Enterprise Resource Planning
Data Governance

How Healthcare Firms Can Unlock the Power of Their ERP System

By Becky Lyons

Every minute of every day, medical providers and healthcare administrators face competing forces of continuously improving patient outcomes while reducing operational costs. Often this herculean balancing act is supported by a technology infrastructure of pieced-together specialized systems that may or may not work well together. Complex networks of siloed systems simultaneously increase costs, decrease efficiency and limit the ability to create reliable analytics.

Many organizations turn to enterprise resource planning (ERP) technology to address siloed systems. ERP technology can revolutionize core business functions by centralizing processes into one software suite or software-as-a-service to enable a smooth flow of data across connected systems. Each ERP component is designed to seamlessly integrate with other components to enable data sharing across administrative and operational functions, resulting in a more efficient approach to enterprise oversight. In addition, with the right processes and standards to govern the data in these systems, organizations will be able to realize significantly more benefits such as streamlined reporting and analytics, increased productivity and improved data reliability.

Large-scale enterprise technologies, such as ERPs, can create tremendous efficiency by consolidating much of an organization’s data in one place. However, those efficiencies are wasted if people do not trust the data housed in those technologies. Trust is built over time through collaborative data governance, which is an organizational capability where the right people are consistently brought together to make transparent decisions that improve data quality and create a consistent understanding of data.

The emphasis on collaboration in data governance is the key to sustainable organizational changes that enable trust in data. Data governance is a key mechanism for strategically developing, implementing and enhancing data-related directives (e.g., policies, processes and standards) to integrate, safeguard, understand and optimize data. The emphasis on collaboration promotes consistent awareness and adoption of guidelines so that understanding and improving data becomes routine rather than additional effort.

In healthcare specifically, FSFP’s clients are realizing significant impacts when they combine collaborative data governance with the features and functions of ERPs, including:

Improve patient experience with reduced complexity – Healthcare organizations manage exponentially increasing amounts of data. Siloed systems create complex, cumbersome administrative processes that take time away from patient care. A recent study by the American Medical Association found that administrative complexity is the most significant contributor to healthcare waste in the U.S. Many of the processes that contribute to administrative complexity can be optimized using ERP technology.

ERPs can reduce the complexity of the technology landscape medical professionals must navigate to complete administrative tasks like scheduling, billing, monitoring supply levels, etc. However, patient data also exists in non-ERP solutions across the organization. Streamlining business data in the ERP can make integration with systems containing patient data easier and faster.

Employing data governance ensures efforts to streamline technology also addresses how data flows across business processes and systems. Data governance puts guardrails in place to ensure data can move securely and efficiently, empowering individuals with data as quickly as needed. Streamlining technology reduces the amount of data cleaning, integration and transformation required for data to be trusted and useable. This approach drives even greater efficiencies for medical professionals, allowing them to spend more time caring for patients.

Some examples where people are empowered to improve the patient experience with data that is governed and streamlined include:

  • Optimizing staffing levels through HR analytics to ensure the right number of staff, with the appropriate skills, are available when needed.
  • Leveraging supply chain performance metrics to keep the supply chain efficient, negotiate prices and reduce supply variation so that healthcare professionals can deliver patient treatment without potentially disastrous bottlenecks or delays.
  • Streamlining claims processing, enabling patients to get faster returns on their claims.

Reduce lost revenue with centralized transaction processing – An ERP centralizes billing and reimbursement data to make it easier to submit claims, manage reimbursements and appropriately bill patients. It can also help provide good-faith estimates for care and reduce the likelihood of “surprise medical bills.” A national study by the Ponemon Institute found that hospitals lost, on average, $17.4 million per year due to patient misidentification when submitting insurance claims.

With the right processes and standards to govern the data in these systems, organizations will be able to realize significantly more benefits such as streamlined reporting and analytics, increased productivity and improved data reliability

Additionally, healthcare organizations with multiple entities (i.e., health systems) routinely perform intercompany transactions. A key area of efficiency with an ERP is centralized transaction processing that automates key processes like inventory management, financial monitoring and payroll across all facilities in a health system.

When combined with collaborative data governance, centralized transaction processing can provide significant value for healthcare organizations, patients and staff. Data governance (along with data literacy) builds data understanding by providing medical professionals with the knowledge and tools to accurately identify patient data across health systems, minimizing needless loss and increasing productivity. In addition to making processes easier for staff, improving patient data awareness and appropriate availability supports a more seamless patient experience as they seek treatment across the health system.

Increase agility with consolidated financial reporting – ERPs enable real-time, consolidated financial monitoring from insurance reimbursements to department expenditures and everything in between. Stakeholders, like administrators, regulators, rating agencies, investors, lenders and media, often seek profitability metrics and operating margins from key sources like financial statements and Medicare cost reports. While ERPs can automate the inventory and financial monitoring process that optimizes operational processes like inventory management, payroll and month-end close, often a key piece of the data exists outside the ERP or must be consolidated across separate ERP components.

Data governance can ensure that the right people are involved in decision-making around data definitions and structures so that the data itself can be easily integrated at the level of quality needed for financial reporting. This reduces the time and effort to produce the reports, increases understanding of those reports and drives improved insights and actions, which enables agility. Easier, faster access to trusted data can help leaders anticipate and respond to complex business dynamics such as bundled payments, rising labor costs and integration across product lines.

ERP implementation or migration efforts have the potential for huge returns. However, those returns will only be realized with collaborative data governance. This organizational capability aligns the appropriate people, processes and standards to ensure high-quality data goes into the ERP and the resulting analytics can be trusted. As a result, data governance empowers people to responsibly use trusted data to improve patient experiences and increase business agility through reduced complexity and streamlined processes. Optimized, trusted data enables leaders to make more informed decisions faster.

First San Francisco Partners collaborates with healthcare organizations nationwide to ensure they realize the full promise of their ERP. Our specialty is establishing sustainable data governance programs that are responsive to organizational priorities. Whether you need help preparing for an ERP implementation or are in an ERP implementation that is not going to plan, we can help.