Challenge

Northside is one of the largest integrated health systems in Georgia. Through inorganic and organic means, Northside has experienced dramatic growth over the last few years, especially in outpatient operations which have now reached well over 200 locations throughout the state. During this period of dramatic growth, Northside’s Supply Chain department focused on optimizing the cost structure for direct spend categories such as medical/surgical supplies, implants and capital. With this in mind, Northside identified several indirect categories to leverage outside expertise and avoid the prohibitive cost of building and maintaining those skills internally. The Northside Leadership Team turned to Accenture to assess these indirect spend categories and identify potential savings.

As part of Northside Hospital’s transformation of its Supply Chain and Procurement operations, the health system engaged Accenture to identify potential savings across certain indirect spend categories—telecommunications and energy. Accenture leveraged the unique assets of its Procurement Services division to benchmark, quantify, develop and implement a plan for realizing more than $5 million in annual savings.

Strategy and Solution

Northside experienced rapid organizational growth coupled with a more complex infrastructure which provided an opportunity to review several indirect spend categories. Due to prior successes with supply-chain improvement projects, Northside turned to Accenture for assistance in managing indirect spend categories that had the potential for significant sustainable savings.

The project team’s focus began with sourcing and procurement in two key areas: energy and telecommunications. To touch on the complexity involved in this project, for every entity with an electric meter, a monthly bill is generated. Northside had approximately 300 energy accounts to manage across scores of facilities and expenses covered thousands of wired lines, as well as high-speed data, fax and mobile-phone services. Accenture read each line item of approximately 200 accounts, reconciled the accuracy of each line against the appropriate Northside contract charge, and then dispositioned it for charge back purposes to nearly two thousand Northside department codes.

"Selecting Accenture to manage several indirect spend categories allowed our supply chain organization to focus on our core competencies during a period of rapid growth. Effective leveraging of internal and third party resources and expertise has provided the proper balance for yielding optimal savings across the system."

– CARL WALLER, Vice President – Supply Chain

Dramatically Improving Purchasing Processes

The project team's focus began with sourcing and procurement in two key areas: energy and telecommunications. The team implemented the following strategy and procedures:

"Accenture had the category expertise, data analytics and the advanced methods essential for enabling Northside to save millions of dollars on utilities and telecom."

– CARL WALLER, Vice President – Supply Chain

Visibility

Online billing portals were set up to improve visibility into detailed account information.

Benchmarks

A proprietary benchmark database was utilized to compare costs and vendor performance.

Digital processes

Processes were migrated from paper to digital enabling faster analysis of aggregated expenditures.

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Transformation

The managed services approach is helping Northside stay within contractual terms to achieve its desired savings. Accenture continues to monitor trends in the energy and telecommunications categories so that once acquisitions are integrated into the growing organization, they will also benefit.

Positive Results

Accenture’s managed services approach dramatically transformed operations for the portfolio of Northside service providers in energy and telecommunications. The project team negotiated refunds and more favorable contractual terms for Northside.

$800K

Telecom: One-time refunds of $800,000 and $3 million in ongoing savings annually.

$400K

Energy: Quick-hit refunds of approximately $400,000 and identification of $1 million in ongoing savings.

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