Financial Systems Integration Executing the Strategy Pam Mc

Financial Systems Integration Executing the Strategy Pam Mc. Gregor Toni Cobb Jeff Mayo Carol Praplaski June 14, 2002

Agenda • About NDCHealth • Financial Systems Strategy • Phased Delivery Approach • Implementation Accomplishments and Challenges: • Accounts Receivable • Order Management • Project Accounting • i. Time & i. Expense

About NDCHealth § NDCHealth has been providing integrated information support to all segments of the health industry for over two decades. This experience, leveraged with our powerful network and information management capabilities, has built our reputation as a premier provider of value-added information services serving more segments of the healthcare industry than any other similar company.

About NDCHealth Technology and Resources § Intelligent network processes over 2 billion real-time health care transactions annually, peak rate of 650 transactions/second § Connected to over 4, 000 payer plans § 39% of nation’s hospitals > 400 beds, about 1, 200 hospitals § 90% of nation’s pharmacies, about 50, 000 pharmacies § > 150, 000 physicians § 25 terabyte Oracle database for the pharmaceutical industry, over 100 pharmaceutical manufacturers § Over 3. 5 billion prescriptions on file

NDCHealth’s Financial Systems Strategy “Create integrated financial information system effectively supporting company goals and objectives” - 1999

Gradual Execution of Strategy

Billing Implementation Quick Wins · Improved cash flow through a centralized automated billing and AR system · Global reporting · Centralized processing · Fewer lockboxes · Timely and accurate recording of AR transactions · One global customer master file utilized company wide · Natural Integration between Oracle subsystems (AR, OM, PA and GL) · Improved customer AR account status information provided by on-line inquiry to record all customer issues · Online collection activity comments with automatic follow-up notification · Automated, real-time credit card payment method utilizing

Implementation Accomplishments & Challenges • Accounts Receivable • Order Management • Project Billing / Project Costing • i. Time & i. Expense

Accounts Receivable § Business Drivers § § § Antiquated and non-integrated financial systems Standalone billing/AR systems Lack of Customer Master Lack of management information – Consolidated DSO Analysis Desire for centralized shared services Desire for improved cash flow through automated, centralized processes § High cost of manual and duplicate processes § Billing § Customer Maintenance

Accounts Receivable § Converted data – from multiple systems: § Customers § Open Balances for Customers § Customer Bank Information § Items § Installed Customizations/Interfaces § Credit Card process using 3 rd party tool - Auth. net § AR Open Balances to HP 3000 to keep opening balance on invoices generated in HP 3000 § AR Customer Update to HP 3000 to keep new/modified customers in sync in both systems § HP Items to Oracle Interface - as new service codes are added in HP 3000 automated way to bring data into Oracle

Accounts Receivable § Challenges: § Reporting by individual Business Unit in a single organization environment § Customer data review and cleansing needs to happen in a controlled timely manner by end users most familiar with data § Same customers with multiple bill-to and ship-to’s in several legacy systems § Determining naming convention and data entry standards § Creating a shared services environment at same time we were implementing new applications

Order Management § Business Drivers § Lack of integrated order management system into Oracle Financials § Lack of easily obtained OM information § Need for improved management information

Order Management § Converted Data § Price Lists § Customers in conjunction with AR § Inventory items § Customizations § Freight calculation for orders based on ship-from and ship-to zip codes, using UPS rate table information. § Shipping UPS interface that will request, generate and print UPS shipping labels, using UPS web interface and custom NDC code. § Order fulfillment sets assignment. Automatically set all order lines to an order fulfillment set to insure discounts and service items invoice together with shippable items, especially since most sales are paid with credit cards. § Credit card authorization customization using Auth. net web interface.

Order Management § Challenges § Existing Oracle Inventory lacked item categories § Data cleansing § Functional involvement

Project Accounting § Business Drivers § A need for a centralized, automated, integrated capital expense tracking system § A need for a centralized, integrated customer billing system

Project Accounting § Data Converted § Projects – contract & capital § Project costs and revenue § AR contact § Customizations – Event Spawning – Ability to automatically create events on a weekly, monthly, or quarterly basis – Additional Invoice Information – Customized the PRC: INTERFACE INVOICE TO RECEIVABLES program to include descriptive flex field, and product information. – Created Custom Invoice Printing using Optio. – Custom Tax Program to accommodate multiple taxing jurisdictions by project – Created interface to load external expenditures.

Project Accounting • Challenges § Project “Name” data was not unique in legacy system and exceeded field length, had to clean data § Agreement on Auto Accounting setup § Determining standardized burdening rates

i. Time & i. Expense • Business Drivers § Eliminate paper driven system § Lack of standardized labor collection process § Enforce business policy § Eliminate manual processes

i. Time & i. Expense • Implementation § Interfaces/Customizations § Created interface between non-Oracle HR/Payroll system for employee add/update/terminations § Automated “User” maintenance for new employees § Created custom workflows for Approvals § Use of Email Alerts § Notifications § Missing Timecards § System Administration

i. Time & i. Expense • Challenges § Routing driven off HR supervisor – ensure data accuracy prior to deployment § Develop process to update HR supervisor to avoid document routing problems § Develop a realistic expense report approval hierarchy § Adequately staff a “Help Desk” to answer user questions § Be prepared for quirky PC desktop problems due various browser versions and other desktop PC configurations

Centralization During Implementation § Challenges § Centralization of processes & procedures § New players have much to learn § Old players lose interest in project § Mitigate Risk to Project Success § Excessive training § Facilitate knowledge transfer sessions between old and new players § Hold a post go-live “pass the torch” meeting between project team and users § Hold regular “lessons learned” meetings after each month-end close § Don’t accept excuses from new players

Implementation Recommendations § Data Conversion: § Determine naming conventions early on in the project § Provide enough time for data cleansing § Perform Static Conversions 1 month prior to go-live and ensure totals in legacy systems match totals converted in Oracle § Resources: § Secure upper management support § Identify the most knowledgeable, internal functional staff for the project and dedicate them for the project’s duration § Testing: § Identify all business scenarios and fully test. § Perform at least two full integration tests.

Implementation Recommendations § Training: § Complete Policies and Procedures for new business processes prior to go-live § Implement Help Desk Support/Procedures for Oracle Applications § Complete end-user training 1 -2 weeks prior to go-live § Leverage the Train-the-Trainer approach. § Keep legacy system query capabilities available for 3 -6 months after production § Freeze application setups 1 month prior to go-live § Prior to go-live, put process in place to address requests for new requirements and related enhancements § Determine Key Success Factors prior to project start-up and evaluate 3 to 6 months after implementation

Questions?