Situation
Modernize business operations to reduce cost and improve competitive advantage
John Muir Health, a three-hospital system (2 acute, 1 behavioral) in northern California with $2.1 billion in revenue and approximately 5,000 employees, became concerned about escalating costs and resolved to take about one third of their operating costs out of the budget in future years.
Like many of their industry peers, John Muir Health’s initial reaction was to modernize their technology infrastructure. They had a number of legacy systems across Human Resources, Finance and Supply Chain that were long past due for an upgrade. John Muir Health asked us to work with them on an approach to their technology migration. John Muir Health was surprised when we suggested they may be putting the cart before the horse.
Solution
PwC’s Provider Transformation Integrated Solution approach helped John Muir Health ask the right questions and drive results
Asking the right questions
John Muir Health knew that they were long past due for a system infrastructure upgrade. So they began by taking a step back and asking themselves how they were planning to modernize business operations and execute on their strategic imperatives over the next three to five years. Based on insight from PwC, John Muir Health focused their efforts on building 10 core capabilities: designing them into their operations, training their people and then automating the capabilities with the new software.
A new infrastructure was one clear goal, but John Muir Health knew it was time to understand how their Accounting, Supply Chain and Human Capital functions could support their strategic goals and drive ROI. How could these functions be reimagined to drive the business forward? Providers were facing many pressures, from declining margins to market consolidation to talent shortages. John Muir Health saw it was possible to streamline their processes and grow ROI. Additionally, they envisioned greater alignment between their existing Workday Human Capital Management (HCM) system and the other functional areas.
Embracing Cloud-based Supply Chain Management
John Muir Health was one of the first healthcare providers with complex supply chain requirements to adopt Workday’s SCM product. John Muir Health knew that having Supply Chain Management in the same system as Workday Financials would enable them to accelerate progress on their core capabilities. Utilizing PwC’s Provider Transformation methodology, the financial implementation reflected John Muir Health’s future state requirements, mapped to the Workday portfolio. John Muir Health worked with Workday and PwC to continue to advance the Supply Chain Management offering for healthcare, integrating real-time input from procurement and inventory users (including mobile) to influence ongoing development.
Acting in a stewardship role for the healthcare industry, John Muir Health collaborated with other healthcare providers facing similar challenges. They facilitated implementation requirements discussions, creating an industry forum for Supply Chain leading practices and lessons learned. This resulted in the open exchange of knowledge and insight as well as a Workday product that was more tuned to the specific needs of the leading providers.
Applying PwC’s Provider Transformation Integrated Solution framework
PwC’s Provider Transformation Integrated Solution framework proved a helpful roadmap to structure these engagements. The process involves first gaining consensus among stakeholders on project goals and defining future state operating models, processes and roles. Then we work with the client to determine how closely the proposed new system fits with the new processes and roles. Finally, we make sure that the new capability is rolled out successfully.
John Muir Health selected Workday as a common platform for all applications. As expected, once they had agreement on the strategic goals we were able to work together to align their current Workday HCM application to John Muir Health’s needs. Because the original HCM system was built on modern cloud technology, the workflows could be easily reimagined to improve the value of a unified solution for Finance, Supply Chain and HCM. The project started with implementing Workday Financials to support management's vision and provide better insights into data. John Muir Health then added the Workday Recruiting and Onboarding modules, allowing them to help realize additional value by decommissioning legacy point solutions.
Results
Transformation across the business architecture delivered process efficiencies and financial savings for John Muir Health
John Muir Health was able to grow the business capabilities needed to support their strategic agenda using PwC’s Provider Transformation Integrated Solution as a framework. They were able to drive transformation across their business architecture through organizational redesign, process reengineering, controls and the deployment of new, cloud-based software from Workday.
The benefits to John Muir Health so far, include:
- Better and more timely information to make decisions
- Standardized reporting and metrics
- Automated processes (reduction in manual intervention and potential errors)
- Improved internal controls/compliance (standardized processes)
- Increased mobile technology access, improving processing time for approvals of invoices, job requisitions, etc.
Workday Awards and Accolades:
- John Muir Health, Collaboration Champion Award, Workday Rising 2019
- PwC and John Muir Health, Improving John Muir Health’s satisfaction to 100, Workday Altitude 2018 Keynote Address
On a more tactical level, John Muir Health has
- Improved time-to-close from 10 days to 7 days
- Expanded the percentage of transactions that are placed on a purchase order by 25%, allowing John Muir Health to gain greater visibility of its organizational spend
- Increased time savings with the implementation of an integrated recruiting system, reducing the amount of time needed to post a job requisition and process new W-2 hires
- Increased the efficiency of managing headcount, positions and vacancies through the reduction of manual processes and business integration of position management with talent acquisition
- Reduced paper costs by adopting handheld technology to manage inventory
- Improved user satisfaction with the Workday product
- Laid the foundation by implementing cloud-based software to support partnering opportunities with a third party (Optum) to outsource procurement, IT and revenue cycle
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“PwC helped to challenge us to re-examine our business needs and processes, as well as, leverage leading practice solutions to help address those challenges. PwC was a valued advisor in helping us not only implement the leading Workday technology but to get the most value from our ERP investment by thinking about the business and operational needs beyond the technology.”
Jeff Smith
Controller, John Muir Healthcare
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“Being one of the first healthcare providers to undergo a transformational approach to reimagining their technology infrastructure, John Muir Health markedly improved their own business and also sparked innovation and change within their industry.”
William Perry
Principal, PwC
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