Leveraging Business Intelligence to Improve Performance

1. Leveraging Business Intelligence to Improve Performance

2. Maine

4. South Freeport Harbor

5. Execution of Strategy Has Become the Corporate Challenge of Our Times! • “The problem is that our age’s fascination with strategy and vision feeds the mistaken belief that developing the right strategy will enable a company to rocket past competitors. In reality, strategy is less than half the battle. .. In the majority of cases – we estimate 70% – the real problem isn’t [bad strategy]…. It’s bad execution.” Why CEO’s Fail Ram Charan and Geoffrey Colvin Fortune (6/21/99)

6. Overview • Who we are • The beginning: creating a strategy focused organization • The problems…and how we approached them • Some solutions • Results

7. Who we are • HQ in Lewiston, ME • An integrated healthcare delivery system serving 400,000 residents of central and western maine • 3 Hospitals: • Central Maine Medical Center (CMMC), Lewiston (240 beds) • Bridgton Hospital (20 bed Critical Access Hospital) • Rumford Hospital (20 bed Critical Access Hospital) • Wayne Bennett • VP of Finance

8. Central Maine Medical Center

9. Central and Western Maine 400,000 population Service Area

10. A Vision For the Future of CMHC Finance Services

11. Strategy Focused • Formal Strategic Planning process • Finance division evolving from a scorekeeper, to a strategic business partner • Linking planning to budgeting/forecasting • Align business strategies with key performance indicators drawn from across the organization, and make the information readily available

12. 5 Principles of the SFO 1. Translate the Strategy to Operational Terms 5. Mobilize Change through Leadership 2. Align the Organization to the Strategy Strategy FocusedOrganization 4. Make Strategy a Continual Process 3. Make Strategy Everyone’s Job

13. Organizations Often Have A Gap Between Strategy and Action Strategy Is a Step In a Continuum MISSION Why we exist VALUES What’s important to us VISION What we want to be STRATEGY Our game plan STRATEGIC OUTCOMES SatisfiedSHAREHOLDERS Delighted CUSTOMERS Efficient and EffectivePROCESSES Motivated & PreparedWORKFORCE ©2002 Balanced Scorecard Collaborative, Inc.

14. MISSION Why we exist VALUES What’s important to us VISION What we want to be STRATEGY Our game plan BALANCED SCORECARD Implementation & Focus STRATEGIC INITIATIVES What we need to do PERSONAL OBJECTIVES What I need to do STRATEGIC OUTCOMES SatisfiedSHAREHOLDERS Delighted CUSTOMERS Efficient and EffectivePROCESSES Motivated & PreparedWORKFORCE The Balanced Scorecard Is A Bridge To Close That Gap Strategy Is a Step In a Continuum ©2002 Balanced Scorecard Collaborative, Inc.

15. Quality x Safety x Patient Satisfaction x Access Value = Cost x Utilization The Value Equation

16. A strategy map shows how the strategies relate to one another

17. A Balanced Scorecard Shows Strategy in Operational Terms

18. Pain points • Lack of trust in the data/reports • Lack of understanding about the sources of the data • No single version of the truth • Managers were • frustrated they couldn’t easily access information • weak in “financial acumen”

19. Pain points • Reporting was labor intensive and complex • A centralized Decision Support department struggled to meet its customer’s needs • Not able to cascade information throughout the organization • Data focused on department performance, not linked to overall corporate performance or KPIs

20. Introducing Organization Development • OD is a profession and a practice. • Organization Development is a systems approach to change in organizations which emphasizes building and sustaining the capacity of the organization. • Considers “the people part” of any problem: • The skills and tools needed to succeed • Expectations and role clarification • How our systems are organized to support our objectives • Emphasizes process consultation: “a philosophy of helping…and a methodology of how to be helpful” (E. Schein, 1999).

21. OD Application in Healthcare • Health care is widely recognized to be a knowledge based economy. • CMHC recognizes and is investing in the reality that our competitive advantage comes from knowledge, capabilities and relationships… • all of which are created by the employees in our organization

22. Some solutions • A structure for the future of the Finance Division • Deployment of Decision Support analysts • One on one assistance • Develop Business Unit Analysts • Allocation of DS resources aligned with strategy • Link budgets to strategies • Develop Business Intelligence Platform • Business Performance Management • Clarify financial skills expected of managers • Provide a system of incentives

23. Six Stages to Business Intelligence Maturity Analytic Services Enterprise Data Warehouse Chasm Data Warehouses Data Marts Gulf Spreadmarts Production Reporting From: Performance Dashboards, Wayne Eckerson

24. BI vs BPM Business Intelligence Data collection Information distribution Analytical reporting Business Performance Management Business driven On-demand information delivery Focused on business strategy execution and corporate KPIs Closed Loop 24

25. The CMHC Data Mart 80% of the Reports Business Intelligence Platform 20% of the Data PowerHealth Solutions Automated Daily Statistics Cost Accounting Market Share Executive Reporting Net Revenue Calculation Detailed Reporting SQL SERVER Statistics PowerPerformance Management OutlookSoft Budget/Forecast Consolidated Financials Productivity Reports SQL SERVER Maine State Market Share Data TEXT General Accounting SQL SERVER Electronic Health Record Data ORACLE Billing + Payroll IBM AS400

26. Executives Administration (HR, Finance, Marketing) Hospital Business Unit Department Medical Staff Patients Defining Key Performance Indicators (KPI) Different Roles... Different Needs Strategy Budgeting/Planning Patient Throughput Control Manage Execute data spectrum

27. Three Views of the Data Dashboards monitor key performance metrics Interactive charts and tables (OLAP) explore information from multiple dimensions Operational reports examine details before taking action

28. Summarized Graphical View

29. Summarized Graphical View

30. Multidimensional View

31. Detailed Report View

32. Detailed Report View

33. Detailed Report View

34. Next Step

35. Improve Performance by Reducing Utilization • 83% of FY07 cases had LOS <7 days Trigger at 7th Day Trigger at $30,000 • 80% of FY07 cases had charges < $30,000

37. Improve Satisfaction by Improving Patient Throughput

38. Return on Investment • Earliest benefits from detailed operational data • Daily display of core operational processes • Emphasize monitoring more than analysis or management • >$10,000 per month of additional revenue captured in the Operating Room • Identified and corrected a systematic error overcharging open heart surgery patients

39. Take Away • Integrating complex data from multiple systems in a way that scales to support multiple users requires a Business Intelligence platform • Pervasive dashboards and analytics represent next generation Business Intelligence • Merges the functionality of BI technology and performance management • Easier for end users to access than traditional reporting • Allows users to drill into detailed data to identify the root causes of problems and promptly intervene • Enables executives to more effectively communicate, monitor, and adjust business strategy and plans

40. Executing Strategy well business intelligence + good processes and structures + knowledgeable people = improved performance

41. Wayne Bennett • VP of Finance • bennettw@cmhc.org • 207-795-2268

42. Sources • Robert S. Kaplan and David P. Norton, The Balanced Scorecard, (Harvard Business School Press, 1996) • Robert S. Kaplan and David P. Norton, The Strategy Focused Organization, (Harvard Business School Press, 2001) • Wayne W. Eckerson, Performance Dashboards, (John Wiley & Sons, 2006) • Edgar H. Schein, Process Consultation Revisited, (Addison-Wesley, 1999)