Bringing Financial & Supply Chain Clarity to a Multi-Campus Hospital Group

Overview

About the Client

This client operates a healthcare company with three hospitals, which offer a range of outpatient, inpatient and diagnostic services. The management of finance, HR payroll and medical supply procurement and regulatory compliance across three sites was becoming increasingly challenging as the company expanded. Management was making crucial procurement and budgetary decisions using reports that were only days old and preparing for the mandatory audits required months manually extracting and reconciling data. The administrative and clinical teams worked in silos, without access to the same information regarding the consumption of supplies or budget usage.

Challenges Faced

• Clinical procurement and finance were run in separate systems, which made it impossible to compare expenditures against the budgets of departments in real-time.
• Medical supply procurement was managed in a manual manner, and there was no automated reorder system, which led to the stock-out of crucial consumables and wasteful overordering.
• Compliance reporting for regulatory compliance required manual extraction of data from multiple systems, which took more than three weeks of time for each audit cycle.
• HR and payroll were run using a separate tool, with no connection to finance, causing reconciling issues at the month’s end.
• There was no central financial overview of the 3 campuses. Each campus had its own financial accounts, and group reporting was an all-day affair.

Recommendations by Blueflame Labs

Blueflame Labs deployed a team of ERP and healthcare domain experts for an assessment of eight weeks across three campuses, conducting more than 30 stakeholder interviews and mapping over 60 financial, procurement and HR processes. Our recommendation was based on a single ERP platform that is designed for multi-entity organisations, and with robust finance management, supply chain and the capability to provide compliance reports. We specifically suggested integrating the platform with healthcare-related data structures, access based on role controls, as well as the compliance reporting layer to meet the requirements of statutory audits. We recommended against the use of siloed tools in departments and suggested a gradual consolidation of all campuses on one platform.

Our Solution

We created and set up an ERP environment that was multi-entity, having distinct but consolidated ledgers on each campus, allowing all-campus financial reporting in addition to campus-level P&L. Supply chain management was created with par-level reorder logic to manage medical consumables, catalogue management for vendors, as well as three-way purchase matching. The payroll and HR modules were directly integrated with the finance ledger to avoid month-end reconciliation. Compliance dashboards were created to simplify the process of extracting and formatting the required data for submissions to regulatory authorities, which reduced manual work to a minimum. Every data entry point was set up to create unalterable audit trails, in line with the statutory guidelines.

Implementation & Integration

The process was planned over a period of 12 months and was divided into four phases that included master data setup and old data migration, as well as consolidation of finance and multi-entity go-live with supply chain and procurement activation, as well as the integration of HR and payroll. Blueflame Labs managed a dedicated data migration workstream, which cleansed and moved five years of financial records across three accounting systems that were not compatible. Change management was a key aspect. Blueflame Labs facilitated workshops with 120+ clinical and administrative staff from all campuses to promote ERP adoption. A compliance review was conducted by the audit team of the client prior to the go-live date to ensure that all requirements for reporting to the regulatory agencies were fulfilled through the configuration of the system.

Result

• Reduced time to prepare for regulatory audits up to 60%, using compliance dashboards that produce reports in minutes instead of weeks.
• Reduced the amount of medical supplies wasted by 24% over nine months with automated reorder logic as well as streamlined procurement procedures.
• Reduced the month-end closing process from more than three days to one day by utilising automated reconciliation between entities and payroll posting integrated.
• Facilitated the CFO to have an aggregated view of financial data in real-time across the three campuses for the first.
• Completed a digital audit trail, covering 100% of procurement and financial transactions, which ensures total transparency and data integrity for auditors and the leadership.