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1 R O I C A S E S T U D Y P R O G R A M : E N T E R P R I S E A P P L I C A T I O N S D O C U M E N T Q 1 84 S E P T E M B E R BLACKLINE ASCENSION A N A L Y S T Seth Lippincott T H E B O T T O M L I N E Ascension deployed BlackLine s financials controls and automation platform to centralize and simplify its financial reconciliations. Nucleus found that Ascension was able to stand up BlackLine quickly and create an improved controls environment while realizing cost savings and increasing productivity. By leveraging BlackLine's automation capabilities, Ascension is positioned to expand its operations without corresponding workforce expansions. ROI: 338% Payback: 0.6 years Average annual benefit: $734,136 T H E C O M P A N Y Ascension is the largest non-profit health system in the U.S. and the world s largest Catholic health system. Ascension is committed to delivering compassionate, personalized care to all, especially those that are struggling the most. In 2015, Ascension provided nearly $2 billion in care to persons living in poverty and other community benefit programs. It has approximately 160,000 associates and 36,000 providers that operate at 2,500 sites of care in 24 states and the District of Columbia. In addition to healthcare delivery, Ascension subsidiaries provide a variety of services and solutions to healthcare professionals and organizations. Nucleus Research Inc. 100 State Street Boston, MA Phone:

2 T H E C H A L L E N G E Ascension was using a decentralized finance model with various divisions using many different enterprise resource planning systems. The accounting team for headquarters faced the task of 20,000 to 25,000 reconciliations that were typically tracked and shared on spreadsheets. As part of its larger strategy to improve its financial controls and automate processes, Ascension undertook the challenge of centralizing and standardizing its finance and accounting department in a shared service center. Cost : Benefit Ratio 1 : 2.4 T H E S T R A T E G Y After putting out a request for proposal, Ascension considered a few different accounting and reconciliation solutions before selecting BlackLine in October Ascension chose BlackLine for a number reasons, including: BlackLine s ability to provide integrated products. BlackLine's software-as-a-service delivery model and its web-based interface, which eliminated many IT barriers to implementation and user adoption. Ascension went live on BlackLine in only 90 days. BlackLine s focus on delivering its software and its client-centric approach meant Ascension didn t need to hire any outside consultants to implement the solution and could quickly get support for any issues that arose. TYPES OF BENEFITS Direct 70% 30% Indirect Ascension chose a phased implementation with BlackLine. The initial implementation focused on basic finance and account reconciliation. After users fully adopted the solution, Ascension undertook a secondary implementation focused on automation and adding further capabilities on top of the BlackLine system. Copyright 2016 Nucleus Research, Inc. Reproduction in whole or in part without written permission is prohibited. 2

3 CUMULATIVE NET BENEFIT 2,202, , ,208 Year 1 Year 2 Year 3 K E Y B E N E F I T A R E A S Deploying BlackLine streamlined and simplified Ascension s reconciliations and audits. Key benefits of the project include: Eliminating the need for IT resources. Ascension deployed BlackLine without using any IT resources, making the implementation a business project rather than an IT project. Reducing audit time. Ascension can perform audits in a fraction of the time with BlackLine, shortening the process by as much as 400 personnel hours. Improving employee productivity. Despite rapid growth, Ascension employees in the finance and accounting department could handle the additional accounts and reconciliations due to the scalability of the BlackLine software. Adoption of industry standard templates such as the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework, and laying the foundation for further productivity with the application of intelligent process automation tools. K E Y C O S T A R E A S Costs of the project include software subscription fees, personnel time to implement and support the application, user training time, and consulting costs for the second stage of the implementation. Copyright 2016 Nucleus Research, Inc. Reproduction in whole or in part without written permission is prohibited. 3

4 NET CASH FLOWS 1,368, , ,146 (240,938) Initial Year 1 Year 2 Year 3 B E S T P R A C T I C ES Ascension implemented BlackLine as a cloud-based solution and leveraged the ease of installation in order to eliminate IT involvement, which reduced deployment costs and time. Additionally, Ascension took advantage of the low maintenance the solution required and devoted one administrator to find and recommend process improvements to management. By leveraging BlackLine s automation capabilities, Ascension is now able to onboard large new clients without hiring additional staff. C A L C U L A T I N G T H E R O I Nucleus quantified the costs of software subscription, personnel time to implement and support the application, employee training time, and consultant fees for the second stage of the implementation to calculate the total investment in BlackLine. Direct benefits quantified included the reduced cost of audits and avoided FTE employee costs in the centralized accounting department. Indirect benefits quantified included the increased employee productivity due to BlackLine s capabilities and improved processes. Productivity was measured using the fully loaded cost of employees and a correction factor to account for the inefficient transfer of hours saved to revenue-generating activities. Not quantified were the additional savings Ascension accrued by eliminating support for old software and hardware, and time spent on spreadsheet maintenance that was required before implementing BlackLine. Also not quantified are future productivity gains enabled by the application of intelligent process automation tools in combination with BlackLine systems. Copyright 2016 Nucleus Research, Inc. Reproduction in whole or in part without written permission is prohibited. 4

5 FINANCIAL ANALYSIS BlackLine - Ascension Annual ROI: 338% Payback period: 0.6 years BENEFITS Pre-start Year 1 Year 2 Year 3 Direct 0 611, ,077 1,134,462 Indirect 0 216, , ,080 Total per period 0 827,692 1,218,677 1,676,542 COSTS - CAPITALIZED ASSETS Pre-start Year 1 Year 2 Year 3 Software Project consulting and personnel Total per period COSTS - DEPRECIATION SCHEDULE Pre-start Year 1 Year 2 Year 3 Software Project consulting and personnel Total per period COSTS - EXPENSED Pre-start Year 1 Year 2 Year 3 Software 180, , ,600 0 Consulting 20, ,000 Personnel 27,000 96,000 96,000 96,000 Training 13,938 9,346 15,265 22,154 Other Total per period 240, , , ,154 FINANCIAL ANALYSIS Results Year 1 Year 2 Year 3 All government taxes 45% Cost of capital 7.0% Net cash flow before taxes (240,938) 433, ,812 1,368,388 Net cash flow after taxes (132,516) 238, , ,613 Annual ROI - direct and indirect benefits 180% 223% 338% Annual ROI - direct benefits only 90% 107% 185% Net Present Value (NPV) (132,516) 90, ,450 1,012,806 Payback period 0.6 years Average Annual Cost of Ownership 240, , , ,835 3-Year IRR 219% 219% All calculations are based on Nucleus Research's independent analysis of the expected costs and benefits associated with the solution. Copyright 2015 Nucleus Research, Inc. Reproduction in whole or part without written permission is prohibited. Page 6