responsible for pulling together the annual budget using Excel spreadsheets: 70 site managers across multiple locations 12 Regional Practice Directors and Executive Leaders 190 FTE primary care physicians and nurse practitioners 550 FTE staff employees Budget at practice level, then allocate down to providers Separate account roll ups for network vs. operational reporting Summary consolidation for Board and Finance Committee Final load to general ledger for monthly reporting 19

20 2008 Budget Process Update / Format massive spreadsheets Add new practices, providers, accounts Edit links and formulas Add base assumptions Export GL Data and copy into spreadsheets Divide and distribute templates to sites Collect data from sites and consolidate 20

21 2008 Budget Process (continued) Report consolidated budget Export Excel budget data into Access Generate journal entry to post to GL Use reporting software to view budget Executive leadership review Change in assumptions made to spreadsheets Consolidated reports re-generated 21

22 Poll #3 What are you looking to improve in terms of planning, budgeting and forecasting at your company? Fee free to select any choices that apply. Having a more collaborative planning process Having a unified solution Having one secure version of the truth Having direct integration to source GL data 22

23 Why Change? Difficult for sites to follow Security Distribution Accountability Scenario planning Duplicated efforts Wasted time Consolidation Manual process Errors Reporting and analysis Not adaptable to growth and changes 23

24 Milestones 24

25 Milestones 25

26 We are Growing BUDGET BUDGET Total Operating Revenue $66.2M $174.6M Net Income before Provider Comp & Benefits $10.8M $48.9M Physician FTEs Mid-Level Provider FTEs Staff FTEs wrvus 718,419 2,312,476 Visits 579, ,309 Number of locations

27 How We Budget Now Use CPM Software to. Build assumptions and pre-populate budget Automatically sent templates to sites Track submissions, deadlines, and approvals from management Automatically consolidate data Perform on-the-fly analysis Compare multiple scenarios Report results in multiple ways Region Comp vs. Guar Physicians Specialty 27

28 Greatest Benefits of CPM Software Single source of truth Quickly change assumptions Data review Reduce errors Easily consolidate data Uniform reports with little effort Automatically distribute and collect Compare multiple scenarios SAVES TIME 28

29 Saving Time with CPM Software It used to take us 5 months to prepare and finalize the budget Time spent mostly on pulling the data together, formatting, adjusting formulas, consolidating then reworking the data Very little time to review data Now it takes us 2 months Minimal time spent on populating, formatting, and consolidating Most of our time is now spent on review 29

30 Future Plans for Improvement Workflow process for entire budget cycle Automate balance sheet assumptions Automate provider compensation calculations Build reports for routine leadership inquiries: Driving factors for changes to budget Net impact of new acquisitions Net impact of new providers Admin staff changes by employee 30

31 Q&A Nicole Diceman Product Marketing Manager Prophix Software Connie Noonan Finance Manager Community Physician Network