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Improving Forecast

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Stan Hunt says implementing new budgeting and financial reporting software at Triad Hospitals Inc. means some 53 hospital chief financial officers are getting a better night's sleep and getting to know their families again. Hunt, the director of operations and finance at Plano, Texas-based Triad, made the decision in 2004 to replace 20-year-old budgeting and financial reporting software the company had inherited when it was spun out of Nashville-based HCA Inc. in 1999. Six years of using a Microsoft Excel-based financial system that can't do much on its own adds up to a lot of missed soccer games and recitals, Hunt says. "Our CFOs were working past midnight and on Saturdays and Sundays."Hunt's new budgeting software from San Jose, Calif.-based Business Objects Inc. allows Triad's hospital CFOs to get some much-needed family time. The new software allows Triad to generate transactional reports that show where the individual hospital's numbers measure up compared to the others and the prior year's forecast. The system also lets CFOs do budgeting and projections by changing variables that then cascade throughout the system, giving them the opportunity to quickly measure how small changes affect the big picture, Hunt says.Older financial systems like the one Triad was using, Hunt says, were not designed to do planning-a key element in Triad's annual budgeting and forecasting exercise. Such software collects and stores data but can't leverage relationships in the data to do a forecast. Now that Triad and many other hospitals and systems are gravitating away from the hospital-only strategy of operating in the healthcare space, such systems become almost dangerously outdated, says Hunt. "The software we had before only applied to the hospitals," Hunt says. "This [new software] applies to the surgery centers, physician services and other lines of business and can be customized where each business line has its own template." For example, now operations can be broken down into service lines, not just by business entity. Additionally, all the information is now stored on the same servers and data systems, allowing CFOs to generate reports based on last year's numbers and projections for an endless number of potential scenarios for planning purposes.Thanks to that capability, says Hunt, "we can start budgeting later in the year than we used to." Hunt's deputies still have to finish next year's budget by November, but they can now wait to start until they have actual data through August of the preceding year-projecting only the last four months of the year, not five. -Philip Betbeze