As one of the largest home care providers in the U.S., Kindred at Home had built up a complex budget planning and reporting process thanks to numerous acquisitions and hundreds of locations spread throughout the country. The healthcare provider faced a dire diagnosis: its budget managers were the same nurses responsible for providing care. “Most of our locations are led by nurses. Their favorite subject in school was not finance, so they’re already not real crazy about the budgeting process,” says Aimee McCorkle, vice president, business operations. In addition, constant changes to Medicare reimbursements and regular organizational hierarchy restructuring due to acquisitions, consolidations, and new locations were difficult to manage in Microsoft Excel or the previous on-premise planning software.
The prescription? Workday Adaptive Planning. With Workday Adaptive Planning, the Kindred at Home finance team was able to simplify the process for the nurse budget managers, which in turn improved company visibility into the budget and increased its flexibility, not to mention freeing up nurse time to deliver better care. “Workday Adaptive Planning has allowed us to decrease our budget planning process time from approximately five months down to three months,” says McCorkle. “With that shortened time, the finance team has more time to spend with operations and sales to help drive our business initiatives. We can actually do more return on investment planning or modeling on start-ups. We even get involved with acquisitions, when before we were spending half the year on the budget planning process.”
With Workday Adaptive Planning OfficeConnect, data updates are automatic. That means board book presentations can be prepared in a matter of hours, as opposed to the week it took previously.
Vice President, Business Operations
Challenge.
Like many organizations that are built through acquisitions, Kindred at Home had several tools being used for budget planning and reporting. It had 400 locations across the country, and the process of budgeting was a long and arduous one. End users were frustrated with the length of time it took to complete their budgets, rollups had a variety of rules that had to be incorporated and that added to the complexity, and there was a high level of dissatisfaction overall with the entire process.
- Experienced version control issues and difficulty getting nurse end users to complete budgets in a timely manner using the previous Excel and Oracle Hyperion-based on-premise software.
- Couldn’t incorporate changes made at a branch level until the following day because an administrator was required to run a business rule to calculate consolidated snapshots.
- Struggled to adapt the model to incorporate regular changes in regulations, Medicare reimbursement rules, and business structure.
- Suffered through a lengthy budget planning process, which kept finance from being able to collaborate with operations and sales on business planning.
Strategy.
Kindred at Home began its due diligence in 2012, and evaluated a number of solutions, including Workday Adaptive Planning and Oracle. One of its acquisitions had been using Workday Adaptive Planning, and the success of that implementation helped drive the decision. The company ultimately selected Workday Adaptive Planning for a number of reasons including:
- Kindred at Home found that Workday Adaptive Planning had been proven in one division already, and had provided the usability and flexibility it was looking for.
- The cloud delivery model would enable Kindred at Home to reduce significant capital investment and long implementation time, and would also give the company the flexibility to grow by adding new offices and users with no additional IT investment.
- The ease of use of Workday Adaptive Planning reduced training requirements, improved engagement, and made deployment much simpler.
- Pricing could be bundled into the operational budget.
Kindred at Home began its implementation of Workday Adaptive Planning in 2012, and began its phased-in deployment with its Home Health division. The deployment took only three months, and was very successful. Over the next year, the other divisions came onboard in quick succession. This upcoming budget year will be the first with the entire company using Workday Adaptive Planning for its budgeting process, and it is already proving successful. Everyone in the organization is now using Workday Adaptive Planning for budget planning—providing a holistic view of the entire organization that was never available before. Users are reporting significant time savings, and the process has reduced workloads by more than two months for the finance team.
Key benefit areas.
Deploying Workday Adaptive Planning has enabled Kindred at Home to improve visibility, increase engagement of its budget managers, and reduce the complexity of its budget process.
- Increased budget manager productivity. With the previous implementations, the budget managers found the process frustrating and time-consuming. There were several rollup rules that complicated things and the interface was difficult. As the frustration levels increased, they looked to the regional financial team to take on much of the ownership of the budget process. Now with Workday Adaptive Planning, the engagement level of the branch managers has greatly increased and they’ve taken ownership of the process, significantly reducing the time allocation of the regional team. As a result, there has been an increase in the branch managers’ productivity and visibility into the process.
- Increased finance director and finance AVP productivity. Before Workday Adaptive Planning, much of the consolidation and validation of the budgets across the company became the responsibility of the finance director and the regional AVP. With the implementation of Workday Adaptive Planning, the level of effort has been reduced from five months to three.
- Increased visibility. Prior to Workday Adaptive Planning, there were several tools being used for budget and planning purposes at Kindred at Home. Now, the entire company has a complete understanding and view of the entire process, as well as a consistent view across the organization.
- Reduced and eliminated software and consulting costs. With the elimination of its previous solutions, Kindred at Home was able to reduce the cost of software, as well as the need for consulting to support those systems. It was able to reallocate staff that supported the systems to other business initiatives with Kindred at Home.
Best practices.
As one of Kindred at Home’s divisions already had Workday Adaptive Planning implemented, the finance team was able to leverage those previous experiences. As Workday Adaptive Planning was to be the corporate standard for all of Kindred at Home, the finance team developed a full project plan, and ensured the CFO had all the information and was behind the initiative. The team also developed a layout of the model and the calculations they wanted to see, to make sure the implementation team was up to speed at the beginning.
Another best practice recommended by the team is to ensure the definition of an organizational structure in the beginning. This is critical to the success of a planning and budget model, and while it is easy to do at the start, does present challenges when trying to implement those levels of changes while the budget process is in motion. As well, it is important to define naming conventions and metrics early on, so there is consensus and consistency throughout.
Calculating the ROI.
Nucleus quantified the initial and ongoing costs of software license subscription fees, personnel time to implement and support the application, employee training time, and consulting over a 3-year period to calculate Kindred at Home’s total investment in Workday Adaptive Planning.
Direct benefits quantified included the elimination of Oracle Hyperion license fees, consulting costs, and reallocation of staff to other projects. Indirect benefits quantified included the increased productivity in the finance team, IT, and of the budget managers driven by the elimination of the previous solution, and the deployment of Workday Adaptive Planning, and were calculated based on the average annual fully loaded cost of the employees.
Not quantified were the additional efficiencies and savings Kindred at Home will gain from Workday Adaptive Planning as it expands its use of the application.