Successfully Implementing an Aggregate Spend Solution

February 19, 2013

Agenda

Understanding the Current Environment - Survey

Implementation Case Study

Approach for Implementing Aggregate Spend Solutions

Key Takeaways

Understanding the Current Environment - Survey

My Company is Live on an Aggregate Spend Solution

• The system optimally supports the business process

• Not all processes are automated but the solution is functional

My Company is Currently Implementing an Aggregate Spend

Solution

• First Implementation

• Implementing upgrades or improvements to the existing solution

• Replacing Existing Solution

My Company is Currently Considering a new Aggregate

Spend Solution

AGGREGATE SPEND SOLUTION/SYSTEM EFFECTIVENESS

Understanding the Current Environment - Survey

My Implementation was completed on time, within budget

and encountered minimal issues

Experienced Issues implementing the Aggregate Spend

Systems

• Experienced difficulties implementing business/functional

requirements

• Not all data elements captured in the source systems

• Encountered delays integrating spend reporting system

Will need to make modifications based on release of final

rule

IMPLEMENTATION EFFORT

Implementation Case Study

Implementation Case Study REQUIREMENT

As a result of a DPA a mid size medical device company

was required to implement a solution that would allow them

to manage all items related to HCP spend

• Intent of the requirement was provide controls and reports for all

elements across the spend reporting continuum

Without understanding business requirements or determining

required functions, executive management selected a

software solution to address DPA requirements

“Ready, Fire, Aim….” approach resulted in the following

gaps:

• Business Process was not identified

• Data requirements were not identified

• Users were not involved in the solution/software selection

Implementation Case Study SELECTED SOLUTION

After 1 year of attempting to implement the solution, the

manufacturer abandoned the effort to implement the

selected solution

Resulted in:

• Loss of confidence in attempted solution by the business users

• Loss of confidence by the Federal Monitors

• Significant budget overrun

Manufacturer revised approach

Implementation Case Study RESULTS

Determine

Requirements

Determine

Business

Process

Select

Software

Solution

Develop

Functional and

Technical

Specs

Implement Test and

Rollout

Approach for Implementing

Aggregate Spend Solutions

Implementing an Aggregate Spend Solution APPROACH

The “Ready, Fire, Aim…” approach usually results in missteps, missed

milestones, overspent budgets and missed requirements

A disciplined system development life cycle provides for the necessary

requirements, implementation and testing phases that help deliver an

appropriate solution

Understand the

“As-Is”

Environment

Determine

Requirements

for Desired

State

Determine

Gaps

Design

Solution Implement

Solution

Test and

Rollout

Implementing an Aggregate Spend Solution UNDERSTAND THE “AS-IS” ENVIRONMENT

Step 1: Assess Current Landscape

Document the “as-is” process for capturing all spend data across

the spend reporting continuum

Create an inventory of existing master data elements (i.e. HCP

master data, natures, purposes, product, etc.)

Create an inventory of systems to capture and manage HCP master

and spend data

Challenges

o Processes are not fully developed or integrated

o Different business units are involved and priorities differ

o Managing Uncertainty

o Organization may not be aware of all necessary reporting elements

Implementing an Aggregate Spend Solution DETERMINE REQUIREMENTS FOR DESIRED STATE

Step 2: Develop a functional vision for the “to-be” state

Develop process/work flow descriptions that describe/illustrate how the

“to-be” process should function

Identify all functional processes, regulatory requirements, work flow

requirements and interdepartmental dependencies

Identify required data elements to satisfy process, regulatory, work flow

and interdepartmental requirements

Identify technology touch points or system interactions throughout the

business process

Identify control points or items

Ensure an ability to produce required reports

Ensure an ability to produce an audit trail

Implementing an Aggregate Spend Solution DETERMINE REQUIREMENTS FOR DESIRED STATE

Step 2: Challenges

o Planning/Implementing for regulatory changes

– Requirements recently published in the Final Rule

o Data Collection beginning 1 August 2013

o Disclosures must be reported to CMS by March 31, 2014

o Data published for public on Sept 20, 2014

o 45-day “review and correction” period to ensure accuracy of disclosures

o 15-day post-review period

o Resistance to change

o Looking for technology solutions before completely identifying

desired processes, or functions or approaches

Implementing an Aggregate Spend Solution DETERMINE GAPS

Step 3: Identify gaps that exist between the existing

environment and desired “to-be” state

Determine gaps for:

‐ Business processes,

‐ Functional requirements, and

‐ Data elements

Identify root cause for gaps identified – not all gaps are system

related

Identify approach for closing identified gaps

Challenges

o Gaps in data collection can be result of gaps in policy or result from

business processes not being followed

Implementing an Aggregate Spend Solution DESIGN SOLUTION

Step 4: Design solution that will support the desired “to-be”

state

Determine system requirements that support business process,

functional requirements, regulatory requirements, workflow,

reporting requirements

Incorporate all design elements in a specification document

Select system components for the solution that satisfy functional

and business requirements

‐ Balance Processes with Technology

‐ Consider a Heterogeneous Solution

Implementing an Aggregate Spend Solution DESIGN SOLUTION

Step 4 Challenges

o Teams shift focus to technology features instead of satisfying

business requirements

o Ensure solution is scalable and can adapt to a changing business

and regulatory environment

o Balance solution design with what’s “doable”

‐ Budget

‐ Time

‐ Resources

‐ Regulatory requirements

‐ Mandatory Milestones

Implementing an Aggregate Spend Solution IMPLEMENT SOLUTION

Step 5: Implement design and prepare for process changes

Implement selected vendor solutions

Develop data extraction and load routines

Begin developing system and user acceptance test plans and

scripts

Ensure that implemented functionality developed is cross

referenced to functional requirements and is operational in

accordance with the specification

Implementing an Aggregate Spend Solution IMPLEMENT SOLUTION

Step 5: Challenges

o Business users want to change requirements during implementation

phase

‐ “Lock Down” requirements and minimize scope creep during the

implementation phase

o Not enough time is allocated to the implementation and unit test

phase

o Time for testing is usually the first area “squeezed” when other issues arise

and milestones aren’t adjusted

o Ensure sufficient unit testing is conducted by vendor and internal

resources

Implementing an Aggregate Spend Solution TEST AND ROLLOUT

Step 6: Conduct System Test and User Acceptance Test

(UAT) - Deploy Solution to the Production Environment

Conduct full end to end testing and ensure that all functions operate

as specified in the requirements documents

Ensure full participation by the User Community during UAT

Ensure proper training is conducting

Implement support infrastructure sufficient enough to address on

going business needs

Step 6 Challenges:

o Business users have other commitments

o Support infrastructure must be established before the solution is

deployed

Implementing an Aggregate Spend Solution PROJECT MANAGEMENT

Good project management is key to ensuring that the

solution implementation is successfully deployed on-time

and within budget

Ensure structure/procedures established to proactively manage:

– Project Schedule

– Project Budget

– Issues – technical, compliance and business

– Risk

Challenges

o Importance of assigning a skilled project manager full-time is

sometimes overlooked

o Project manager must have understanding of the subject matter,

compliance requirements and has IT PM skills

Sufficient number of project resources should be assigned, roles

clearly defined and oversight structure must be maintained

Implementing an Aggregate Spend Solution RESOURCES AND STAFFING

Role Responsibilities

Executive

Management/Steering

Committee

• Provide Executive leadership and guidance

• Resolve issues/ “sticking points”

Project Core Working Team/ IT,

Compliance and Business

Sponsors

• Overall responsibility for Quality Assurance

• Content expert subject matter, regulatory requirements, business functional

requirements, IT interactions

• Provide independent review of all deliverables generated by the project team

• Work closely with the project team to ensure total quality in all project activities

Project Manager • Manage day to day activities of the project team

• Lead and manage project activities and resolve issues

• Verify the completion of milestones and deliverables

• Work with the project team to develop project deliverables

Business Analysts

IT team

• Create all project deliverables

• Performs business, process, and data analysis

• Evaluate/assess technical and data components of solution architecture

• Complete application configuration

• Develop data analysis models

• Conduct system/integration tests

• Conduct UAT

Key Takeaways

Recap and Key Takeaways

Mistakes are made when companies select software

solutions prior to understanding the business needs,

processes and requirements.

• Avoid the “Ready, Fire, Aim…” approach at all costs

Implement solutions using a disciplined system development

life cycle

• Implementation cannot always be rushed to meet an established

milestone without introducing risk

Ensure that the project is staffed appropriately with enough

resources that have the necessary skill sets

Thank you!

Suj Patel

Director

sujpatel@huronconsultinggroup.com

312.833.2635

Mark Linver

Managing Director

mlinver@huronconsultinggroup.com

312.515.1677