“We are no longer being asked ‘do I have this budgeted?’ or ‘is this in there?’ Instead, budget managers are asking for clarification about the value they’re getting from services, the effect demand has on specific areas of the budget, and the impact of adjustments we can make throughout the year. Apptio has helped us get back to financial analysis, which is where we longed to be.”
To help the organization better align budgets with project and operational demands, improve business unit engagement in planning, and address SaaSrelated shadow IT, CHRISTUS Health’s IT Finance team needed to streamline the planning process. Leveraging a 12-week window between budget cycles, the team was able to rapidly configure Apptio and train managers in the new system, eliminating inherent inefficiencies involved in data collection and improving visibility into IT spend. Today, the Information Management team at CHRISTUS Health is using Apptio to build stronger relationships with business units, supporting smarter spend strategies, and fostering increased accountability among budget owners.
CHRISTUS Health is an international faith-based, not-for-profit health system with a mission to take better care of people. As one of the largest Catholic health care systems in the U.S., comprised of more than 60 hospitals and long-term care facilities, 175 clinics and outpatient centers, and dozens of other health ventures, the organization is focused on driving advancements and innovations to improve patient care.
CHRISTUS Health was at a turning point. As the organization worked to transition from a decentralized to a centralized governance model, a key goal for the IT team was to increase transparency in the types of services business owners pay for. “Historically, it wasn’t the responsibility of each region to manage their IT costs and resources. As you can imagine, when you take a 150-year old organization and pull them together under one roof, it’s going to be painful,” says Bennetta Raby, TBM Systems Director within IT.
At the same time, Stephanie Rendon, Director of Finance for IT, was trying to keep up with the annual planning process. Her team struggled with a tedious manual process of pulling data from payroll, contract, and asset management repositories, creating multiple password-protected spreadsheets, and meeting face-to-face with CHRISTUS Health’s 35 diverse budget owners, group cost center owners, and the leadership team. Reviews and revisions were handled via email, where last minute notes and requests were difficult to track and sometimes missed. From start to finish, the planning process typically required 5-6 months.
Rendon reflects on what IT planning was like before. “I would jokingly refer to it as my second job. Because during that time of year, we were working ridiculous hours just trying to get all the spreadsheets together, making sure that we had all the management teams covered, and making sure we had everyone’s requests. It was a cumbersome process requiring an extraordinary amount of time.”
Faced with adding more staff and tooling at the IT Finance level to better manage departmental budgets or finding a way to shift more accountability to distributed budget owners to free up her team for better analysis and support, Rendon knew she needed a new approach. At the 2015 TBM Conference, she and her team saw a demonstration of Apptio and were immediately sold. “When we saw the software, we realized, not only was it simple enough for our IT finance team to use, it was simple enough for the budget owners we work with every day.” This insight into how managers could leverage the software to really own their budgeting process proved compelling and she was able to secure approval to purchase.
Rendon was determined to see an immediate ROI on her investment, so she gave the IT finance team 6 weeks to get the system up and running. They’d already missed the window for executive review for the new fiscal year, but there was still time to integrate the solution for departmental budgets that were due to the corporate finance team by early July. “We started in April and by mid-May we were up and running. We then worked quickly to make sure we had the software in the right departments and to provide training, because we needed manager input to meet our deadline.”
Using the organization’s most recent payroll reports, general ledger accounts, and cost transparency data, Rendon’s team was able to quickly open up Apptio to budget owners and provide training. Each manager was able to view their reports to verify data and make adjustments where needed. “With the new system, we immediately had an audit trail. We knew who agreed with the budget and who had kicked it back down to cost center owners for more information. When they sent it back, we knew we had agreement and were okay to move forward,” says Rendon.
Right away, the team achieved significant time savings. Once data sources were identified and applied, Rendon’s team no longer found itself dedicating days to soliciting information and sending out spreadsheets to share with managers. “We knew the solution would make our lives so much easier and it did. Not only did it eliminate the clerical tasks we usually had to do to prepare for the planning process, it also got the managers involved,” explains Rendon. “They don’t have to reference a financial statement in email, and they don’t have to wait for me to get back to them. So right away they save time too, which makes everyone happy.”
“We were seeing value as early as July when we were able to notify the managers that their budgets were ready for review. Twelve weeks after initial kick-off, it was a huge accomplishment for my team to have an application in place that cut down the email, version tracking, and changes that were once all-consuming.”
Apptio has changed the organization’s planning culture in other ways as well. Rendon reports, “In the past, we would generate each of the managers’ departmental financials in Excel, and it was always in an income statement format (i.e., cost centers and accounts). So if the manager wasn’t familiar with reading income statement formats, if they didn’t know where their software was, or if we had it categorized in a general ledger account they didn’t understand, we would have to sit with each manager to explain it to them.”
IT finance was relying on data from a corporate finance system oriented to hospital and healthcare budgeting. This system focused heavily on patient volumes, revenue, expense, and statistics related to areas that fluctuate with patient volume. In contrast, the IT budget primarily consists of operating expenses like infrastructure, labor, depreciation, and software contracts. “The integration of contracts within Apptio was essential for us. Now each manager helps us categorize contracts to the appropriate budget. And vendor managers can see where the budget varies from vendor agreements,” says Rendon.
The system’s graphs, charts, and dashboards offer a visual representation of the impact of certain expenditures in the budget, something budget owners didn’t have before. “We don’t have the manpower to create what Apptio already does easily with graphs, charts, and trends. We make a minor adjustment in Apptio now and we can crank it out in a matter of seconds. That’s something we just couldn’t do before.”
Rendon finds managers are able to use these visual narratives in their presentations to their staff and at team meetings, adding new value to budget discussions. “The software’s easy-to-use interface walks business owners through the budget in a way that helps them quickly zero in on discrepancies. It helps them to be actionable in a way our old planning and forecasting process didn’t.”
“One of the issues we’ve struggled with is communicating value from our IT department to the rest of the organization and our regional facilities,” says Rendon. “By helping our business units understand what’s flowing through their areas and expenses that are directly their responsibility, we’re enabling managers to be more accountable. Now they can see those impacts and communicate them to their teams. That’s not something I’m able to do because I’m not working with those folks every single day.”
One notable area of spending that has become obvious as a result of new, more transparent cost analysis is ungoverned software expenditures. “We have people here who go off to conferences, become exposed to new solutions, and get excited because they want to bring new solutions back to their department. And in some cases, they don’t feel they need to go through IT to acquire or implement the new product,” says Rendon. “The result is that we don’t necessarily understand what we’re paying for.”
Because IT finance is responsible for managing new subscription service agreements, SaaS contracts have become an indicator of shadow IT spend. As SaaS contracts are now captured in the budget, the IT team is better able to evaluate costs that were previously difficult to explain to executives, unaware of downstream impacts on the budget. Ensuring software works within the IT environment (the appropriate version of Internet Explorer, for example) and identifying how software purchases will impact next year’s budgets are important considerations the team can now explore with external groups.
“With subscriptions captured in the budget, it’s easier for us to ask questions about who has access to the data, what the security risks are, who’s managing the software, and who’s paying for it. And we get to track the costs over time. From a budgeting perspective, a security perspective, and a data perspective, we have a better understanding of what’s going on.”
– Stephanie Rendon, Director of Finance
There’s another concern for Rendon and team: security. CHRISTUS Health, like other healthcare organizations, has made significant investments over the past few years to strengthen security to reduce vulnerabilities in data entry and exit points into the organization. With more than 1,200 applications in play corporate wide, SaaS is an ongoing focus for risk management
The end game isn’t all about command and control. Bringing the budgets together under one centralized model is helping the IT team understand where the business is increasingly buying software outside of IT. This insight, coupled with new, data-driven facts, may help the team find new ways to add value, bridging old gaps between perception and the reality of what IT can deliver.
In 2015, Raby’s TBM team implemented Apptio to combine IT management data with actuals from the corporate general ledger. This has enabled the IT team to assign a dollar value to nine major service categories specific to IT: clinical process automation, technology access, business systems, enterprise infrastructure, business intelligence, security, customer services, revenue cycle systems, and workplace support.
That information is now used to create rolling forecasts that will be shared with the managers who need to see and help adjust it.
“Now, instead of sending our managers Excel reports, they’re seeing their results in Apptio, by department. They are able to help us with the forecasting, which is something they are excited about because they have the opportunity to impact their budgets and still help us reach our targets.”
Conversely, budget information is being used to help manage technology fees and allocations within the IT group. “The value of Apptio is realized even further as we work with the TBM team to improve our cost pool classifications. Each month we realize value when we are better able to classify costs and get them in the appropriate departments.”
As Rendon contemplates the future of IT planning at CHRISTUS Health, she’s focused on improving processes that help build stronger relationships with budget owners who have responsibility for key areas of the budget. Apptio provides a foundation around which to bring the team together for conversations that are action-oriented.
“What I really like about Apptio is the ability to compare budgets and forecasts. If we want to compare an increase between the prior year’s budget and this year’s budget, we can easily do it. If we want to contrast the new fiscal year budget and the way the current year is trending, we can do that as well, and we can explain those differences.”
Importantly, Rendon now has the business-friendly views managers need in order to evaluate trends in infrastructure, software, and service spend. With contract, asset, and staffing data attributed to service categories in Apptio, the team is in a much better position to understand TCO and influence strategic decisionmaking that impacts the organization’s ability to drive innovation.
“I’m excited about coming back in January and February because planning should be an easier process. It should take less time because we already have the data at our fingertips and it will be easier for us to see what’s in the budget and what’s driving increases. And now we will be adjusting our forecasts and budgets on an ongoing basis right up to the next planning cycle.”
The IT finance team is even more excited to articulate to CHRISTUS Health’s senior leadership team the dollar value of savings from reallocating budget variances. One of the first budget shifts Rendon made as a result of using Apptio was the funding of extra consulting and contract labor needed for a key EMR application upgrade. Because her team identified inadequate budget for the project in August, she was able to reallocate from other departments that were under budget in July.
“We know we’ve been optimizing our costs, but Apptio is now able to show us how and where we are doing this efficiently,” Rendon reflects. “Initially, we invested in Apptio for the huge time savings we knew we’d achieve. But it has also changed the conversations we’re having with the business and fostered better, more collaborative relationships with budget owners.”
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