While conducting research for our Aged Care Solution (“An Integrated Performance Management Solution for Aged Care providers”) by attending industry briefings, competitor briefings and conferences, we have uncovered that the Aged Care industry is rapidly changing and facing a number of challenges, including increasing costs, regulation, competition and consolidation within the market place.
Chartered Accountants, Stewart Brown have been holding briefing sessions across the country, outlining their benchmarking results in the Aged Care Financial Performance Survey 2014.
From this report, it is clear that the costs associated with running an Aged Care facility are rapidly rising, and although income is also rising, it’s not at the same rate as the costs (see slides 8 & 9). It is no coincidence that the higher performing Aged Care facilities have identified financial performance management (KPI’s such as performance by facility level and care wages as a percentage of income) as a key focus area to drive their strategic direction (slide 43) and build sustainable competitive advantage.
The conclusion Stewart Brown offers is that the industry now faces a choice; stay the course and hope it all works out, or innovate with additional services.
One of the other major trends in the Aged Care industry is consolidation. You can read more about this on corrs.com.au, but to summarise; major players in the market are going to need to build scale through expansion, and to do so, they will be looking to acquire smaller facilities. What stands from both of these industry needs is that the once-a-year annual budget cycle is not going to cut it.
Many organisations to this day are still tied to the painful and inefficient annual budget, and hold everyone accountable to it. There is a good write up on cfo.com about why this should be considered bad practice:
With the observed Aged Care industry trends towards innovation, cost containment and consolidation, the annual budget becomes static, and not able to provide timely analysis. As a CFO, a better practice will be to ensure that you have a rolling forecast capability combined with ‘What-if’ analysis.
It’s interesting that most of our technology competitors seems satisfied with just offering the ‘Annual Budget’ solution to the Aged Care industry, but at Tridant we believe you need a Scenario Modeling solution. You need to be able to plan, not just for 12 months, but a rolling 12-24 months.
This rolling effect ensures that your budget is compiled for you without much effort. You can enable a performance management culture within your organisation with an agile approach to planning. Our solution is designed to be a rolling forecast out-of-the-box, and we have identified the key drivers you need to steer your organisation finances without getting bogged down in the detail.
Our ‘In Memory’ technology ensures that you will be able to model multiple versions of your forecast at the same time. Compare the best case version with the worst case, or maybe model what things will look like, by acquiring another business. It’s data driving decision making.
So don’t delay, innovate today and change your performance management with Tridant’s Solution for Aged Care.