Amazon Connect now offers a preview of Forecasting, Capacity Planning, and Scheduling capabilities directly from the Amazon Connect console. This is a significant step forward since Amazon Connect already offers integrations with the leading WFM providers. However, with these out-of-the-box features based on machine learning, Amazon now allows its customers to safely predict their future contact center volume and average handle time without utilizing any third-party tool.

In this blog post, I will describe in more detail how I set up Forecasting, Capacity Planning, and Scheduling.

Forecasting in Amazon Connect

Predict your contact center call volume and average handling time with high accuracy

The first thing you need to ensure is that you have the proper permissions to view and access the forecasting features in case you are not set up as an Admin in your Amazon Connect instance. Under Security Profiles for your role, make sure the Scheduling and Agent Application permissions are as follows:

Once this is done, you can navigate to the Forecasting page. Testing this new feature is highly recommended in a production environment as it won’t cause any issues, and you won’t need to worry about importing any dummy data. In my case, I had to import dummy data for the past year to ensure there was enough data to successfully calculate long-term and short-term forecasts.

If you have to use dummy data, you need to upload it in .csv format using the following two intervals:

• 15-minute or 30-minute intervals to generate the short-term forecast, and
• daily intervals to generate the long-term forecast.

Along with proper data, you also need to create at least one forecast group that has at least one queue. If there isn’t enough contact volume in a single queue, selecting multiple queues is recommended, and optionally separating them into different forecast groups is recommended.

Once you click the Create Forecast button, you will need to wait between a couple of hours to a full day for the system to calculate the short-term data and about a week to generate the long-term data. This is because short-term data is generated daily, while long-term data is generated weekly.

Below is an example of the long-term forecast for our contact volume for the next 18 months. It is great that you can filter by queue or channel and select the desired time frame.

Once you are satisfied with the forecast, you need to publish it to use it for Capacity Planning and Scheduling.

Capacity Planning in Amazon Connect

With Capacity Planning, estimate how many full-time equivalent (FTE) employees are required

Using a long-term contact volume forecast, you can estimate how many agents you need to hire for the next 12 months. To start, you need to create an input scenario where you specify max occupancy, overtime, work hours, attrition rates, in-office and out-of-office shrinkage, and time off for all your FTE employees. Your input will help the tool predict more accurately your future staffing needs.

After you create a scenario, you are ready to generate your capacity plan for the desired time frame. The screenshot below tells exactly how many FTE agents my contact center requires each week based on the estimated contact volume. The system can also warn if there is a need for more FTE employees for a specific time frame, or vice versa, when you have more FTE employees than might be needed. Based on the prediction, FTE agents can plan their vacations accordingly. It’s amazing how this simple feature can help supervisors and agents with proper planning.

Scheduling in Amazon Connect

Ensure you have enough FTE agents in the shifts to support customer contacts

With Scheduling, you can also create interval schedules for your FTE employees according to the future number of contacts predicted by the ML algorithm. With Staff Rules, you enter specific information about each agent’s working hours, start date and end date, and time off.

With Staffing Groups, the agents and supervisors are grouped into shifts; this is how you ensure you have properly skilled agents available at the right time of the day. Shift Profiles help determine start and end times for your daily contact center operation based on how the system divides agents into groups and shifts.

With Shift Activities, it is simple to determine what is allowed and expected from employees during their shifts. In my example, lunch and breaks are set up at the exact time of the day for each employee, so this time can also be included in the calculation when making the schedule, as no contacts are expected for those agents at that time.

Now when all is set, we are ready to generate our schedules based on the short-term forecast and it looks similar to the below screenshot:

When supervisors are satisfied with the schedule, they can easily publish it and make it available to their agents.

And this is it, as simple as that! I am impressed by how easy it is to start planning your future contact center volume and staffing without spending additional money on custom integrations. It is flexible to set up and allows supervisors to create capacity plans and schedules with high efficiency, even when the agents have many unique schedule requirements. Considering this feature is safe to be used in production instances, I can’t wait to see when it becomes publicly available, knowing how beneficial it will be for Amazon Connect customers.

If you’re interested in maximizing your contact center’s efficiency, we can help. At Perficient, we are an APN Advanced Consulting Partner for Amazon Connect, giving us a unique set of skills to accelerate your cloud, agent, and customer experience.

Perficient takes pride in our personal approach to the customer journey, where we help enterprise clients transform and modernize their contact center and CRM experience with platforms like Amazon Connect, ServiceNow, and more.

Please contact us here for more information on how Perficient can help you get the most out of Amazon Connect.

Join us and our partner Amazon Web Services (AWS) for a virtual Q&A session on Wednesday, April 15. AWS will feature one of our experts to speak on a panel about the evolution and progress being made to solve critical business problems such as customer personalization and forecasting through the use of data science.

Perficient and the panel will be ready to answer questions about machine learning, services such as Amazon Personalize and Amazon Forecast, and more.

Leveraging Innovations in Data Science

Data science can add value to any business in any industry. Here are two ways AWS is bringing value to data through data science.

Amazon Personalize

Amazon Personalize allows developers with no prior machine learning experience to easily build sophisticated personalization capabilities into their applications, using machine learning technology perfected from years of use on Amazon.com.

Amazon Personalize can:

• Keep the data it analyzes private and secure, and only uses it for your customized recommendations
• Deliver personalization to individuals at scale with high-quality recommendations
• Blend real-time user activity data with existing user profile and product information to identify the right product recommendations for your users at that moment

Use Cases:

• Personalized search recommendations – Tailor content to a user’s behavior, history and preferences.
• Personalized search – Using behavioral data from past application interactions, search results consider a user’s preferences and intent to surface products that are relevant to them and not just the search term.
• Personalize notifications – Align marketing promotions to users’ behavior, interests and context to increase conversion rates.

Amazon Forecast

Amazon Forecast uses machine learning to combine time series data with additional variables to build forecasts. Amazon Forecast requires no machine learning experience to get started. You only need to provide historical data, plus any additional data that you believe may impact your forecasts.

Amazon Forecast can:

• Produce a forecasting model capable of making predictions that are up to 50% more accurate than looking at time series data alone
• Reduce forecasting time from months to hours
• Create virtually any time series forecast
• Secure your business data and peace of mind

Use Cases:

• Product demand planning – Using your forecast information, Amazon Forecast will produce a model that accurately forecasts customer demand for products at the individual store level. You can then export your forecasts in batch in CSV format and import them back into your retail management systems so that you can determine how much inventory to purchase and allocate per store.
• Financial planning – Forecast key financial metrics such as revenue, expenses, and cash flow across multiple time periods and monetary units using your historical financial time series data. This service can also visualize forecasts with graphs.
• Resource planning – Maximize revenue and control costs by planning for the right level of available resources, such as staffing levels, advertising inventory, and raw material for manufacturing.

Find Value in Your Data – Register Today

Ask questions and learn more about the AWS services mentioned above and how you can leverage data science by registering for the AWS virtual expert panel Q&A session today.

While the term “business transformation” has been floated around for decades, digital and the deployment of modern technology remain the cornerstone of today’s investment decisions. Customer expectations have changed greatly in recent years. Strong brands like Facebook, Amazon, Apple, Netflix, and Google, which investors often refer to as FAANG, have changed consumer behavior. Not only have the ways in which these companies successfully operate altered customer expectations, they have also forced airlines to think and act differently. Airlines are after personalization, ease of use, and innovation. And they must think as if Amazon can get into their business tomorrow.

Yes, this relates to enhancing a mobile app so that it is easier to (or automatically!) check in for a flight, navigate an airport, schedule a shuttle, chat with an agent, or manage points. However, companies must modernize many other back-end, non-customer-facing technology investments – for example, technology that helps predict maintenance or systems that help with inventory management. These are the systems that keep the wheels turning and that have a direct impact on productivity, not to mention the customer. Digital transformation is also about investing in new technologies, such as machine learning, artificial intelligence, and the Internet of Things (IoT).

That said, transforming or growing a company isn’t just about the deployment of exciting new digital technology. It could be about implementing a new revenue-management system that helps airlines better forecast and optimize revenue. It could be a branded fares and segmentation initiative. It’s also about reengineering more traditional business processes and cutting costs to become more efficient, as well as about creating the best experience for employees and customers at the lowest cost possible.

To succeed in this business, leadership must have a vision for the future and a commitment to its stakeholders. Without either of these, a company will not likely be a leader in the space, let alone be around for long. At the end of the day, the right choices empower growth. Having the right initiatives and strategies in place can help ensure growth and profitability.

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Perficient published a new guide that focuses on the airline industry – the companies that operate air transport networks. It looks at the current and future state of the industry. Specifically, it discusses some of the initiatives on which airlines are focusing in the hopes of driving growth and value for their businesses, as well as their customers, employees, partners, and shareholders.

Download the 2018 State of the Airline Industry guide.

Cutting unnecessary costs and investing in technology (e.g., digital, planes) to support the business is a complex task, but certainly a requirement for long-term growth. Fuel costs – the number-one non-labor expense for airlines – can only be hedged to the degree the petroleum market allows and that is by and large outside the control of airlines. Labor expenses continue to increase, and the cost of new technology isn’t getting any cheaper. However, investment in new technology can help decrease labor and operational costs over the long run. Planes are more efficient than ever before thanks to improved engines, better aerodynamics, and more sophisticated materials. They burn less fuel. New aircraft equipment requires less maintenance.

During the latest review of the company’s performance, Johan Lundgren, CEO of easyJet, an airline that focuses on cost control, said, “I’m changing the structure in that I am creating the new position of chief data officer, who will report directly to myself and will further build on work we have already done with data science to exploit the opportunity of the billions of data points [we have] within the organization.”

On the company’s most recent earnings call, Delta CEO Ed Bastian said, “With 60 new aircraft to be delivered this year, our up-gauging strategy is set to produce some of the greatest efficiency gains in Delta’s history and will play a key role in returning our cost to a better level.” Paul Jacobson, Delta’s EVP and CFO, said the investment “will drive some of the greatest efficiency gains in Delta’s history with over $100 million in expected non-fuel savings this year alone.”

Jacobson also said the company would invest $450 million in technology in 2018, similar to what it spent in 2017. An area of focus will be digital, which will “benefit our employees and our customers and allow us to serve those customers better.”

United is also heavily focused on digital. Andrew Levy, United’s EVP and CFO, said, “We’re making a lot of investments in technology and that’s very deliberate. That is to be able to better take care of our customers, give our employees the tools they need to be better able to take care of our customers. It’s going to drive operational efficiency and therefore lower costs on the back end as well, and we’re making a lot of investments in infrastructure, disaster recovery, things of that nature that are foundational and really critical that we do.”

The company laid out some employee-facing achievements:

• Took several actions to improve the overall customer experience, including providing more tools for employees to assist customers and increasing compensation for denied boarding
• Rolled out a new system-wide Customer Solutions Desk with a dedicated team to develop creative solutions that help customers reach their final destinations when their travel plans don’t go as expected
• Continued improving the mobile tools that employees use, including the first release of the “in the moment” care app, and new functionality in flight attendant tools to better serve customers
• Launched a new online portal, United Jetstream, to simplify the travel management process and give corporate and agency customers an intuitive suite of self-service tools

Similar to airplanes, technology, and security, investments in airport projects that include revamping terminal facilities will allow companies to improve the customer experience, as well as expand their footprint, all of which bolsters revenue. The reason for the substantial investments into airport terminal enhancement projects is to “create a world-class customer experience,” said JetBlue’s president and CEO, Robin Hayes.

When speaking about airports, Steve Priest, JetBlue’s CFO, said the airline has “now deployed self-tagging technology in 12 lobbies.” He went on to say, “This initiative is part of a broader effort to empower both our customers and crew members and allow crew members to focus more on what they do best, providing outstanding hospitality.”

During a presentation to investors, Delta said that it will invest $12 billion in airport facilities over the next decade, with the intention of improving the customer experience. The goal is to build “airports of the future,” keeping in mind possible future trends.

As critical investments are made to drive revenue and improve the customer experience, cost-cutting initiatives continue to be carried out. Notably, in December 2016 JetBlue announced a structural cost program aimed at generating $250-$300 million in cost savings by 2020. According to the company’s 2016 annual report, the program focuses on:

• Technical operations, with an eye on driving efficiencies in maintenance
• Planning, automation, and execution in airport operations
• Finding further efficiencies through sourcing and in its support centers
• Decreasing distribution costs

While new investments in technology and cost-cutting programs remain important initiatives for airlines, other factors, like tax reform, can spur growth, too. The impact of lower corporate tax rates in the U.S. has created a jubilant atmosphere, as the rates are expected to boost earnings for many airlines. “We are very excited about the potential for increased business demand with the tax cut,” said Glen Hauenstein, president of Delta. The company believes its earnings will increase by $800 million a year.

As soon as the new U.S. tax law was enacted, JetBlue gave a $1,000 bonus to its crew members. The company said tax reform “will have a positive impact for our company” and will give JetBlue “the opportunity to do good things for our crew members, customers and owners.” Southwest was another airline that gave $1,000 to employees.

The bottom line is that airlines must understand where it makes sense to cut costs and where to make the proper investments. It’s about creating value for customers, partners, and shareholders.

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Perficient published a new guide that focuses on the airline industry – the companies that operate air transport networks. It looks at the current and future state of the industry. Specifically, it discusses some of the initiatives on which airlines are focusing in the hopes of driving growth and value for their businesses, as well as their customers, employees, partners, and shareholders.

Download the 2018 State of the Airline Industry guide.

Customer satisfaction is always top of mind for airlines. Unhappy or disengaged customers naturally mean fewer passengers and less revenue. It’s important that customers have an excellent experience every time they travel. On-time flights, good in-flight entertainment, more (and better) snacks, and more legroom might be the obvious contributors to a good experience and more loyalty.

While we might hear about those aspects the most, the customer experience is not about just the flight itself. It’s everything from purchasing the ticket on the company’s website or mobile app to checking bags in at the airport or via a mobile app to waiting in the terminal. Self-service has been top-of-mind for airlines since the introduction of airport kiosks that enable passengers to check-in, upgrade their seats, and even make flight changes. This mindset has been, and continues to be, adapted to the post-security, onboard, and post-flight experience.

In a paper titled “Flight Data Powers the On-demand Economy,” OAG, the leading global provider of digital flight information, said, “Traveler expectations continue to be influenced by the immediacy of the on-demand economy. As technologies like Uber and Airbnb make hailing a car or renting a room within minutes the norm, consumers are beginning to expect similar real-time availability and convenience from other travel brands they frequently use.”

United shared a handful of customer-facing achievements before its January 2018 earnings call.

• Unveiled new enhancements to its award-winning mobile app, including a bag-tracking feature, the ability to change and cancel flights in the app, the addition of MileagePlus and United Club cards to the Apple Wallet, and allowing customers to access boarding passes for 19 other carriers
• Became the first airline to give customers access to flight information and other amenities skills for Amazon Alexa, Google Assistant, and the Fitbit Ionic smartwatch

Robin Hayes, president and CEO of JetBlue Airways, said the company has “a number of work streams underway to drive a digital transformation over the next few years. We’ve been rolling out a suite of customer self-service tools, which integrate technology in all aspects of travel and improve the customer experience as we work to reduce our costs.”

However, many other factors are tied to the overall customer experience, and these can drive or hinder growth.

In a January 23, 2018 press release, United president Scott Kirby said, “Our focus will be on continuing to improve customer service and expanding United’s network to offer customers more choice.”

During the company’s earnings call earlier this year, Kirby spoke in detail about the company’s plans to strengthen and grow the airline’s route networks. He said it’s the “foundation that everything else is built upon.” The benefits of more “connectivity,” as he put it, are exponential. “You add one flight into a hub that has 80 connections. You don’t just add one market like a point-to-point carrier would be doing; you add 80 new markets, and that strengthens the whole network.”

Speaking to CNBC about the improvement of its core operations, Scandinavian Airlines president and CEO Rickard Gustafson said, “…we need to increase productivity.” He said that the industry will experience significant change because of advancements in technology. A greater need exists to use data and artificial intelligence to create more personal relationships, as opposed to “one-to-many” relationships. “Artificial intelligence will come into play in the way we distribute products and the way we service customers.” Longer term, Gustafson thinks the changes will be related more to “hardware,” like self-driving trucks at the airport or airplanes and how they power up. Bottom line, he firmly believes that the path to efficiency will be through data and new technology.

What we know is this: higher customer satisfaction increases customer loyalty, resulting in customers who are willing to purchase more of – and spend more for – products and services. Knowing the relationship between customer satisfaction and yield is critical.

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Perficient published a new guide that focuses on the airline industry – the companies that operate air transport networks. It looks at the current and future state of the industry. Specifically, it discusses some of the initiatives on which airlines are focusing in the hopes of driving growth and value for their businesses, as well as their customers, employees, partners, and shareholders.

Download the 2018 State of the Airline Industry guide.

The strategic vision of the manufacturing and automotive treasury function is to deliver efficiency, control, and scalability. The logical structure for this transformation includes several key components: business events, centralized demand deposit accounts with banking connectivity, and a reporting data warehouse.

A comprehensive finance and treasury transformation program can help improve cash and liquidity management, reduce manual processing, automate financial and risk reconciliation, and accelerate financial close. It can also help you enable information delivery and simplify the integration of general ledger and golden source data in reporting.

Finance and treasury transformation ultimately makes your organization more flexible and nimble in order to meet your changing business needs. Below are just some of the problems we frequently see, and how such a program can help you solve them.

CASH BALANCE REPORTING AND LIQUIDITY MANAGEMENT

PROBLEM

The financial officers in an organization’s subsidiaries have established their own banking relationships, which results in large numbers of accounts and external banks. The use of multiple banking relationships across the globe is expensive and lacks centralized management and oversight. Transaction costs are high and have multi-day settlement periods.

Corporate level cash balance reporting is difficult. Management of liquidity is difficult. The finance officer of the subsidiaries is responsible for “sending” the excess to corporate, which is too late for centralized overnight investment.

Large, multi-billion dollar bond payments require multiple account balance transfers and manual handholding of transactions or fees for a liquidity account, not to mention the associated interest costs.

SOLUTION

Establish an in-house bank with a centralized DDA accounting system with key functions, such as excess cash sweeps and direct payment integration with key banking relationships. This allows subsidiaries to utilize the in-house bank and reduce or eliminate banking relationships. It provides a real-time view of their liquidity to the corporate treasury. This solution should also automatically reconcile transactions and banking balances to in-house balances giving the CFO a daily picture of unreconciled items.

This system can also be a centralized (shadow) DDA accounting system for all bank accounts and provide the automated reconciliation of accounts transactions and balances, or simply provide an automated reconciliation system. This system should be directly integrated with the bank’s statements. This system will also provide the CFO with a centralized list of banking relationships, related costs, and reconciliation function.

Centralizing banking relationships to a universal bank will reduce per-account fees and transaction fees for interbank transfers, allow multi-currency accounts, and centralize FX costs.

ORGANIZATIONAL PROFITABILITY, FORECASTING, AND REPORTING

PROBLEM

Multiple treasury systems are not directly integrated with the general ledger or payment systems. This makes it difficult for the CFO to understand the total picture of liabilities and hedges globally. The risks of derivative transactions are not centrally managed. The costs and hedge effectiveness of derivatives are unclear. This makes it difficult for the CFO to measure return on capital invested in subsidiaries.

SOLUTION

Implement and consolidate into a single treasury management system and create a risk trade warehouse. This system should be directly integrated to the in-house bank for cash management and payments. The system should have built-in hedge effectiveness reporting and also provide a return on capital/return on equity investments reporting.

In addition, a centralized risk warehouse will provide better strategic planning on derivatives reporting and finance industry regulatory changes, such as derivatives clearing and operational efficiencies in trade confirmation and payments. It can also reduce costs and operational risks through netting.

REGULATORY AND COMPLIANCE REPORTING

PROBLEM

Compliance functions such as anti-money laundering, anti-corruption, and other anti-financial crime initiatives are distributed and not measured consistently across subsidiaries exposing the firm to be complicit in fraud.

Operational risk management systems are not consistently updated and maintained, leading to higher capital reserves to cover costs of breaches. The key risk indicator and key process metrics are not consistently managed and reported.

SOLUTION

Implement an operational risk system (ORM) and consistently manage key risk indicators and key processes that mitigate the risks. Tie capital reserves directly to metrics and manage reserves based on metrics.

Integrate the operational risk system to the risk warehouse. The systems that provide ORM require all historical transaction data to be retained and centralized. Both a centralized DDA and a trade warehouse support this function and ensure a more consistent set of data for analytics, and reduce the costs of implementation with fewer data feeds. Missing data and data quality issues can be directly addressed as the sources are centralized and changes can be more easily implemented.

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If you are interested in learning about Perficient’s finance and treasury transformation services, please complete the contact form at the bottom of this page.

Operational performance (or operational reliability) is about running an airline like a well-oiled machine. Pun intended. It’s about on-time performance and completion rates. It’s about reducing involuntary denied boardings and the rate of mishandled bags. It’s ensuring that continuous improvements and efficiencies are always in motion. A smoothly run airline enhances customer perception, satisfaction, and loyalty. Naturally, fewer operational hiccups means better cost efficiency and overall financials.

Tim Porter, a director and airline expert at Perficient, said, “Operational performance is a big deal to airlines. They invest billions in this because the cost of irregular operations is huge from both and economic and customer satisfaction point of view. Airlines have invested billions to improve recovery from irregular operations. They are now looking at ways to improve network reliability and drive down costs from the process.”

Speaking on the company’s latest earnings call, United Airlines CEO Oscar Munoz said, “We ran and continue to run a great operation and that helps immensely with regards to our cost…running better is running cheaper.”

Delta Airlines believes operational reliability is one of its strategic advantages. The company calls itself “American’s best-run airline, consistently delivering industry-leading, operational results and driving further improvement and efficiencies through innovation.”

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Perficient published a new guide that focuses on the airline industry – the companies that operate air transport networks. It looks at the current and future state of the industry. Specifically, it discusses some of the initiatives on which airlines are focusing in the hopes of driving growth and value for their businesses, as well as their customers, employees, partners, and shareholders.

Download the 2018 State of the Airline Industry guide.

If you listen closely to industry executives, you’ll note that many of them typically hone in on several key strategic initiatives. Naturally, there’s a crossover between them, and each one can affect the other. Operational performance or operational reliability is one. Customer satisfaction, customer loyalty, or brand strength is another. Last but not least are cost-cutting and technology investments.

Airlines are focused less on market share and more on their overall profitability. They are focused on initiatives that can cut costs, yet boost customer satisfaction at the same time. They’re interested in understanding why passengers buy, what they value, and how they can strengthen their relationships with them.

These areas are what companies and their leadership teams think about day in and day out. These are the topics they discuss during management meetings and with shareholders and analysts.

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Perficient published a new guide that focuses on the airline industry – the companies that operate air transport networks. It looks at the current and future state of the industry. Specifically, it discusses some of the initiatives on which airlines are focusing in the hopes of driving growth and value for their businesses, as well as their customers, employees, partners, and shareholders.

Download the 2018 State of the Airline Industry guide.

The airline industry is scrutinized by passengers and analysts alike, mostly for two reasons. One, many people take one or more flights a year and have personal experiences that leave lasting impressions. Two, the industry’s economic impact is unprecedented.

According to the Federal Aviation Administration (FAA), “Aviation accounts for more than 5% of our [United States] Gross Domestic Product, contributes $1.6 trillion in total economic activity and supports nearly 11 million jobs.” In a closely related industry, the manufacturing of planes is the country’s “top net export.” The industry is also a major contributor to national productivity growth.

From a global perspective, the impact on the world economy is even more substantial. A study conducted by Oxford Economics on behalf of the Air Transport Action Group (ATAG), an independent coalition of organizations and companies in the air transport industry, indicates that the estimated global economic impact of air transport is equivalent to 8% of the world’s gross domestic product.

Digest these numbers for a minute. In 2015, the world’s airlines carried more than three billion passengers, and today aviation and related tourism supports more than 60 million jobs worldwide. Almost 10 million people work directly in the aviation and air transport industries. More impressive is the fact that, according to research, 25% of all companies’ sales depend on air transport.

While many types of businesses (e.g., manufacturers of commercial jetliners) can be considered part of the aviation sector, our new guide focuses on the airline industry – the companies that operate air transport networks. It looks at the current and future state of the industry. Specifically, it discusses some of the initiatives on which airlines are focusing in the hopes of driving growth and value for their businesses, as well as their customers, employees, partners, and shareholders.

Download the guide.

I recently wrote a blog post called The Value of Care: The Secret Sauce in which I talked about the importance of having transparency of data. Costing is an evolutionary process perhaps starting with one type of procedure, one clinic or one service line or perhaps starting with a hybrid of costing methodology.   The great news is that the beauty of technology can help realize the goal of improved costing by allowing for the use of multiple costing methodologies with full traceability and transparency to the underlying data.

Transparency of data and the ability to perform micro-level costing are both features that are missing from most cost accounting software today.  Having data doesn’t itself make a company successful; organizations must act on information and filter what is useful, appropriate and above all else, actionable. Correlating data from a clinical and financial perspective provides a linkage between price and cost as well. There are many factors that influence price setting, not the least of which is the federal government (Medicare/Medicaid), but one reason that hospitals don’t more closely link pricing to margins is that they lack visibility into their own data.

There are several different types of data necessary to achieve transparency and each of these data types are vital to the decision support system to answer tough questions such as:

• How is your organization using cost of care insights within the quality management strategy?
• What is the cost management vs. margin accountability strategy?
• How is your organization using cost of care insights within your population health strategy?
• What cost management data are needed to for shared risk contract negotiations, price setting strategies?

Provider organizations will require discipline to bridge operational and clinical functions – including collaboration from the CFO, finance staff, CMO (Chief Medical Officer), CNO (Chief Nursing Officer) and division/department administrators – to consider quality, safety, patient satisfaction, and financial performance simultaneously. Additionally, some organizations may need to significantly and fundamentally rethink operations and what services and businesses are core to their mission.   New productivity measures may emerge and new and different uses of technology may emerge.  There is a fundamental culture shift that will require collaboration and significant leadership to see it through to completion.

The Perficient High-Performance Costing Expressway provides a complete solution that enables hospitals to rapidly deploy a micro-level costing solution. It provides integrated software and hardware with a prescribed set of data integrations and services to quickly deploy a costing application. The Perficient High-Performance Costing Expressway leverages Oracle’s Hyperion Profitability and Cost Management (HPCM) and the Oracle Healthcare Foundation to provide an unified healthcare analytics platform for decision support.

The Value of Care: The Secret Sauce is just one of the healthcare enterprise performance management trends. In our new guide, we take a look at six performance management trends healthcare executives need to be thinking about in 2016 and beyond. We’ll identify technology strategies and solutions that will help healthcare organizations succeed in a data-driven, cost-management culture.

TREND #6: INNOVATION: MOVEMENT TO THE CLOUD

Enterprise performance management solutions are in a period of rapid transformation to the cloud. According to Gartner, the issues driving CFOs to consider the cloud are:

• Faster Development = Increased ROI: A recent study by Nucleus Research reported that cloud applications deliver 1.7 times the ROI of on premise applications including less consulting and infrastructure.
• Quicker facilitation for mergers and acquisitions: Cloud applications deliver the agility to shorten lengthy business process alignment and more quickly realize the strategic benefits that drove the merger.
• More flexibility to enter new markets: Healthcare is now in a state of consolidation, and realignment and cloud solutions can help organizations support newly established or acquire offices with many of the locked-in hardware, integration, and support costs previously required.
• Shifting from CAPEX to OPEX: With cloud, CFOs enjoy the advantage of an operational expense approach without the upfront hardware, software, and other costs of a capital expense model. This both alleviates cash flow concerns and increases ROI.
• Updates as a service: Instead of “lift-and-shift” upgrade processes that must be planned for months in advance, with the cloud they are automatic, secure, and installed by the vendor on a regular basis.

Cloud solutions must provide the ability to solve complex use cases and integrate seamlessly with data warehouses and other data sources.

This is just one of the healthcare enterprise performance management trends. In our new guide, we take a look at six performance management trends healthcare executives need to be thinking about in 2016 and beyond. We’ll identify technology strategies and solutions that will help healthcare organizations succeed in a data-driven, cost-management culture.

TREND #5: VALUE OF CARE: THE SECRET SAUCE

Costing is an evolutionary process that begins with one type of procedure, one clinic, or one service line, or perhaps with a hybrid costing methodology. The great news is that technology can help realize the goal of improved costing by allowing for the use of multiple costing methodologies with full traceability and transparency to the underlying data.

Transparency of data and the ability to perform micro-level costing are both features that are missing from most cost accounting software today. Having data doesn’t itself make a company successful; organizations must act on information and filter what is useful, appropriate, and above all else actionable. Correlating data from a clinical and financial perspective provides a linkage between price and cost as well. There are many factors that influence price setting, not the least of which is the federal government (Medicare/Medicaid), but one reason hospitals don’t more closely link pricing to margins is they lack visibility into their own data.

Several different data sources are needed to achieve transparency:

• Transactional: Data recorded at the lowest level of detail within the EMR or ERP systems
• Aggregated: Data that is aggregated for analytics
• Allocated: Data that is created during the costing process

Each of these data types is vital to the decision-support system to answer tough questions such as:

• How is your organization using cost of care insights within the quality management strategy?
• What is the cost management vs. margin accountability strategy?
• How is your organization using cost of care insights within your population health strategy?
• What cost management data are needed to for shared-risk contract negotiations and price-setting strategies?

To understand and achieve sufficient transparency and sustain a proactive approach to maintaining margins, hospitals must be capable of correlating costs for supplies and drugs, etc. with the costs of care providers and overhead. They must be able to compare these costs with the payments from health plans, individuals and other purchasers. Bringing together the necessary data is not easy and should be approached iteratively using a configurable set of analytic tools that can provide the right data to the right individuals in the organization who manage operations and continue or create new services. Provider organizations will require discipline to bridge operational and clinical functions – including collaboration from the CFO, finance staff, chief medical officer, chief nursing officer and division/ department administrators – to consider quality, safety, patient satisfaction, and financial performance simultaneously.

In some organizations, there may be a need to significantly and fundamentally rethink operations and what services and businesses are core to their mission. New productivity measures may emerge and new and different uses of technology may emerge. There is a fundamental culture shift that will require collaboration and significant leadership to see it through to completion.

Priorities must be set for integrating and storing data to support these initiatives. The volume of data needed to extract and evaluate EMR patientlevel data on a daily basis is not something for spreadsheets. While data visualizations can take many forms, the data analysis for quality and cost has to be repeatable, sharable, and trustworthy

This is just one of the healthcare enterprise performance management trends. In our new guide, we take a look at six performance management trends healthcare executives need to be thinking about in 2016 and beyond. We’ll identify technology strategies and solutions that will help healthcare organizations succeed in a data-driven, cost-management culture.