Purposeful integration: Your key to operational excellence

Assign your best
people to the
transformation
Community Health
Network: Anatomy of
finance transformation
The history of Community Health Network mirrors
that of many health care systems today. Community has
grown and expanded through a long series of mergers,
acquisitions and strategic alliances over many years,
developing into a major regional health care provider.
With each expansion, the newly introduced entity
brought along its own set of business processes
and supporting financial systems. The end result
was an amalgam of different tools, applications,
and approaches to financial operations and data
management. With each additional entity, the real
integration work remained behind the scenes within
the operations of the health systems. Along with the
increased number and disparity of business processes,
applications and data volumes came an increasing level
of complexity for the organization and a decreasing
level of visibility to meaningful performance
information across the organization.
Holly Millard, Community’s senior vice president
of finance, summarized the effect this way: “We
were doing consolidation for a $2 billion network
in Excel. I was literally keypunching numbers into
a spreadsheet.” She explained, “We had as many
as five general ledgers across the network. Some
hospitals were utilizing costing systems; others
didn’t have any costing capability. We never had
business intelligence.
“We were spending more time entering and
formatting data than analyzing what was driving
performance. It could take three months to transform
data into insight. By then, it was too late.”
“We were spending more time entering and formatting data than analyzing what
was driving performance. It could take three months to transform data into insight.
By then, it was too late.” – Holly Millard, Community’s senior vice president of finance
Case study
Sector
Health system
Client challenge
Systems integration
Services provided
Finance transformation
MODERNIZE
your finance system
for improvement
Engage your senior management directly
FAST FACTS

After a thorough assessment of opportunities
and challenges, Community’s leadership
envisioned a fundamental financial operations
transformation that would:
• Provide an integrated enterprise platform
with standard business processes and shared
data governance
• Establish a flexible corporate chart of accounts
(CoA) across the network
• Increase transparency and visibility into drivers
of business performance
• Capitalize upon operational efficiencies gained
through the adoption of new technologies
• Establish a system foundation capable of
efficiently supporting ongoing operations
while enabling the delivery of enhanced
functionality over time
• Provide a scalable platform to cost-effectively
support growth and allow for integrating future
affiliates with relative ease
The rewards were enticing. The benefits from
transforming Community’s purchasing and supply
chain operations — just one piece of the puzzle —
had the potential to deliver financial gains sufficient to
offset the cost of the initiative. On a broader scale, the
potential of getting the organization to plan, monitor
and manage operations in a new way — supported
by high-quality, comprehensive information — held
tremendous opportunity.
If successful, the transformation would leverage
leading practices across each business process, putting
Community’s financial operations on par with the
most sophisticated health care systems in the country.
The risks were equally daunting. The project would
in some way touch every one of Community’s
13,000 employees. Supply chain modules, including
requisitioning, purchasing and inventory, would change
the daily work lives of more than 1,000 people, and the
new planning system would introduce an entirely new
paradigm for more than 300 department leaders.
Case study: Community Health Network: Anatomy of finance transformation
Community Health Network at a glance
As a nonprofit health system with more than 200
care sites and affiliates throughout central Indiana,
Community’s full continuum of care integrates hundreds
of physicians, specialty and acute care hospitals,
surgery centers, home care services, MedChecks,
behavioral health, and employer health services.
From all outward appearances, Community had
assembled into a single, integrated health care system.
But from a financial perspective, it was at best a loose
confederacy, failing to achieve the efficiencies, benefits
and superior outcomes that growth should deliver.
By 2013, it determined it was time for an investment
in back-office systems. Community decided to
undertake a strategic transformation of its financial
processes and supporting systems.
Planning for financial overhaul
“Our initial [request for proposal] only considered a
new general ledger system to bring all of our operating
units onto a common platform,” Millard explained.
“But ultimately, we discovered the opportunity and
need was much, much greater.”
Patient encounters: >2 million annually
Staffed hospital beds: 1,200
Hospital admissions: Approx. 54,000 annually
Outpatient visits: >1 million annually
ER visits: 275,000 annually
Outpatient surgeries: 85,000 annually
Inpatient surgeries: 13,000 annually
Physicians: 2,000; 500 employed
Employed physician visits: 700,000 annually
Employees: 13,000
Operating revenue: $2.1 billion

“Grant Thornton is a specialized Oracle partner with
expertise across all application areas. Community was
attracted to our Harmony Approach to technology-
enabled, large-scale transformation. Through Harmony,
Grant Thornton aligns, integrates and optimizes
industry best practices, business processes and enabling
technologies. This approach allows us to help clients
gain efficiencies, improve compliance and enhance
decision-making capabilities across their organization
in support of the company’s strategic objectives.”
Community was determined to find an
implementation partner that understood the
complexities of large-scale transformation and health
care finance and accounting; possessed the technical
skills and experience to deliver multiple interlaced
systems; and had proven program management
capabilities, as well as the bandwidth to take on
the effort. After a competitive proposal process,
Community selected Grant Thornton LLP and a
program team under the leadership of Bryan Wiggins,
principal in the firm’s Technology Solutions practice.
Project scope and implementation team
Ultimately, Community branded the project
“ResourceConnect” and planned on a total
overhaul of its finance processes and infrastructure.
For the underlying technology, Grant Thornton
recommended a suite of Oracle applications, including:
• PeopleSoft for general ledger, asset management,
project costing, purchasing, accounts payable
and inventory management, as well as nonpatient
accounts receivable and billing
• Hyperion Financial Management to consolidate
the books and produce consolidated financial
statements, and statutory and management reporting
• Hyperion Planning to support case-based
budgeting and provide one budget for the
entire network
• Hyperion Profitability and Cost Management
to bring accurate department cost insights at
the patient level
• Oracle Business Intelligence Enterprise Edition
and Essbase for financial, human resources,
procurement and spend analytics
• Hyperion Data Relationship Management
(DRM) to assist with metadata management such
as common CoA, hierarchies, ICD 10/DRG
mappings and job code classifications
“Community was attracted to the Oracle suite
because they were able to cover their entire
landscape of needs with best-in-class leading
solutions from a single industry-leading vendor,
taking advantage of products that are strategically
engineered to work together,” Wiggins noted.
Solutions included in Community’s
ResourceConnect
• Core financials and accounting
• Supply chain
• Financial close and reporting
• Planning and budgeting
• Costing and decision support
• Master data management
• Business intelligence and analytics
Working together, Community and Grant Thornton
adopted an integrated team-without-borders approach
to ensure client and consultant worked in lockstep
to meet an aggressive schedule. Hallmarks of the
approach included:
• Dedicated resources committed from both
organizations. Millard even went a step further:
“We pulled people out of their day jobs and
backfilled responsibilities; we even relocated many
to help them focus on the project.”
• Full-time program managers with both
organizations. From Grant Thornton, Wiggins
assigned Sharon Harrell, an experienced senior
manager with project management professional
certification. Millard engaged Bruce Allen, a former
Arthur Andersen partner with decades of experience
delivering major integrated finance systems.
• Both teams then assigned dedicated specialists
for each phase of the transformation.

General ledger chart fields
Business unit Department Account
3-digit number 6-digit number 5-digit number
Looking beyond the CoA, the team recognized
that a common set of data definitions would also
be required for human resources and timekeeping
applications, planning and costing platforms, the
network’s clinical electronic health records systems,
and other vital business systems.
Recognizing that many of these data types are not
strictly financial in nature, but play a critical role in
the running of a health system, Community took
this opportunity to extend its data governance efforts
beyond the financial CoA.
“Before we could accurately account for costs,
budget, or launch a procurement system, we needed
to create consistent financial data points — a common
language, so to speak,” Harrell said.
From the early planning stages of the program in mid-
2014 through the current day, Grant Thornton devoted
more than 70 specialists to the engagement — all of
whom worked side by side with their Community
counterparts on the ground in Indianapolis. In addition,
Grant Thornton leveraged its shared services center
in Bangalore, India, to provide cost-effective technical
experience where possible.
To oversee the entire transformation initiative, Millard
formed an executive steering committee with Joe
Kessler, chief financial officer; Ron Thieme, chief
knowledge and information officer; and Wayne Pack,
chief human resource officer. The steering committee
received weekly in-person status updates from the
transformation program leaders. With current insight
into challenges or roadblocks, it was able to make
critical decisions and muster resources in real time.
“We have been very hands-on at every step of the
process,” she said.
Common language, one version of the truth
The team’s first challenge was to convert the entire
network to a common language. At the project’s
initiation, Community’s various entities were
using five different CoA structures with little data
standardization across the network.
To create a new CoA for the organization, the project
team started by analyzing the largest entities’ chart
structure, expanding and enhancing from there. It
leveraged the redesign efforts to transform CoA details
with the hospitals, physician practices and overhead
organizations, and normalized department numbers
across the network. Going forward, the entire health
system will have the same definition for key chart
structures. For example, radiology will have the same
department number at every Community facility.
“We revisited the entire CoA to level the playing
field,” notes Harrell, Grant Thornton’s program
manager. “Our goal was to provide a structure
that worked across the different functions of
the network while also addressing network data
transparency and consistency.”
To serve as a repository and source for that common
language, Community leveraged DRM to keep all
related master data, hierarchies and values in control.
In addition to standardizing the chart, it also leveraged
the tool to manage job code classifications, and
reconcile the item master — reducing the number
of items and vendors by thousands, and managing
ICD10 mappings centrally within DRM.
Together, the new CoA and the DRM constituted
a preliminary “Wave 0” of Community’s
transformation, creating the foundation for the
application waves to follow.

“Prior to ResourceConnect, we had no standard
approach or platform for planning and budgeting, and
no reliable sources of data. It was a largely manual
process,” Campbell said. “With this project, we adopted
both a standard paradigm and tool for budgeting.”
In 2015, Community adopted “case-based” budgeting
as its systemwide standard. Using this approach,
department heads estimate the number of each type
of patient case they will perform over the year. The
budgeting system uses comprehensive and extremely
detailed cost data, combined with the projected case
volumes, to drive dependable, experience-based budgets.
The new capability affords the organization the ability
to flex the budget based upon actual variations in
volumes, providing supporting cost data — both fixed
and variable, as well as direct and indirect.
“Prior to case-based budgeting, we were doing revenue
and volume for projections, but didn’t have insight
into expenses,” Campbell noted. “With case-based
budgeting, we can look at things at a granular level.”
Conversion to case-based budgeting and the planning
tool represented a significant effort by Wegener and
a staff of four solution architects.
“The planning system provides the ability to pull data
from any source, delivering a very accurate, detailed
planning capability,” he said. “We built out the
system with three models, recognizing the difference
between how physician practices and hospitals deliver
service, as well as the need for corporate allocations
of budgeted data. In our models, we were extremely
detailed — for example, on labor costs, we extracted
data down to time spent per patient at the FTE
[full-time equivalent] level.”
With so many systems coming online for the
September close — core PeopleSoft financials,
CoA and DRM; Hyperion finance management,
profitability and costing and planning; Oracle
reporting tools; and linkages to HR and clinical
systems — the team was understandably tense.
Wave 1: Finance and reporting
With CoA and DRM underway, the larger team
worked toward a Sept. 1, 2015, go-live to deploy
many of the key systems. The planned rollout
included not only the core financials applications
in PeopleSoft, CoA, DRM, Hyperion Financial
Management, and Oracle reporting tools, but it
also added two additional applications: Hyperion
Profitability and Cost Management (HPCM) and
Hyperion Planning (HP).
Both HPCM and HP presented opportunities
and challenges.
The new consolidated financial system provided an
opportunity for Community to accurately understand
what had never been transparent before — the true
cost incurred to deliver services across its many
locations. HPCM provides that insight.
Cynthia Moehlman directs Grant Thornton’s
HPCM services.
“By and large, health care organizations lack
consistent data and insight to their actual costs
involved in delivering a service,” she said. “By costing
all the way down to ground zero, Community is able
to understand and compare costs across physicians,
facilities, supply types and procedures across their
network. They can develop analytics to understand
the differences at a facility or even physician level.”
For Community, the Grant Thornton team configured
the tool to pull data from every conceivable resource.
Primary data sources included the general ledger
and Hyperion Financial Management platforms.
Additional resources included billing systems for
details on supplies used, labor costs from the HR
system, data on procedures and tests from their clinical
data warehouse. The team even linked pounds of
laundry back to specific patient services.
Accurate cost and revenue data also open the door
to vastly more accurate budgeting and planning,
a process facilitated by Hyperion Planning. Amy
Campbell, Community’s North Region vice president
of finance, collaborated on this project with Todd
Wegener, a Grant Thornton senior manager.

Similar to the item master, Community also
needed a single vendor master. Prior to the
program, Community operated with siloed vendor
relationships, which did not establish a foundation
for negotiating the best possible contracts. With a
single vendor master, Community now has visibility
into spend for these vendors across the network.
Starting from this base, the new systems are delivering
impressive results:
• Reduced vendors from over 15,000 to fewer
than 9,000
• Standardized and cleansed over 65,000 items
across multiple item masters
• Reduced number of “periodic automatic
replenishment” restocking locations by 50
• Streamlined invoice review and approval
processes, launched invoice scanning for electronic
handling, and switched to electronic disbursements
— reducing paper check flow by one-half
• Implemented electronic data interchange (EDI)
capabilities consistently throughout, allowing
vendor data to flow directly into the system
With standardized and enriched item and vendor
master data, Community can now leverage its scale
to negotiate aggressive volume discounts and enforce
preferred vendors and purchasing policies systemwide.
With the program, Community took the opportunity
to deploy EDI transactions broader and deeper within
the system. The expansion enabled improved handling
and logistics at the receiving dock, improving time and
labor performance by as much as 40%.
The network is also positioned to further adopt
leading supply chain management practices, which
will ultimately allow them to track total inventories
and deploy existing stocks more intelligently.
“As Community begins to expand their use of
perpetual inventories with the new system, they will
be able to see inventories across the network. If one
department runs out of a critical item, they will be able
to find it elsewhere and move items around to best
support quality patient care,” Harrell notes. “The new
platform gives them tremendous flexibility.”
“Wave 1 went very, very smoothly,” according to
Harrell, Grant Thornton’s program manager. “In the
first quarter, the new systems eliminated two days of
manual consolidation effort in the month-end close
process, empowering much deeper review and analysis
of the financial data.”
Wave 2: All things supply chain
For the second wave of its finance transformation,
Community bundled everything related to its supply
chain operations — a massive undertaking for any
health care organization. Systems launched included
PeopleSoft inventory, purchasing and accounts payable.
According to Wiggins, supply chain represented a
very significant component of the program, with
deep reach into the organization.
“More than 1,000 employees are directly involved in
ordering materials and supplies, covering everything
from direct patient care to cleaning and administrative
supplies,” he said. “A critical focus was ensuring
no disruptions to the delivery of patient care, even
as significant changes were being made to the
procurement and inventory management processes.”
On this effort, the Grant Thornton team partnered
with Steve Bell, Community’s vice president of
supply chain management. He had spent his career
developing deep experience in supply chain best
practices; however, it was his first foray into the
health care industry when he joined Community
in 2010. Bell’s prior experience in other industries
allowed him to bring valuable insight on supply
chain best practices that he and the team were able
to incorporate into the design and implementation
of supply chain processes at Community.
The team’s first challenge was to create a unified item
master. At the outset, most operating units had their
own way of defining and ordering products. Items
and vendors had different identifiers; unit quantities
were even accounted for in different ways. The
existing system provided no ability to produce clear
inventories, no ability to share inventory to cover
shortages, no insight into network spending volumes
with individual vendors, and no means of enforcing
negotiated agreements.

Lessons learned
With the sweeping and fast-paced transformation
behind them, Community and Grant Thornton
project leaders offer several lessons learned to
other health care networks:
• Examine the state of your current finance
infrastructure. Are you grappling with multiple
general ledger systems and disjointed CoA? Does
your monthly close require time-consuming
consolidation? Are your reports timely enough
to drive business planning and reliable enough
to create insight? Do you know what it actually
costs to deliver specific services, and are those
costs consistent across your network? Is your
purchasing system driving down both costs
and inventories? Your answers may indicate
an opportunity to drive major improvement.
• Don’t think small. Modernizing any one aspect
of your finance system will deliver an incremental
improvement. But a true transformation, like
the one at Community, requires an integrated
approach that includes all of your fundamental
finance processes, as well as the third-party
systems that either provide or receive information
from these financial systems.
• Prepare for the future. Plan your new finance
infrastructure with an eye toward change—more
mergers, acquisitions, divestitures and alliances for
your network. In today’s health care environment,
they’re inevitable, so develop systems that are
agile, scalable and extendable to new entities.
• Focus your team. Assign your best people to the
transformation, and take everything off of their
plates. Backfill their “day job” responsibilities,
and empower them to focus on getting the
transformation right.
• Engage senior leadership directly. For
Community, the hands-on guidance of the
executive steering team ensured rapid responses
when challenges arose. Issues were addressed
weekly and decisions were timely, all with end
goals in mind.
Managing sweeping change
Anyone who has endured a major IT or enterprise
resource systems overhaul appreciates the massive
impact on the daily lives of people who work within the
organization. In Community’s case, the program didn’t
involve just one or two finance applications, but instead
overhauled every core finance system simultaneously.
As a health care organization, disruption or distraction
could directly affect quality of care in a very adverse
manner — an unthinkable outcome. From Millard’s
perspective, successful change management was vital
to a successful outcome.
“We engaged Grant Thornton to complete a change
readiness assessment of our organization,” Millard
said. “They interviewed stakeholders throughout the
organization. Those findings helped us understand
where we had weaknesses that required special
attention, communication and training.”
The team worked to build support across the
organization by keeping key leaders engaged
throughout the project.
“Community’s various units are all overseen by
10 executive leadership teams, divisional presidents
and their key staffs,” Allen explained. “We made it
a point to meet with each of those leadership teams
every month with detailed status updates on the
transformation. On the basic level, it kept them in
the loop. More importantly, they served as allies and
advocates within their organizations.
“I don’t believe it’s possible to overcommunicate
or overtrain for a transition like this,” Allen noted.
“But in the end, our transitions went smoothly,
and the new systems are being well-accepted.”

“Grant Thornton” refers to Grant Thornton LLP, the U.S. member firm of Grant Thornton International Ltd (GTIL), and/or refers to the brand under which the GTIL
member firms provide audit, tax and advisory services to their clients, as the context requires. GTIL and each of its member firms are separate legal entities and are
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firms are not agents of, and do not obligate, one another and are not liable for one another’s acts or omissions. In the United States, visit grantthornton.com for details.
© 2016 Grant Thornton LLP | All rights reserved | U.S. member firm of Grant Thornton International Ltd
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This content is not intended to answer specific questions or suggest suitability of action in a particular case. For additional information about the issues discussed,
contact a Grant Thornton LLP professional.
As Community’s program leader, Allen recommends
running toward problems, not away from them.
“I kept regular status reports on every aspect of the
project, including the usual green/yellow/red flags,”
he explained. “I was not opposed to showing projects
as red, even early on. I believe strongly that bad news
doesn’t get better with age. We all learned to get past
finger-pointing and collaborate on solutions.”
For Community’s Millard, her biggest takeaway
is the importance of surrounding yourself with a team
you trust. To that end, she credits Allen and the
Grant Thornton team led by Wiggins.
“Neither of those guys would ever let a project fail.
Regardless if it was me or not, they would do this
for any client,” she said. “I always know that Bryan
has my back. When I call, he reacts immediately. He
helped us find the right solutions and make sure that
we are using them in the best manner possible.
“This isn’t just a business transaction,” Millard
concluded. “It’s a partnership.”
By connecting and integrating every key aspect of Community Health Network’s finance
infrastructure — general ledger, data governance, reporting, planning, costing and
profitability, business insight and analytics, and supply chain — Grant Thornton is helping
a major regional provider gain control and drive consistency throughout its organization,
improve performance, achieve improved outcomes and prepare for future growth.
Bryan Wiggins
Principal
Technology Solutions
T +1 513 345 4630
E bryan.wiggins@us.gt.com
Sharon Harrell
Senior Manager
Technology Solutions
T +1 404 475 0020
E sharon.harrell@us.gt.com
Maura King
Key Account Executive
Health Care Advisory Services
T +1 312 602 8216
E maura.king@us.gt.com
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Purposeful integration: Your key to operational excellence

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