With the recent focus on maintaining adequate healthcare coverage, the declining nurse workforce, and the need for cost containment, hospitals have been challenged, once again, to do more with less. So we are back to “best practices” and “business optimization” that is enabled by the leading technologies.
Although different hospitals will find different land mines in the budgeting & planning process to leverage business process changes, those who have implemented Best Practices agree that certain costs are more commonly overlooked or underestimated than others. Change Management or Business Transformation are often the consulting costs that scare many hospitals from moving forward. However, today’s ERP solutions are not your father’s ERP and typical implementations are now six to nine months and not 18+ months and do not require the old Big accounting firm’s heavy costs.
How and why the change: Best Practices are enabled via the ERP “out-of-the-box”. These include the following which you can begin today.
Sample Finance Best Practices

  • Procurement Card utilized for small-dolloar purchases
  • Perform supplier self-service for standard inquiries
  • Automate workflow of electronic or imaged invoices
  • Payables processing is largely centralized or in a shared services, with less than 20% of the total process cost from local support
  • Centralize Accounts Receivable Processing
  • Promote customer use of electronic payment mechanisms which include remittance information
  • Net inter-company accounts payable and accounts receivable transactions
  • Enable budgeting through an integrated information architecture and business intelligence platform that is used consistently throughout the organization. Budget Data, forecast information, and actual data are seamlessly linked
  • Standard Reporting is automatically generated and disseminated based upon standard or on demand reporting cycles. Information is proviced on both demand pull and system push
  • Standard Chart of Accounts utilized company-wide with common data definition
  • Shared Services organization performs closing acitivities
  • Employee expense reports completed and submitted via an online application

Sample HR/PR Best Practices

  • One integrated data repository utilized for all employees record information (demographic, dependent, beneficiary, payroll)
  • Self-service tool provides automatic prompt to employees as they make career data changes that may impact other data
  • HR system that supports organizational/reporting structure and allows ease of reporting
  • Automatic update and revocation of all rights performed when employee is terminated
  • Simplify benefit plans. Extend coverage from the first day of employment to eliminate prorating, working spouse contributions, and granfathering
  • Number of pension plans reduced to minimize complexity and cost
  • Managers submit requests to fill existing positions via Manager Self-Service; data electronically integrated into central HR system of record
  • Automatic routing utilized for approval of requisitions for new positions; maximum 3 approvals recommended
  • Candidate uses Self-Service portal entering personal data, work history education, and their resume

Sample Supply Chain Best Practices

  • Procurement card utilized for small-dollar purchases
  • Perform supplier self-service for standard inquiries via web-based inquiry tools
  • Automate workflow of electronic or imaged invoices
  • Payables processing is largely centralized or in shared services, with less than 20% of the total process costs from local (non-central) support
  • Fully integrate procurement with finance and supply chain systems (e.g., inventory, receiving, accounts payable, general ledger, projects, etc.)
  • Centrally maintain a single instance of the enterprise-wide supplier master file
  • Include only third parties in the supplier master file. Reimburse employees through the payrool system
  • Integrate receiving systems tighly with purchasing, inventory, and payables systems
  • Make reports available via a Shared Service Center portal and distribute electronically as required
  • Provide a borad base of employees with access to eProcurement to minimize manual requisitioning
  • Purchase Order releases are generated automatically based on inventory triggers
  • Use EDI and/or electronic transmissions to communicate purchase orders and recieve P.O. acknowledgements
  • Centralized drill-down tool for accumulating supplemental external reporting data (e.g. data analysis, analysis of other liabilities, etc.)
  • Real-time key performance indicators – exception-based and linked to contract database

Sample Metric to get your Hard Return on Investment
Finance Metrics

  • Cash deposits streamline of information flow
    • Current: 14-day manual process
    • Target: 50% Reduction in Time
  • EDI Invoice Transaction operational for 5 of 10 Top Vendors
    • Current: 1 Vendor
    • Target: 5 Vendors
  • EDI & Non-EDI three way matching
    • Current: 98% & 0% match performance
    • Target: 98% & 90% match performance
  • Capital budget tracking in Lawson
    • Current: N/A – wholly manual process (Excel)
    • Target: 95% of all capital budget information captured at the PR/RQ level
  • Automated capitalization of fixed assets
    • Current: N/A – wholly manual process (Excel or Access DB)
    • Target: 5% manual intervention required in process
  • GL drill-down capability for dept managers
    • Current: 15 hours of inquires to Finance per month
    • Target: 5 hours of inquires to Finance per month

Payroll Metrics

  • Increased speed of bi-weekly payroll processing
    • Current: 72 hours of processing
    • Target: 8 hours of processing
  • Decrease number of manual edits
    • Current: 150-200 manual entries
    • Target: 50-75 manual entries
  • Speed of access to Payroll data
    • Current: IS provides all reporting support
    • Target: Payroll self-sufficient

Materials Metrics

  • Full EDI Transaction Sets Operational for 5 of 10 Top Vendors
    • Current: 1 Vendor
    • Target: 5 Vendors
  • Reduce the Amount of Manual (Paper) Requisitions
    • Current: NA
    • Target: 75% Reduction
  • Reduction in Discrepant Invoices that Require Manual Purchasing Intervention
    • Current: NA
    • Target: 75% Reduction
  • Reduce the Amount of Product Returns to Vendors
    • Current: NA
    • Target: 75% Reduction

Human Resources Metrics

  • Increase Speed of New Hire Data Entry Process  (post offer)
  • Shorten Time to Activate Employee Status
  • Reduce Entry Errors for New Hire, Transfers, & Performance Evaluations
  • Enhance Integrity of Benefit Plan Data
  • Accelerate Termination Notifications
  • Improve Accessibility of Overall HR Data
  • Additional Metrics can allow include KPIs for :
    • eRecruiting
    • Occupational Health
    • Workers Compensation
    • Open Enrollment – Benefits
    • Salary Planning