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Case Study


McKesson Reels in Revenue with SAP BusinessObjects Solutions

by Dave Hannon | insiderPROFILES

January 1, 2013

McKesson Corp. collects and manages vast amounts of data every day. One business unit, McKesson Revenue Management Solutions (RMS), found a way to turn this data into actionable business intelligence (BI) for customers by using SAP BusinessObjects solutions to create a self-service BI solution that lets customers analyze their specific data.

Besides distributing about one-third of the medicines used daily in North America, the diverse healthcare business McKesson Corp. operates divisions providing healthcare IT solutions and outsourced back-office services. It’s difficult to imagine the vast amount of data the company collects and manages every day — information that is both generated internally and collected from its many customers, most of which are healthcare providers.

One McKesson business unit, the Revenue Management Solutions (RMS) division, found a way to turn that massive collection of data into actionable business intelligence (BI) for customers. By analyzing the collected data for trends, McKesson RMS also saw how it could improve its own business agility and better anticipate and react to changes. For the delivery mechanism, McKesson RMS selected SAP BusinessObjects solutions largely for the self-service capabilities that provide users with a feeling of ownership.

Casting the Net

McKesson’s RMS division is one of the largest providers of outsourced billing services in the US healthcare market, working with physician practices in every specialty. To provide its billing services, McKesson RMS collects a tremendous amount of data, mostly transactional, from its customers.

“We know how many charges these customers have made, how many patients each practice sees, how much money physicians are getting reimbursed, as well as how many and what types of procedures they are performing,” says Gabe Orthous, Director of Business Analytics and Product Management at McKesson RMS. “We know when these procedures are occurring, how much they cost, even how many adjustments are made in the payment process for each procedure. All of that information could help customers improve their business decisions if it was analyzed and viewed in the correct ways.”

 But most of the division’s customers don’t have the in-house expertise or processes in place to aggregate and analyze that data efficiently. So McKesson RMS saw an opportunity to develop a new product and service that could provide customers with detailed visibility into their businesses, allowing them to more easily answer critical questions like: Is now the right time to expand? Should we chase a specific contract with an insurance company? Are we getting paid in the most efficient and accurate way?

“From a business standpoint, we knew we could turn this into business intelligence to help doctors ensure they are solvent in their business, thus providing financial healthcare to their practices,” says Orthous.

Teach a Doctor to Fish…

The real IT challenge for McKesson RMS in developing this new customer-focused BI solution was to design a user interface that could access all of its back-end data and display the vital information in a format that healthcare professionals could easily digest. While the RMS division does not use SAP ERP on its back end, McKesson as a company largely runs SAP solutions in other parts of the business. So McKesson RMS chose to leverage SAP BusinessObjects solutions in developing the new product, McKesson Practice Focus™.

“SAP BusinessObjects Web Intelligence allows us to offer a self-service BI model to customers,” says Orthous, who co-authored a book on the solution.1 “Using McKesson Practice Focus, users can come into a secure portal and download more than 100 best-practice reports, or view their performance in areas such as denial codes or physician productivity in intuitive dashboards. In addition, users can change the reports if they want, so we’re not just creating and providing reports in a printed format.”

But the desire to make changes arises quickly after users get a taste of the standard reports. “The minute these customers start getting into that kind of data, they begin thinking about different ways of looking at it,” says Orthous. “SAP BusinessObjects solutions allow them to do that on their own. They can go in, change a report, and they can reuse that asset on an ongoing basis, which increases use. When you create and own a report, you use it more than if someone else creates it and forces you to use it.”

Testing the Waters

Because mobility is a big priority for physician practices and hospitals today, in late 2011, McKesson RMS began developing a mobile version of its McKesson Practice Focus product for iPads and iPhones.

McKesson RMS identified the top 10 SAP BusinessObjects Web Intelligence reports its users accessed and mobilized those first. From there, the division built a proof-of-concept solution and showed it to some customers for feedback. The mobile version of McKesson Practice Focus went live in January 2012. 

“We initially targeted our customers that were more familiar and experienced with McKesson Practice Focus for this product because the mobile version is mostly an extension of the web version of the product,” says Orthous. “But we’re starting to find out we need to concentrate more on business-specific processes than individual reports on mobile, because the way people consume content on a mobile device is different from how they consume it on the web.”

To that end, McKesson RMS is focusing on providing mobile users with small snippets of information or answers to specific business questions, rather than providing deep-dive analysis or reporting capabilities on the mobile device.

“You can’t create huge data cubes on a mobile device because you will run out of memory immediately,” Orthous explains. “You will still have to come back to the SAP  BusinessObjects-driven solution to create custom reports that enable data exploration.”

The Need for a Bigger Boat

Orthous says McKesson RMS is on the path to SAP BusinessObjects BI 4.0, and looks forward to the new capabilities it will bring to drive user adoption.

“We definitely see advantages of going to 4.0 because it streamlines the visibility of the tool and allows users to do more with dashboards on SAP BusinessObjects Web Intelligence reports,” says Orthous. “So that’s something we’re looking forward to. It has a much-improved charting engine and easier navigation, which is big for our users. It will also help increase our mobility options, especially in moving to the Android platform. We are planning our move to SAP BusinessObjects BI 4.0 as a way to help increase our adoption and provide more value to end users.”

“We definitely see advantages of going to SAP BusinessObjects BI 4.0 because it streamlines the visibility of the tool and allows users to do a lot more with dashboards on the SAP BusinessObjects Web Intelligence reports.”
Gabe Orthous, Director of Business Analytics and Product Management,
McKesson RMS

But the early indication is that the move to SAP BusinessObjects BI 4.0 will be more of a migration for McKesson than an upgrade. Orthous points out that with roughly 300 universes, 6,000 reports, and 1,000 SAP BusinessObjects users, making the transition to SAP BusinessObjects BI 4.0 will be a huge undertaking, given the sheer volume of data involved. After testing a more recent version, including an enhancement package that alleviated some prior concerns, Orthous says, “Now, we are addressing version 4.0 seriously because some of the previous issues we had have been solved.”

There are other areas of McKesson that have more experience with SAP BusinessObjects BI 4.0, and Orthous is talking with them as well. Because at the end of the day, while the business challenges may be different, the process for turning reams of data into actionable business intelligence is similar.

“I have worked in a variety of industries and realized that many of the challenges are universal — for example, distributing data, consuming data, and making the right decision at the right time with the right data,” Orthous says. “And the SAP BusinessObjects suite gives us a foundation and a framework to help provide a robust solution to our customers that they can feel proud to own.”

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