designing your new multi-dimensional profit and costing solution john fitzmaurice joep van gorp cpm...
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Designing Your New Multi-DimensionalProfit and Costing SolutionJohn Fitzmaurice Joep van GorpCPM Product Strategy Medisch Centrum Haaglanden (MCH)
• How new customers and customers of the legacy applications (Oracle Performance Analyzer and Oracle Activity-Based Management) are working through the critical solution design process
• how they are mapping their business requirements to the new multi-dimensional model, and
• learn about the benefits they expect to realize from their new Oracle Profitability Manager solution
S281902Designing Your New Multi-Dimensional Profit and Costing Solution
• … tying this to the theme of Oracle OpenWorld 2006 …
• Better Information
• Better Results
S281902Designing Your New Multi-Dimensional Profit and Costing Solution
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Program Agenda
• Overview the Profitability Manager prototypes• Introduce Joep Van Gorp, MCH, Netherlands• MCH present their Profitability Manager project• Q&A – your chance to discuss the MCH project
The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions.The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.
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Customer Case Studies/Prototypes
Customer Case Study / Prototypes
• Profitability Manager prototypes• Strong in Financial Services• Branching out beyond the FS base, into other
industries• Healthcare
• Healthcare providers, Hospital networks• Communications
• Mobile/cellular telco’s
• In Financial Services, around the world
• Large Retail Bank in Europe• Fast growing bank, modeling the profitability of over 25m
customer accounts from many countries
• Large Investment Manager in U.S.• Building a prototype management-level profitability
analysis solution• Including complex shared-services costing models
• Determining activity rates and• Billing products and services consumed
by Business Unit
Customer Case Study / Prototypes
• Customers, beyond our traditional FS
• Health Care Provider in the U.S.• Provide this full service health benefits company with
detailed costing analysis of health plans• Allow multi-dimensional modeling of products and services
costs
Customer Case Study / Prototypes
• Large Cellular Phone Network in U.S.• Aggressive growth in subscribers and services has driven
the need for a new solution• PFT will provide best practice profitability engine for
revenue/costing modeling• Multi dimensional costing analysis for the management
ledger, and• Calculate customer profitability for over 40m subscriber
accounts
Customer Case Study / Prototypes
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Joep Van Gorp, MCH
Profitability Manager at MCH ….and a quick look at Planning & Budgeting…
Introduction
• Some statistics• A top-class regional focused teaching hospital in
the west of the Netherlands • A annual budget of 300 mn USD • 153.000 new outpatient contacts a year• 21.000 hospital submissions a year• 19.000 one day treatments
The Medical Center the Hague
• Highlights• Innovative and customer focused in all direct and
supporting stages of patient care • For example: a centre of excellence in the
neurosurgery, but also in the area of Health Control Systems
• Best Practices: European healthcare solutions (Oracle), most innovative economics department, leader in treasury/cost-pricing/procurement
The Medical Center the Hague
• Project Manager Profitability Manager and Enterprise Planning & Budgeting
• Working for the Medical Centre the Hague• Master degrees in Industrial Engineering and
Business Economics• Overall nice-guy• [email protected]
Speakers background
Market developments and
Business challenges
• Product and budget related• Less government intervention • Product pricing• Output financing• Product & price negotiations between hospital en
insurance companies
Market developments (1)
• Market related• Competition between hospitals: work together if
you must, compete where you can• Introduction of new commercial party’s• More stakeholders and more stakeholder
influence• Insurance companies• Banks as a result of a higher risk profile• Patient groups• Shareholders participating in hospitals
Market developments (2)
• Building competitive power• Collaboration (alliances,...)• Commercial focus (brand name,...)• Excellent provable medical quality• Service oriented organization (quick response,...)• Efficient internal organization
• Logistic principles, procurement (best-practice Oracle)• Cost control systems (PFT/EPB,...)
Business challenges (1)
• Good governance• Balancing quality, service and costs• Innovative control systems to facilitate
decision making in the cost and service arena:• Cost-price calculation and cost analysis• Output related budgeting (Activity Based Budgeting)• Product pricing and negotiation policy• Benchmarking• Efficient and effective patient care
Business challenges (2)
• European healthcare is becoming a real business
Overall …
Opportunities
• Strengthen the leading competitive position in the regional Dutch hospital market
• In the fields of quality, service en costs• Increase market share• Develop innovative control systems to catch
these opportunities• Specific in the field of cost control
• Strategic development partnership between MCH and Oracle
• Innovations focused on:• Product cost-price calculation and analysis
• With Profitability Manager
• Internal cost benchmarking• With Profitability Manager
• Output related budgeting and analysis• With Enterprise Planning and Budgeting
New innovative control systems in the healthcare market
Cost-prices:The MCH Cost Model
A quick look at the cost model
PFT
Value!
Functionality of the MCH cost model in Profitability Manager
• 7 dimensions: • Specialism• Product / Product group• Cost center• Activity• Cost type (personnel, equipment, material and overhead)• General Ledger accounts• Time
• Reliable and fast cost-price calculation:• Clinical activities: 4.400 +• Cost centers: 350 +• Products: 20.000 +
Functionality (1)
• Understanding of the cost patterns:• From first patient contact till general ledger account!
• Cost control:• Insight in the product, the cost-price and the product
profitability• Internal benchmarking
• In this way we can make the organisation more efficient en service oriented….
• ….and grab the opportunities!
Functionality (2)
Screenshot Profitability Manager
Health care product “Bill of Material” : insight in the product!
Clinical activities Activity weights Cost-price Weighted costs split into different cost types
Enterprise Planning and Budgetingan overview
The MCH budget model: activity based budgeting
PFT
PFT
• 8 dimensions• Market segment• Specialism• Product / product group• Clinical activities• Cost center (Department, Division and Concern level)• Cost type (Personnel, Equipment, Materials and Overhead)• General Ledger account• Time
• Only two manual inputs, the others linked with the application
• Data quality inspector
Functionality of the MCH budget model in Planning & Budgeting (1)
• Integrated budget calculation• Budget proposal• Distributed over general ledger accounts
• Manual inputs• Production forecast• Personnel forecast
• Relationship between production, cost en revenue• Internal controls• Analyses and reporting capabilities
• Budget restrictions• Budget proposal• Production, cost, revenue and profit
Functionality of the MCH budget model in Planning & Budgeting (2)
Corporate Profitability Management:Integrating the cost en budget model
Production & HRM forecast ->doctors & mngt
PFT:Cost prices andcost analyses
EPB:Output budgeting
& analyses
PFT/EPB:Reporting &
Analyses
PFT:Cost prices andcost analyses
PFT:Cost prices andcost analyses
Enterprise Performance Foundation (integration data layer)
Data Warehouse Oracle ebusiness, HRM, other apps
Information Portal
• Management support• Rigid scope• Accurate functional and technical design• Accurate interface definition and test data• Accepting and anticipating
• Data errors often occur• the products are relatively new
• Active participation of IT and staff personnel
Project experience
• Joep van Gorp• Planning & Control• Medical Centre Haaglanden• Lijnbaan 32• 2512 VA The Hague• The Netherlands • [email protected]• +31 (0) 70 330 3193
Contact information
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