impact story

Switch to Dynamic Planning Reduces Annual Budget Cycle by 75%

Labor Intensive Planning Cycle & Outdated Budgets

For many health systems, the annual budgeting cycle spans over six months and requires thousands of hours from leadership, yet produces a budget that is outdated within months. Then, throughout the fiscal year, even with a strong flex-budget, leaders continue to have to explain why performance is not tracking to budget. With a continuously shifting environment, not to mention the need for cost reduction, a traditional budget process and of focus on budget variance is too labor intensive and provides too little business value.

A large multi-hospital health system in the Midwest experienced just this. The system spent at least 8-10 weeks every year in their annual budget cycle. Each year, the process was stressful and time-consuming. They sought to produce a balanced budget that would project performance accurately for the next fiscal year. However, despite the thousands of hours, the budget was typically out of date within the first quarter. Managers continued to spend time explaining why they were not hitting budget rather than making course corrections to adjust to changing market dynamics.

This organization drove results and impact

20,000 hours of leadership time freed up

75% reduction in time spent on the budget

$1M saved on overall budgeting efforts

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