“The labor-intensive and all too error-prone business processes of the past were either significantly improved or entirely replaced by largely automated systems.”
As one of the largest non-profit integrated health care delivery organizations in the country, the work of our client was relied upon by masses of incredibly vulnerable people – those treated within the 15 large hospitals that the organization serviced. When its 26,000+ employees were added to the mix, it was clear that failure in any form was simply not an option for this sprawling non-profit.
So when a point of failure was identified by our client, it was obvious that it needed to be addressed – and fast.
And at CSG, we were ready to pick up the call.
PROBLEM: The problem that our client faced was one of expenditure. Costs were increasing, and the sizable organization was well aware that its buying power – which ought to have been significant – was far from being realized.
Our client had recently formed an analytics department led by an executive with the vision to create a system to enable the organization to reduce supply expenditures across both its hospitals and outpatient centers.
The buying power problem was proving complex, as the organization’s internal systems and procedures simply weren’t set up with multi-site collaboration in mind. A robust system that encouraged collective purchases was lacking, so the non-profit’s various hospitals and departments were taking an individual approach to purchases.
The situation was exacerbated by a lack of access to information. Contract, purchase and payment data was held in a combination of disparate systems, including a large ERP system and a number of hospital-specific custom systems. Manual entry processes were wildly inefficient and prone to human error.
The disparate information, much of which was compromised on entry, made organization-wide analyses of spend reduction opportunities difficult, to put it mildly.
With a wealth of data warehousing and system design experience, the team at CSG were perfectly placed to assist our client in solving their problem, ensuring that they continued to service health care providers and patients in an ever improving way.
To create the ideal solution for our client, CSG took the following steps:
We worked with the organization’s ERP team to analyze the data sources, and build a clear picture of what the current system looked like.
We consulted with the organization and identified what they required of our solution.
We took that insight, developed the design and architecture, and then built the supply chain warehouse which was tasked with holding critical information such as contracts, requisitions, purchase orders, vouchers and inventory.
Once tested and approved, we rolled out the data warehouse and analysis tools to the organization.
Finally we designed, developed and deployed a web application to manage the creation, modification and tracking of procurement contracts.
The core of the CSG solution was the centralized procurement data warehouse, which provided consistent, standardized views of organization-wide information. It facilitated the quick and easy viewing of information on suppliers, contracts, purchase orders, inventories and invoices, answering critical purchasing questions such as:
How often and for what reason are we buying on contract or using more expensive special orders?
For which products will we most benefit from finding less expensive equivalents?
What is our inventory usage across categories?
Are we ordering the correct amounts? Are we running out of product? Is inventory expiring?
The resulting solution delivered on all of our client’s stated requirements and then some.
Substantial cost reductions were immediately realized, with system-wide spend analyses able to be instantly generated using standardized views of validated information. The labor-intensive and all too error-prone business processes of the past were either significantly improved or entirely replaced by largely automated systems.
The success of the solution was categorical once the hard numbers were crunched. In the first full year post-implementation, savings of no less than $50 million were realized by the non-profit, allowing it to redirect funds to the health care providers and patients who would most benefit. And incredibly the solution looks set to deliver a further $40 million in new savings in its second year.
A position as one of the largest non-profit integrated health care delivery organizations brings with it a great amount of responsibility. But with the help of the team at CSG, it’s fair to say that our client has proven itself to be every bit as shrewd, adept and poised as its patients and employees expect.