Data Analytics
Do Indian CFOs Use Financial Decision Support Tools How owners, boards and managements at healthcare service providers like hospitals and diagnostic chains can leverage data analytics to improve cash flow and profitability to technology-driven analytics is highly democratised and more readily available and deployable than you think • Analytics is not expensive. You can expect a Return of Investment (RoI) range between 3X and 12X within 12 months i.e. Analytics projects pay for themselves, usually within the first 12 months Bhavik Desai, Engagement Partner and Healthcare Sector Champion
Analytics is not an ‘Accounting’ or ‘Finance’ project. • It is a business performance improvement initiative, that might be driven by the CFO, but needs to be co-owned by all functions, including clinical, marketing, support teams etc Analytics is not outcomes alone.
S Venkat, Founder, Practus Analytics projects deliver between 3X and 12X Return on Investment and improve net margins between 2 per cent-8 per cent. Analytics are the ‘GPS’ that Healthcare CXOs use to measure and monitor performance, navigate their business, take corrective actions and most importantly improve predictability about the future of their enterprises.
Let's first bust some myths! • Analytics is not just for larger, more ‘sophisticated’ companies. Access
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• Cashflow, profitability etc are only outcomes. It is critical to measure the drivers of the business (called ‘lead indicators’) like footfall, customer return rates, Average Length of Stay etc
Do you need analytics? Regardless of what the age, maturity, size, spread and nature of your business is, you need to know • • • •
whether you are generating cash flow or not, whether the Return on Capital employed is adequate or not, where and how your profits are being generated, where the revenue leakages are etc.
In other words, in today’s dynamic
business world, the pilot (you) need the dashboards in your cockpit (analytics) for the plane (your enterprise) to navigate the skies (business environment) successfully.
When is analytics useful? The point of analytics is that it is real time. If underlying data entry is timely and accurate, real-time analytics can help you pick up deviations from plans faster, red flags quicker and therefore quicker pivoting of corrective actions. The days of seeing MIS at the end of the month are long gone; you (and more importantly your teams) need to know what’s happening in your business now.
How does analytics help you? The objective of analytics is not ‘data for the sake of data’ but to aggressively drive cost reductions and cash flow improvements in the business. If done well, you should expect your analytics project to drive between 2 per cent-8 per cent improvement in net margins and between 10-40 days improvement in cash flow, from the reduction in working capital (Days Sales + Days Inventory) In a healthcare services context, here are some examples of what you can do with analytics • Comparison between metrics of two locations (say two different centres of a diagnostic chain), helps in benchmarking of best practices. The root cause of why
