BI Insight

Welcome to June 2009 edition of our newsletter – BI Insight! This month’s newsletter highlights Systech’s project success in “Increasing Operational Efficiency using Profit Analysis” for a leading wholesale drug distribution company. This case study explores the applications, technologies and solutions that Systech adopted to develop an innovative and a cost effective solution for the client. It also gives you information needed to successfully implement solutions and benefit from “Profit Analysis and its applications”. The second article for this issue is “Systech Corner” which features a white paper “BI in Healthcare”. And apart from these we have also included BI news articles from reputed sources. We hope you find the newsletter interesting and informative. Please invite your peers to visit us and subscribe to us. Enjoy reading!

Warm Regards,

The Editor

Editor's Note

Background

In this case study you would see how a leading wholesale drug distribution company achieved improved operational efficiency through Systech’s innovative and cost effective solution and analysis.

The client had to consolidate data from multiple transactional systems into a single enterprise data warehouse. The data consolidation would provide a single view across the entire enterprise and permit Integrated Reporting, Analysis and Decision-making, across the organization. This would provide a single Customer view/definition across the enterprise – eliminating the disconnect in processes such as sales, fulfillment and customer service & satisfaction.

The Challenge in the Details

The client had disparate source systems and multiple decision support systems where data could not be merged or consolidated. These data sources/elements did not map to the definitions in the financial systems either. They were able to generate reports at an invoice level and the reports were taking exceedingly long execution times. The challenges for Systech were:

• To build a single repository for information – integrating data from the disparate systems.
• To design a cost effective solution utilizing the existing hardware and software.
• To deliver within the extremely tight timelines defined by the customer(s).
• To enable flexible & detailed data analysis.
• To implement the front-end application such that it could support existing requirements and possible future developments.
• To provide visibility and insights into costs, revenues, capacity and assets, providing insight into past, present and future information.
• To measure historical performance, profits of incoming orders, initiate trend analysis, predict and optimize costs, profit, capacity; for return on invested capital of your future business.
• To ensure the delivery of undeniably accurate, actionable and widely accessible cost (direct and indirect), resource and capacity information enabling the client to operate more efficiently and in turn reduce cost.

The Solution

At the very beginning, it was determined that the sheer size of the workload combined with the complexity of the organizational and data issues would require a project team with strong leadership & high level executive sponsorship from the client. The tight schedule and budget constraints worked against the traditional approach of organizing a big onsite project team with the resources necessary to accomplish those goals.

Systech team decided to split the project into manageable parts – each of which would be tackled by a small team split into an On-site project lead and an Off-site project team. The Onsite-Offshore teams adopted a fast, responsive and iterative approach to fashion a solution for their part of the puzzle. Iterations of model-build-test-fix-retest resulted in a better componentized build for the Data Warehouse.

Systech teams worked in collaboration with the client to engage, understand the business requirements, craft the technical components and deliver a cost effective analysis for key business areas including:

• CUSTOMER
  • Customer & Channel Profitability
  • Segmentation profitability
  • Sales Optimization
  • Strategic Cross-Sell
• OPERATIONS
  • Distribution Optimization
  • Reducing Operating Expenses
  • Reengineering & Process Redesign
  • Supply Chain Measurement and Optimization
  • Resource & Capacity Planning & Utilization
• PRODUCT
  • Product Profitability
  • Line of Business/Segment
  • SKU Rationalization
  • Brand Analysis
• CORPORATE
  • Corporate Performance Management
  • Business Process Measurement & Analysis
  • Optimized Return on Capital
  • Continuous Improvement Monitoring

Result

• The solution delivered by Systech not only addressed the pain areas but also provided additional benefits to the client.
• Datawarehouse delivered to the client resulted in improved process efficiencies, faster query response times, reduced data load windows, a flexible data model to permit a wide range of analysis.
• Systech’s solution empowered decision makers by allowing them to drill down into their data for detailed analysis.
• Additional types of analysis facilitated by the solution include profitability analysis based on segment, insight into wholesale acquisition cost and better insights of the historical data.
• Forecasting was a key functionality in the delivered solution. This function provided the scoring and tracking tools for business operations.
• Systech helped pinpoint client’s unprofitable products, customers and vendors that might require renegotiation, re-pricing or obsolescence
• Systech’s solution identified profitable products and customers and helped identify opportunities for profit improvement

Featured Article distribution, efficiency, profit analysis

Abstract

Healthcare delivery in the United States has been undergoing major changes. Move towards Market driven healthcare, internal and external restructuring of healthcare delivery systems and increasing sophistication of information technology are all key drivers for accelerating the pace of change in recent years.

All players in the Healthcare value chain – Patients, Providers and Payers are impacted by these forces. Today healthcare faces additional challenges, of escalating pharmaceutical costs, labor shortages, questions surrounding quality of care, compliance with regulations (such as HIPPA).

In this paper, we will primarily focus on the issues relevant to Health Provider Organizations and how BI technology and analytics would meet the challenges of regulations, privacy and data volume of healthcare.

Introduction

According to Health Leaders, a health industry publication, more than 150 Provider Organizations across the United States have gone bankrupt or closed in the past ten years due to financial instability. Many more will meet the same fate unless steps are taken immediately to get a better handle on financial performance and improve operational efficiency substantially.

Healthcare Value Chain

To meet the challenges and to ensure the long-term viability, Provider organizations require well-designed, efficient, and integrated clinical, administrative, and financial processes, and the ability to make “informed” decisions. The key to designing effective and efficient processes and to making sound decisions is the availability of high quality, integrated information delivered when and where it is needed, in a manner useful to knowledge workers, decision makers, and healthcare consumers.

Opportunities for cost savings in US Healthcare Industry ($ billion)

Business Intelligence systems can help Provider Organizations face these challenges

To proactively and more effectively manage information, the provider organizations require a more comprehensive framework – system and processes, than the traditional IT systems. We believe the answer is Business Intelligence. The Gartner group defines Business Intelligence as the process of transforming data into information, and through discovery, transforming that information into actionable knowledge. Thus BI is not a specific technology, or a single data warehouse, or a single analytical application. Business Intelligence is the process that is supported by people, information, and technology for improving the effectiveness and efficiency of an organization.

We have outlined a Business Intelligence Framework for Provider Organizations. BI systems will enable provider organization track utilization, monitor costs and revenue, and develop and live within fixed budgets. Reports and analysis from the business intelligence system will help identify cost trends, patterns and abnormalities and pinpoint financial weak spots. Leadership is then empowered with the knowledge and information to directly influence the performance and bottom line of the organization. A recent survey of senior executives from Healthcare Organizations revealed that Business intelligence systems are primarily used in financial analysis, but increasingly assisting in clinical research, performance measurement, physician profiling and other clinical and operational analyses

Business Intelligence Framework

What are Business Intelligence systems used for in your organization?

• Financial Analysis
• Operational Analysis
• Budgeting
• Cost Accounting
• Clinical Research
• Program Development
• Market Research & Analysis
• Disease Management
• Case Management
• Clinical Reengineering
• Physician Profiling
• Supply Chain Management
• Analytical Customer Relationship Management
• Physician Profiling
• Performance Management
• Case Management
• Operational Analysis
• Budgeting
• Market Research
• Clinical Reengineering
• Customer care Analysis
• Protocol development
• Risk Management

We will outline below some key areas where Business Intelligence systems will provide direct impact in improving financial and operational performance.

Negotiating Adequate Capitation Rates

Often health plans give physician organizations a monthly per-member fee (capitation fee) for providing care for their members. Health plans also delegate to these groups the responsibility of spending the money, deciding on care, and making payments to physician members. Some industry experts believe that root of provider organizations failure is inadequate capitation rates set by health plans. But, many provider organizations lack the information needed to pinpoint this issue and negotiate better terms with health plans.

Business Intelligence solutions with complete financial and operational data and analytic capabilities can help these organizations to understand the level of contracting and capitation rates at which they will achieve desirable economies of scale and profitability. This will empower the management to negotiate appropriate contract terms with health plans.

Controlling Operational Costs

With escalating healthcare costs, it’s important for provider organizations to understand their flow of expenses and how to control them. Prescription drug prices have gone through double-digit percent increases; Health professionals are in short supply and substantial increases in salary, benefits and bonuses are needed to lure and retain them. Administration of complex health plan contracts necessitates high overhead and administrative costs.

In this environment, it’s more important than ever for provider organizations to monitor their costs closely. Business Intelligence systems will enable the organization to track cost patterns over time and identify areas for reduction for controlling the budget. This is a vital part of financial management and if handled inappropriately, the organization can quickly become financially over extended.

Curtailing Unnecessary Losses

Provider organizations must protect themselves from unnecessary losses, such as treating patients not covered by their group or health plans and having extensive out-of-network referrals to specialists. This cost could be substantial and usually have to be absorbed by provider organizations. Streamlining authorizations, eliminating duplicate claims and preventing treatment of ineligible patients can help save the provider groups large amount of unnecessary losses.

Here again Business Intelligence system will help identify the extent of these losses and bring management attention to these issues. It will help identify the risk group of patients based on historical data and predictive analysis. It can track physicians who are likely to refer out-of-network specialists extensively and allow management to take needed action.

Sharing the Risk with Health Plans (Payers)

Health Plans also realize that their success depends on the survival of well-run provider organizations. Whenever provider organizations go bankrupt and close, all the players in the value chain – patients, physicians, insurers and regulators are all affected as they scramble to ensure the delivery of care. This is a costly proposition to Health Plans. Hence, Health Plans and Managed Care organizations are always concerned about long-term viability of the Provider Organizations that they deal with. They are willing to share the risk with provider groups that have a proven track record of success with these risk-based contracts. They are more committed to paying actuarially sound rates that reflect the actual costs of care to these provider organizations.

A provider organization, with a sound business intelligence system and analytical capabilities that can track costs and control budgets, has a better chance of gaining confidence and trust from health plans, which in turn, paves the way for sharing the risk with them. As a result, provider organization can negotiate better terms and lower the overall financial risk to the organization.

Providing Incentives for High Performers

For the provider organization to succeed, it must motivate individual provider members to control costs and improve on utilization while achieving quality outcomes and high levels of patient satisfaction. How can an organization achieve this objective? It must develop appropriate incentive programs and provide a financial stake to the physicians in improving care, quality, and outcomes while controlling costs. The compensation plan should be structured to encourage physician behaviors that ultimately achieve the organization’s objectives and allow for members to be liable for the same risks as the organization.

Without a properly defined data repository with historical data and analytical system, organizations will be unable to track physician performances over time to implement such a compensation plan. Business intelligence system will provide the data required and the tools needed to analyze and develop appropriate incentive plans and help track the adherence of these plans by individual members.

Alert System for Early Detection of Financial Risks

The recent sudden failures of many provider organizations have shown that these groups did not have early warning system to detect potential risks and take immediate measures. Through business intelligence system, set of key performance measures and metrics could be tracked over time and reported periodically to the CFO and other senior management. These reports could be sent automatically to the designated management members and alerts can be triggered if performance metrics fall below certain threshold values.

Tracking Clinical Outcomes of Different Treatments

We have primarily focused so far on the key financial and operational efficiency improvements that could be achieved by health provider organizations in rapid time frame with the implementation of a sound business intelligence system. But the value of this system is not limited to the financial performance alone. Business Intelligence systems can also help track clinical outcome of different treatment options through historical patient record analysis and provide physicians with the means to better understand the effectiveness of these treatment options. Although treating any one patient will involve a unique combination of complex decisions, aggregating patient populations and examining variations in physician decision-making will yield valuable insights for practitioners.

Customer Relationship Management

The government and patients are demanding that health providers create and improve internal systems to provide better service, minimize errors and improve clinical outcomes. Patients are pushing back at provider systems for accurate and comprehensive record keeping. A healthcare system overwrought with inconsistencies and errors can prevent even the best organization from developing strong relationship with its patients. A business Intelligence system that integrates patient data across the enterprise and make it available at the point-of-service will help provider organizations to improve customer service, reduce medical errors, improve productivity and enable patient-centric processes- the prerequisite for improving the care delivery process.

Spending on information technology has been historically low in the healthcare industry and especially so with provider organizations. But, as we noted earlier, provider organizations are facing great challenges than ever before now. Status-qua will only speed up reaching financial dire straits sooner. Provider organizations need to act quickly and invest in appropriate information technology that can immediately help them in identifying financial weak spots and implementing cost control measures. Business Intelligence System has proven to be the key enabling technology that will take all the raw data that is collected in these organizations and turn them into actionable information to empower the leadership to directly influence the bottom-line of the organization.

Systech Corner analytics, bi, healthcare

Systech launches New Applications for Category Management for CPG & Retail

Systech has developed a unique approach that combines its in-depth knowledge of customers’ business processes with expertise in BI solutions to create an analytical solution for Category Management for CPG & Retail.

Arun Gollapudi, CEO, Systech Solutions, Inc. explains, “Many CPG and Retail businesses are becoming victims of fluctuating dynamics in industry. Margin pressures are increasing and product lifecycles are shorter in a downturn. Systech has initiated a solution that would positively impact CPG and Retail businesses by collaboratively targeting profitable product and customer segments. We are confident this solution will provide advanced analytics to our clients at a competitive cost .”

The solution deals with the key applications of Category Management such as:

• Assortment Planning
• Inventory Management
• Price Management
• Supply Market Analysis
• Market Comparison
• Vendor Management
• SKU Rationalization
• Planogramming
• Visual Merchandising
• Monitor key metrics, analytics and scorecards

Systech’s application for Category Management would provide customers a solution to strategically manage categories and gain an insight to unlock additional saving.

Talend Launches Talend Integration Suite RTx

Talend, the recognized market leader in open source data integration software, recently announced the availability of Talend Integration Suite RTx, a new real-time data integration platform for enterprise application integration needs.

Based on Talend’s award winning, enterprise-grade data integration platform – Talend Integration Suite – the new solution allows IT organizations to accelerate the velocity of data across IT systems. With up-to-the-minute data, customers receive a higher level of data consistency across applications, providing more accurate decision making capabilities.

RTx provides organizations with benefits in many areas. For example, with RTx, companies can save time and money by developing and maintaining data integration processes in a fraction of the time and cost it takes with proprietary technologies. For online merchants, RTx provides the information necessary to make promotional offers on-the-fly, based on user behavior, resulting in more targeted offers with better response rates. RTx also improves customer service by synchronizing and maintaining data from multiple sources so that all stakeholders within an organization can access accurate information.

“The fast pace of business today means companies can’t rely on day-old or even hours-old data, and the speed at which IT delivers this data can be the difference between good and bad service, between a happy customer and a lost customer,” said Mark Madsen, president and founder of Third Nature, a technology research firm. “Integration today is mostly performed by hand-coded data movement processes developed by application programmers. Continued reliance on batch data movement and hand-coded integration is a recipe for failure. Companies that want to excel today need a real-time data integration infrastructure and progressive IT organizations are using data integration tools that combine real-time data movement with transformation and quality rules – without the laborious programming effort.”

MicroStrategy Incorporated Announces a Free Reporting Software Package

MicroStrategy Incorporated, a provider worldwide provider of business intelligence (BI) software, recently announced a free reporting software package for departmental BI applications. MicroStrategy Reporting Suite enables companies to use MicroStrategy’s integrated BI platform to develop and deploy premium, Web–based reporting applications, at no cost.

With this compelling new reporting package, MicroStrategy has eliminated cost and time impediments for departments and workgroups to initiate new reporting applications. Business users can simply visit the MicroStrategy Reporting Suite Web site, download the free software, and begin building their reporting applications, all in the same day.

MicroStrategy’s easy–to–use reporting software enables business users to quickly create the reports they need to gain critical insights into business data and make timely, analytically-based decisions. Users can view data in detailed tabular grid reports, graph data to analyze information quickly, drill-down to investigate root causes, make ad hoc queries, manage business performance with arithmetic and statistical metrics, and export data to Excel and PDF. When reporting requirements expand, companies can purchase licenses for more advanced report presentation,

Cindi Howson, Founder, BIScorecard: “Given the product capabilities, migration path, and support, it seems like a deal too good to be true… The appealing aspect [of the MicroStrategy Reporting Suite free offering] is that it provides customers with an easy entree into BI, without that entree being a total throw away. If customers later want to add dashboards or multi-source, for example, they don’t have to start over or migrate to a new product as is often the case with many departmental BI tools.”

SAS Institute highlights benefits BI could bring to education

Johannesburg, South Africa (24 Mar. 2009) – Education can benefit dramatically from advanced analytics and business intelligence (BI) tools, which will provide them with better student data management as well as predictive modelling for understanding future educational demands.

This is the view of Kevin Kemp, head of sales for the commercial division at SAS Institute South Africa, who highlighted the benefits of implementing a BI platform in a tertiary education environment, while speaking at the recent ITS Conference, in Johannesburg.

The conference, hosted by ITS at Emperors’ Palace, brought together users, administrators and financial managers from the education sector and focused on the use of software solutions and technology in the future of education. ITS is a software company with a legacy of more than 20 years’ experience in administration software development for the education sector.

“Implementing a BI solution in an academic environment needs to start with a strong base infrastructure, laying the foundation with data integration and then building intelligent storage and business intelligence on top of that platform,” says Kemp.

“Business intelligence in tertiary education can bring benefits embedded in student data management, HR and fee management, optimising the capacity of universities, trimming costs to make more money available for upgrades, increasing profits, improved marketing approaches and student retention, and could improve student support systems as well as online learning facilities.

“Universities handle incredible amounts of data, and being able to access that data in real-time, analyse reports, discover patterns and provide student support where it is needed, would increase student retention and smooth the running of the university.”

SAS Institute has already made a significant contribution towards education institutions, with a number of local success stories, including Walter Sisulu University, North West University and Unisa.

“Education is experiencing massive transformation, and holds the key to the future, to resolving the skills shortage and driving economic growth in South Africa. Technology and education need to be intertwined to take South African learners and education institutions into the future.

“In 2006, the education minister of Singapore used the slogan: ‘Thinking schools, learning nation’ in his annual address to the country. This is an approach that South Africa could seriously benefit from should it be adopted by our education system. By having technologically advanced places of learning, that run optimally like ‘thinking schools’, students will benefit from improved learning, educators can teach better and a nation can grow,” ends Kemp.

Industry News bi, category management, cpg, MicroStrategy, reporting, retail, sas, talend