Automation of Business Processes, ERP Implementation

The Client

This health care system consists of 19 acute care hospitals, nearly 5,000 affiliated physicians, and approximately 20,000 employees. The health system also operates other health services across a four-state area, including long-term and residential care facilities, hospices, home health agencies, physician practices, ambulatory care centers, professional office buildings, and shared services.

The Challenge

While reviewing the health system’s business processes, several challenges were identified:

• Existing financial and materials management information systems were outdated, unsupported, and at capacity. This prevented future upgrades and integration with other systems.
• Legacy systems consisted of several disparate applications that did not allow the accessing of real-time information. This prevented management from having current or accurate information to make day-to-day and long-term strategic decisions.
• Administrative processes needed to be more efficient to lower costs and remain competitive. There were inefficiencies in the supply chain and finance areas. In addition, there was significant opportunity to standardize the health system’s payable, budgeting, and financial management systems.

The Solution

BearingPoint assembled a team of professionals—experienced in health care operations, business process change, and technology—to review the health system’s business requirements, current processes, and technological infrastructure. They developed a detailed understanding of the health system, and created a business case identifying enterprise resource planning (ERP) as the best solution to reach its goals.

The Benefits

This health system expects to save $7.5 million each year by implementing the ERP system. Specific benefits from the ERP installation include:

• Improved standardization of supplies, which decreased supply usage and lowered the cost per unit; standardization also allows the health system to maximize its buying power with vendors through coordinated purchasing.
• Implemented an electronic data exchange with vendors, which made the health system eligible for discounts on products purchased electronically.
• Market-based purchasing through contracts negotiated at the enterprise level produced substantial savings on items, such as maintenance, transcription, and other services.
• Improved inventory control reduced carrying costs.
• Created cost savings by consolidating accounts payable functions into a centralized, or regional, environment rather than paying invoices at the local level.
• Redesigning general ledger and budget allowed instant access to data and increased financial management capabilities.
• Instant access to integrated financial and materials management data enables the health system to support responsive decision-making. ERP also positions the health system for future eCommerce activities.