BPM: What does American Healthways do?

American Healthways is a rapidly growing business that recently purchased an Oracle ERP system. It bought all of the Oracle modules except budgeting and forecasting. For that, it turned to hosted software from Adaptive Planning. Michael Gonzales, American Healthways' director of financial planning and analysis (FP&A), headed up the software selection process. He explained to BPM why his organization chose to go with a smaller software vendor to fulfill its financial planning needs.

Michael Gonzales: American Healthways is a disease management company. We partner with health plans to both improve the quality of health care and reduce medical costs by offering a suite of care enhancement products for health plan members with chronic diseases. We identify which members have diabetes, coronary artery disease, asthma, COPD, cancer, and various other diseases, and our clinicians work with these patients to effect behavior modification so they learn how to effectively manage and control their disease. The ultimate goal is to improve health and prevent a high-cost episode where a member might get admitted to the hospital.

BPM: Why did you shop for a new budgeting and forecasting system?

Gonzales: American Healthways has experienced rapid growth over the past several years. Couple this with the fact that the disease management industry is still in its infancy, our accounting structure is not scalable, and our revenue recognition model is extremely complicated, and you can see why Excel was not a scalable solution. We were shopping for a new general ledger system (which we decided would be Oracle) to support our growth, and while we were looking at G/L systems, we were also actively looking for budgeting and forecasting packages.

BPM: What were you looking for in a BPM application?

Gonzales: With our current structure, we have about six people at corporate that work on the financial planning, forecasting, budgeting, and analysis. In the future -- hopefully next year sometime -- we would like to have department heads, P&L and process owners, work on and own their budgets and forecasts. Our function will mainly be top-level consolidation, analysis of the numbers, and (as needed) financial and analytical support -- rather than inputting data, checking formulas, linking spreadsheets, and other manual tasks created by our current Excel model.

Eventually, we will have many, many, many process and P&L owners. We understood that we needed to have a simple, easy-to-use Web interface that lets them simply pull open a Web page, see their budgets and forecasts, adjust them, and run reports -- and be able to do it without a whole lot of training. Being in health care, a lot of our department heads don't have a financial background, or even a systems background, but rather a clinical background. They're nurses, some are doctors, and some are nutritionists. They need something that's a little bit more user-friendly, intuitive, and easier to work with than typical budgeting software tools.