Client Story

Innovation for a healthier future

KPMG Powered Enterprise helped a leading pediatric hospital achieve 10:1 return on broad business transformation in the cloud.

Joseph Parente

Joseph Parente

Principal, Advisory, KPMG US

+1 267-256-2950

Client
A leading U.S. pediatric hospital
Sector
Healthcare
Project
Broad business transformation with KPMG Powered Enterprise
  • Client challenge
  • Benefits to client
  • Approach
  • KPMG insights

Client challenge

Long known as the birthplace for countless breakthroughs and dramatic firsts in pediatric medicine, this leading U.S. pediatric hospital wanted its business processes and systems to match the world-class quality of its clinical delivery. Facing radical changes in the way healthcare and treatment are measured and reimbursed, the hospital needed to put in place a foundation that would ensure its growth in the challenging years ahead. Wanting its back-office processes to match its patient-focused success, the hospital turned to KPMG to help optimize its business and reduce costs long term so it could continue to expand and care for society’s youngest and most fragile patients.

Benefits to client

Such a broad transformation—encompassing HR, finance, payroll, supply chain, procurement, and IT—enables the hospital to realize tangible benefits across the organization:

  • Finance: Utilizing data analytics tools including practice based P&Ls and balance sheets, physician-based reporting, and the creation of dashboards, we were able to help the hospital integrate three separate finance organizations into common processes and aligned governance. We helped reduce 2,000+ natural accounts by over 80 percent, enhancing the user experience through greater simplicity, providing greater flexibility in reporting, and reducing system maintenance overhead.
  • Supply chain: Targeting $25+ million in savings over three years, from operating model transformation, centralization of sourcing and improved spend visibility/management.
  • HR: Employee and Manager Self Service through Workday, combined with service center implementation, is lowering the cost per case.
  • Implemented a foundational data model governance process enabling Workday optimization, while maintaining controls and segregation of duties.
  • Revenue optimization has generated a 10:1 ROI, with more than $20 million in annual savings in just over six months and will fund the Workday transformation.

Approach

Recognized as one of the preeminent children’s hospitals in the United States and around the world, this pediatric healthcare provider delivers the highest-caliber clinical care and research while helping prevent and cure childhood diseases. Facing increased administrative, regulatory, and reimbursement challenges, the hospital needed to be ready for the future.

When we first began working with the hospital we were asked to help the hospital select the vendors for its cloud transformation. The hospital ultimately chose Workday for its full suite of back-office cloud applications, Coupa for procurement spend management, the ServiceNow platform for Human Resources (HR) and Information Technology (IT) help desks, and Strata for analytics.

The hospital then asked for our help in creating a future-state target operating model that addressed service delivery, organization structure, end-to-end business processes, supporting technology, and improved reporting visibility. In addition, we conducted change management workshops to align executives across functions to support the new model.

Especially important for an organization that wanted to take its performance to the next level, we offered the KPMG Powered Enterprise enabled by Workday solution, which contains leading practices on how to implement cloud systems and achieve the client’s business outcomes. This implementation approach reduced risk and delivered outcomes for faster ROI.

After a year of working with the organization, coupled with extensive experience with Workday, Coupa, and ServiceNow, we had a deep understanding of its operations and issues, and the impact that a cloud transformation could cause. This made us the natural choice to implement the target operating model and service organization realignment.

Now that the full cloud transformation strategy has been implemented, the hospital is well positioned to continue fulfilling its most important mission—providing the best care for kids—while ensuring its economic health, growing its clinical programs, and building on its reputation for clinical innovation and operational excellence.

KPMG insights

Transformation should be business driven and technology enabled to realize all the benefits

With so much technology being implemented, it is easy to forget that technology is only an enabler. However, business needs are driving the change, which means the benefits must be business driven as well.

Organizations must adopt a more agile implementation approach

Implementation rarely proceeds seamlessly from one phase to the next. It is an iterative process that requires an agile mind-set, just as the software itself is developed in an agile manner and continually reassessed and adapted. In a similar way, decisions must be made without the benefit of a linear, sequential approach.

This client's transformation spanned HR, finance, payroll, supply chain, procurement, and IT. In just over six months, the annual savings rate exceeded $20 million.