align finance and procurement to achieve shared services excellence - nhs sbs

16/03/2009© NHS Shared Business Services 2005 1Delivering value to the NHS

16/03/2009© NHS Shared Business Services 2005 1delivering value to the NHS

© NHS Shared Business Services 2005

NHS Shared Business ServicesAlign Finance and Procurement to

Achieve Shared Services excellence

James Minards - Senior Operations Manager




Size and Scale107 Customer Organisations <25% of NHS

Over 43,000 trained users on the Oracle system

>4 million AP & AR transactions per annum

£28 billion payments processed per annum

£6 billion spend through e-Procurement per annum

75% NHS ALBs, 7/10 SHAs and 29% of PCTs are clients

Recovering £10 billion of NHS Debt per annum

Largest provider of Payroll services to NHS – over 2 million payroll transactions per annum

Successfully merged 67 NHS clients into 23 new organisations & De-merged 6 PCTs into Provider/Commissioner Organisations

Consistently exceeding contractually SLAs (8 KPIs)




Service Portfolio

Procurement Support

FixedAssets

VAT/Tax advice

Accounting to Reporting

Purchase to pay

Oracle 11iplatform

Order to Cash

Interfaces

Specialist advice

Specialist technology

Management information

Support

Development

Training

SLR / PLC

FHS

De/Merger services

Merger services




Drivers

Multiple Sources of the TruthSuppliers

Users & Approvals

Coding / Categories

No Clear Vision of Financial PositionGRNI

Accruals

Budget Status

No Strategic PictureOGC / PaSA Contract adherence




Challenges

Code Mapping – Commodity, VAT, Subjectives

Different Users – Code Combinations

System Integration – Frequency, complexity, compatibility

Power …..

Functionality – More / Less

Change – People, ease of use, enforcement




Performance + Reports = Knowledge = Benefits

Full visibility and Audit trail of all Orders Payments and Approvals

Comprehensive Analysis of spend by Person, Supplier, Department and Cost Centre

Full comparative analysis on Catalogue/Contract and non Contractspend

Full visibility of Process – Notifications, Invoices, receipting i.e. what is with whom and for how long

Visibility of total SBS Client spend and Contract comparisons toprovide benchmark data for development

Procurement Dashboard and other metrics to analyse and assist inachieving Best Practice




Solution

Integrated Finance & ProcurementUsers

Deliver to Location = Cost Centre

Approval Limits, Budget access, approval hierarchy

Subjective CodesCommodity / Categories = Subjectives

VAT Specific Commodity / Categories = Subjectives/ Sub Analysis 1

SuppliersPay & Purchasing – Single record

Enforced PO process – driving down Non PO Spend

ReportsAutomatic drill down across all activities




Implementation

Baseline – Benefit / ROI prediction

Project planning – Standard Prince 2 Methodology

Process project workshops

Data Templates – Vendors/Suppliers, Users, GL – Cost Centres, Subjectives, Deliver to Locations

IT Preparation & Readiness

Training

PIMS




Stages & Concurrent Activity

ImpactAssessment

ProcessWalkthrough

DataCollection

DataValidation

DataLoad

ApplicationClone

Project Management

IT Readiness

Go NoGo

Decision

Communications

HR

Training

Go-Live& Cutover

Post Go LiveSupport

Communications

Project Management

DataVerification

IT Readiness

HR

Process Design

Wave Planning

KickOff

Operations

ProjectInitiationand Set

Up

InitiationStage

Process Design & Data Capture

TransitionStage

StabilisationStage

Impact Assessment




Benefits of SBS Integrated Finance/Purchasing platform

Supplier and Trust Dept level analysis both PO and non PO spend

Spend analysis – Contract compliance

Activity detail – PO commitments, Invoice payment analysis

Reduction in non PO spend

Non PO activity accounts for upward of 60% of procurement activity across the NHS and results in wasted time and resources:

No Financial control over spend until after the event

Invoice processing requires more manual intervention. Typical processing time 14-21 days vs. less than 24 hrs for a automatically matched PO Invoice

PO generated Invoices more likely to result in on time payment to Suppliers and enable the NHS to benefit from payment discounts




Categories & Code Combinations

1,428 Three Alpha Codes Split across 53 key Financial Groupings linked to 420 Subjective codes

AAA – Alcoholic Drinks – Provisions & Kitchens

Subjective 7150 = 60 e-Class Codes




Chart of Accounts Structure

SEGMENT STRUCTURE CODESEntity Code 4 digit alpha/numeric Based on national entity code with

an N suffix

Cost Centre 6 digit alpha/numeric Unique range per Organisation

Subjective 4 digit numeric Shared Subjective code list

Analysis 1 5 digit alpha/numeric Shared range, plus additional range per organisation for local reporting

Analysis 2 5 digit alpha/numeric Shared range of all NHS Organisations and GP codes, plus additional range per organisation for local project reporting

Spare 6 digit numeric Default value zeros – used only for Payroll Statistical postings




The Reporting Hierarchy

Highest Organisation Level = ORGTOT

Lowest Organisation Level = Cost CentreTypical Use: Budget Holder Reporting




The Subjective Hierarchy

Highest Subjective Level = TOTA

Lowest Subjective Level = Subjective Code

TOTA(Total Organisation)

INCE(Inc & Exp)

NCOM(Non Pay Comm

Exp)

PAYX(Pay Expenditure)

EXPE(Gross Expenditure)

NONP(Non Pay Exp)

NCM2(Non Pay PCT

Exp)

INCO(Gross Income)

SINAC - Activity Inc eg I430 DoH IncSIOPC - Other Inc eg I450 RTA IncIOTH - Other Op Inc eg I463 Rental Inc

BALS(Balance Sheet)

A099 - Sys Assets ClearingCAPI - Taxpayer FundsTAST - Total AssetsTLIA - Total Liabilities

PAGY - Non NHS Staff eg P580PBOA - Pay Board eg P502PMED - Med & Dent eg P504PNUR - Nursing eg P522PPAM - PAMS eg P530PPTB - Prof & Tech eg P554PSCI - Scientists & Prof eg P544PSEC - Staff on Sec’mnt eg P599PSPL - Supp Pay P586PSUP - Healthcare Assts eg P566

APMS - Alt Prov Med Ser eg T835GMS2 - Total GMS eg T801PCMS - PCT Med Ser eg T830PMS2 - Total Pers Med Ser eg T825

COMM - Commissioning eg M635GMSD - GMS Discret eg D603GMSN - GMS Non Discret eg G607PMSE - Pers Med & Dent eg S633

CLIN- Clinical Serv&Supp eg N701 DressingsESTB - Establishment Exp eg N722 PrintingGENL - Gen Supp&Serv eg N720 BeddingSMSC - Misc Serv eg N767 Social CareOTRE Other Estab Costs eg N730 TrainingPREM - Prem & Fixed Plant eg N732 Utils

Subjective level- 7320 Electricity

Typical Use: FIMS Returns




Reporting for Budget Holders

Web based reporting which provides users with the ability to access summary Cost Centre level financial information and then drill down to ever more detailed information until source/ transactional level detail is displayed including Invoice image.

Reporting Tool used by Budget Holders and is also used by Finance Teams

Budget Holders have on-line access to:

Divisional Reports (based upon Cost Centre Parent/Child relationship)

Detailed Child Cost Centre Reports (with Drill down to Invoice Image)

Detailed Payroll Reports

Reports display information held in a Reporting Warehouse




5 - Subjective Analysis

Organisation Code and Name

• Report by Subjective showing a standard budget/expenditure report format

• Drill-down the subjective hierarchy from total income and expenditure to Analysis 1 codes

• Subjective in Row

• Funded & Actual WTE, Budget, Actual and Variance for Month and Year in Column




9 - Top/Bottom Variances

Cost Centre Code and Description

















• A ranking report showing the ten most overspent and ten most underspent cost centres. Absolute Values and not percentages

• Used to identify the most significant variances within a directorate




Procurement Reports

Top 10 Revenue Suppliers by Trust in SHA, by value and percent




Lessons Learned

Data Cleansing & Validation – Suppliers & Code Combinations

IT Readiness – IP Addresses, networks and Bandwidths

Communications – engagement

Training – Scheduling & Facilities

Catalogues / content procurement support

Superusers / Help Desks / PIMS

Structured Cut-Over process – Letters, Invoices, Balances

Good Project Management & Governance

align finance and procurement to achieve shared services excellence - nhs sbs

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