Integrated Business Planning & Analytics at ... - AFPOnline

Integrated Business Planning & Analytics at HPHC –

Leveraging the Power of the Cloud

Philip Peck

Vice President – Finance Transformation Practice

Peloton Group

[email protected]

Kate Stansky

Director Budget and Cost Management

Harvard Pilgrim Health Care

[email protected]

Agenda

• Introductions

• Current State Environment

• Software Vendor Selection Process

• Implementation Overview

• Post Implementation – Next Steps on the Journey

• Lessons Learned

CredentialsKate Stansky – Harvard Pilgrim Health Care (HPHC)

• Leader with over 25+ years as a strategic business partner to Executive Management

• Responsible for executing the budgeting process, financial forecasts, & management reporting

• Actively involved in the development of long-term financial plans & capital resource allocation

Philip Peck – Peloton

• 30+ years of industry and consulting experience in Planning, Performance Management, and

Analytics

• Responsible for developing multi-phase digitally enabled transformation roadmaps and guiding

organizations through the journey

• Recognized FP&A thought leader, external speaker, and member of the AFP FP&A Advisory

Council

Peloton – Executive Summary

Industry

Consulting Industry

Retail | Life Sciences | Manufacturing |

Financial Services | Insurance |

Aerospace & Defense

Full Life Cycle

Advisory | Consulting | Managed Services

BreakawayTM

Innovative and Collaborative Implementation

Approach that Drives Adoption

Certified

175+ Certified Resources

Finance, Accounting, & Cloud Integration

Experts

750+ Projects

Cloud Accelerators | Cloud Development Hub

Referenceable Clients

125+ Cloud Implementations

EPM – Planning, Reporting, Close

ERP | Big Data and Analytics

Cloud Integration | Program Mgmt

Digital Finance

World-Class Finance Transformation Services

Technology and Business Process Expertise

White Papers & Leading Practices

HPHC Overview

• A leading not-for-profit health services

company, Harvard Pilgrim was founded 50

years ago by doctors

• Harvard Pilgrim and its family of companies

provide health benefit plans, programs and

services to more than 3 million customers in

New England and beyond

• Nationally recognized for outstanding

performance in clinical quality and member

satisfaction

Mission

Improve the quality and value of

health care for the people and

communities they serve

Current State Environment

Background, Issues, & Challenges• HPHC implemented systems and processes to support planning, cost

allocations, and reporting using Clarity software in 2007

• The legacy solution was in need of a major upgrade where limited investments

had occurred for 10+ years.

• The solution was increasingly out of synch with the evolving business structure

requiring manual workarounds and several “single point of failure” risks.

• The existing solution was people dependent with a heavy reliance on

institutional knowledge and a small group of SME’s (Jedi Knights)

• Overall process inefficiencies including long planning, reporting, and allocation

cycle times with unnecessary work activities and duplicative effort

Catalyst for

Change

Start

Sustained

Success &

Continuous

Improvement

Exploration &

Business

Needs

HPHC Finance Transformation Journey

Vendor

Evaluation &

Selection Solution

Implementati

on

Enhancements

& Expanded

Capabilities

Evolving Business Needs & Change Mandate

• Competitive landscape required more visibility into drivers of business results

• Business strategy necessitated involving more people in planning across the

organization (e.g. distributed planning with ownership & accountability aligned

to the business owners)

• Imperative for more transparency and flexibility in cost allocations

• Mandate to improve efficiency by reducing offline processes, automating data

integrations, minimizing reconciliations and freeing up Finance associates

time to focus on business partnering activities

• Demanded a high performing platform that supported the analytic needs of

the business

Software Vendor Selection Process

Vendor Selection ProcessCodify Critical

Business NeedsProof of Concept

Strategic Direction

& Decision Criteria

Industry Research

& Networking

• Leverage independent,

unbiased resources like

the Gartner Magic

Quadrant, the Forrester

Wave, and BPM Pulse

Survey Results

• Network with similar

organizations in your

industry regarding their

EPM solutions and

experiences

• Establish enterprise

strategic direction

regarding platforms and

tools

• Create clear decision

making criteria

• HPHC

• Cloud solution

• Out-of-box capabilities /

minimal customization

• Low overall cost of

ownership

• Canvas organization to

understand business

needs (today, tomorrow,

future

• Ensure that all users

have a voice in the

process

• Incorporate the future

state vision for Finance

as part of the needs

assessment

• Conduct proof-of-

concept to demonstrate

capabilities of the

chosen vendor with real

data and information

• Pressure test the vendor

solution with relevant,

impactful business uses

cases

• Understand potential

trade-offs

Implementation Overview

Solution Goals and Objectives

Enhanced Analytics

Process Efficiency &

Effectiveness

Leverage Enabling

Technology

• Provide visibility into the key drivers of business performance

• Improve decision-making (“insights at the speed of thought”)

• Deliver management standard reports & common analytic views

• Eliminate of manual data integration and process workarounds

• Significantly reduce cycle time (e.g. allocations process)

• Enhance “what-if” modeling and scenario analysis capability

• Decommission legacy Clarity solution. Move to the cloud.

• Eliminate offline models, shadow systems, and spreadsheets

• Enable integrated business planning

Integrated Business Planning at HPHCPremium & Product

Modeling

Medical &

Operations CostsCost Allocations

Capital &

Project Planning

Management &

Regulatory Reporting

Non-driver based modeling and

planning, annualized models

Driver Based, Support Key

Metrics for Iterative Pricing &

Product Analysis

Ability to classify costs, model

variations, and analyze trends

Transitioning to …

Product viability, changing

markets & distribution channels

Volatility around medical cost

increases, commission programs,

and cost optimization

Cost detail tied to product

dimensionality, operating model

cost modeling


Medical Loss Ratio (MLR)

scrutiny, accurate allocations

and transparent audit trails

Allocations over-engineered,

limited visibility into drivers


Accurate & transparent

profitability by segment, plan &

distribution channel

Regulatory emphasis & speed

of information expectations

Disparate data, lack of data

management, speed of delivery


Timely, accurate, actionable

operational & financial

performance information

Efficient and effective use of

capital, risk-return composition

Optimally aligning large

initiatives to broader strategy


Integrated impacts to all

Financial Statements, real time

impacts to initiatives

Bu

sin

ess

Nee

ds

Ch

alle

ng

eF

utu

re S

tate

Enterprise Planning - EPBCS

Financials Financials / Workforce Capital / Project

EPBCS

FinancialsPCMCS

Solution Architecture Blueprint

Oracle EPM Cloud

Financials

Workforce

Capital

Projects

EPM

AutomateEPBCS

Cloud Inbox

FDMEE

Data

Management

Smart View

Browser

Financial Reporting

EPBCS Dashboards

Expense Management

Planning & Reporting - EPBCS

Allocations - PCMCS

Oracle EBS

Driver

Templates

Other Sources

Strategic

Financials

Workforce

Capital

Projects

Strategic

HPHC InstituteHPHC Corporate

Reporting

Allocations Modeling

Next Steps on the Transformation Journey

The Journey Continues

HPHC to leverages the integrated business planning solution to significantly improve reporting and analytic

capabilities and provide key insights and “top of mind” KPI’s through standard reports & dashboards

Commercial – Member Months by Funding / SegmentCommercial – Financials & Admin PMPM

Next on the Horizon

Training,

Education,

Adoption

Expanding the

EPM Solution

Platform

• Implement training programs to improve finance literacy,

self-sufficiency, and user adoption

• Conduct regular communication forums highlighting

ongoing improvements and key finance activities

• Multi-year forecasting models w/ “what-if” analysis

• IT specific application for capital planning & investments

• Flexible staffing models (e.g. membership change impacts)

Value Proposition & Business Impact

• Increased frequency of reports, insights, & faster decision-making

Risk Mitigation

Information

Delivery

Business

Partnering

Analytics

Solution TCO

• Greater demand for expertise & involvement with the leadership team

• Enhanced business understanding via reports, analytic views, & dashboards

• Substantial reduction in maintenance, administration, and overall cost

• Elimination of people dependent processes

Lessons Learned

Lessons Learned• Change management and solution adoption is hard. Challenges getting

business users off the legacy system especially with specific report sets.

• Need to elevate Budget owners knowledge of finance. Greater ownership and accountability is empowering but requires finance aptitude.

• Initial rollout of standard reports, common analytics views / drill paths, and dashboards received well but struggled to maintain momentum

• Be careful what you ask for. Delivering better information and insights at a greater frequency generates MORE demand from the senior leadership team.

• Finance and business transformation occurs in waves. Proactively provide communication, updates, and positive messaging (e.g. “wins).

Back in the Office

1. Understand your key business requirements, execute against an intentional

roadmap, and acknowledge the “journey”

2. Do not underestimate the potentially uphill battle in getting users to adopt

the new solution (business processes, planning applications, reports)

3. Proactively find ways to keep the initial positive momentum moving forward

and growing over time

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