East Kent Hospitals: Benefits of using Agresso ERP
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East Kent hospitals operate three District general hospitals and two smaller hospitals in East Kent. They offer some leading edge services and use Agresso to enhance the financial reporting programme. The East Kent Finance Consortium or shared service has been on place since 2002. In this interview Mike Deal, Corporate Finance Manager, East Kent NHS Finance Consortium explains the benefits of using the Agresso ERP platform through Unit 4, which has been tailored and adjusted to suit their particular needs.
SSON: Can you give us an overview of the work carried out at East Kent NHS Finance Consortium, and outline the services you provide?
Mike Deal: The Finance Consortium basically is a transaction processing organisation, in the main. We look after the management of the payments, accounts payable function, and the accounts receivable function. We’re also involved in system management for the East Kent Trusts, for the East Kent Hospitals Trust, and for the Eastern and Coastal Kent Primary Care Trust. We manage the Agresso system which, both of those organisations use, on their behalf and we’re also involved with provision of technical accounting services, capital accounting and some remnants of management accounting, particularly in relation to the Primary Care Trusts. And personally I get involved with interfacing from external systems as well, like payroll and the supplies system that we have. So, we provide a broad range of functions which enable the two clients that we serve to produce their monthly accounts, their budget statements that go out to their managers, and also we help them to produce their statutory annual accounts, although the responsibility for the actual completion of those is theirs, but we play a large part in contributing to their financial well-being.
SSON: Can you break down the services you’re providing that currently utilise Agresso?
MD: The two parts of Agresso that we use are Agresso Financials and Agresso Logistics. We don’t use Project and we don’t use Human Resources and Payrolls, because we’re tied into the national electronic staff records for payroll. We’re not involved with payroll either; that’s provided by a separate shared service in East Kent. So, within Agresso Financials, we use accounts payable, accounts receivable, fixed assets and within Logistics we use the full procurement module. We have work flows set up for requisitioning - we’ve now got electronic requisitioning in place across the whole of East Kent, and we’ve now got around 2,500 Agresso users set up in Kent. We also have users in Maidstone and Chatham and various other places. So, we use a broad range of the Agresso products.
SSON: What benefits are you getting from using the Agresso ERP system?
MD: Because we’ve got a locally controlled system, certainly the Agresso system is at least as good as anything else out there on the market. But, I think if you were to ask our clients, the major advantage that we have is that it’s a locally controlled and tailorable situation that can be adjusted to suit their particular needs.
One of the biggest needs in the NHS is the continual organisational upheaval that takes place, the flexibility that Agresso has given us over the last ten years to adjust to all the various organisational changes that have occurred from the move from Primary Care Group into Primary Care Trust, and the creation of Foundation Trusts. We’ve been able to adapt to change because we’ve been using the Agresso system and we’ve got local control over it. We can sit down with the clients and establish what their needs are, and work together with them to actually develop the system in their best interests.
SSON: Since the initiation of the East Kent NHS Finance Consortium, around 2002, how has Agresso brought value to your organisation?
MD: Personally I think the biggest area of value that Agresso brings is its reporting and enquiring facilities. If an organisation is able to maximise those then that’s really where I really think Agresso scores. The flexibility and the potential for all the reporting and enquiry tools that Agresso offers, is really to me, the biggest selling point of the whole system.
SSON: I believe there was an option for you to join the National Shared Business Services (SBS) in 2005 - how did you make the decision to stay on Agresso rather than move toward the National Shared Services?
MD: It wasn’t really an option. It was one of those political things at regional health level, where somebody signed up that the whole of Kent, Surrey, Sussex were going to move over to SBS. Certain people decided that they didn’t necessarily want to do that including some people in East Kent.
At one point it looked as if they were going to be forced to, but basically what happened was that the PCT in particular reviewed the decision, sat down with their staff and also with us, and decided that they would actually prefer to stay with Agresso rather than move to a national shared service type situation. They wanted to have a more local, tailorable shared service, which they felt they would have more of an input into.
Obviously, because we’re a lot smaller and because we’re only covering a certain geographical area, and considering the people that work for the Consortium have all worked for the NHS for a long time; they’ve all got a sort of affinity with the East Kent NHS, I think it was decided that it would be better, preferential, to stay with a local service where we could work as a partnership. We sit down with the clients and together we try and work out the best way to actually make our shared service, which is pretty small but pretty unique.
SSON: You’ve obviously highlighted the business case for the decision that was made; as costs are cut and more value is added to East Kent NHS, do you think pressure will mount to join the national shared services for the NHS?
MD: We have actually been looking at this recently because the Agresso contract is coming up for renewal at the end of March 2011. When we considered the supposed cost benefits of moving to SBS, they were never proven. The costs estimates that we were given didn’t stack up when they were looked at in much more detail, and as a result of that the clients are quite keen to stick with Agresso and develop it further.
Over the last couple of years they’ve made a big investment in Agresso in moving to 5.5 and also in the move to develop work flow and electronic procurements across, 2,500 users across East Kent. So we’ve done a massive project here to actually develop the use of the Agresso system, upgrade to the latest version, and to expand its use. And we’ve expanded also, we’ve developed the invoice scanning so everybody can now see images of the invoices on the screen, and that’s a massive benefit to all users. Other benefits are the ability to see the work flow maps so that we can track transactions in the system. We know exactly where any transaction is at any one point in time; whether it’s stuck with a certain person for approval – all of that is now available to, not just users in finance, but users outside of finance now and the challenge really is to take that on and develop things even further.
SSON: I think you’ve highlighted a lot of the benefits of staying at the localised shared services level. What stands out?
MD: I think its flexibility and tailorability. Along those lines; its partnership working with the local clients and it’s making a system that is designed to work for their benefit; it’s not being run from the point of view of the shared service. Our difficulty comes in that we try and keep the bills as simple as possible and as standard as possible but because we want to be flexible for the client, we do things differently for the Hospitals Trust than we do for the PCT. And that obviously makes it a little bit more difficult for the Finance Consortium as an organisation. But at the end of the day, the clients are actually getting what they want.
And what they want is a system that can be adjusted, adapted to suit the ever-changing demands that are placed on them. And that’s where we’re able to work with them; we understand what their needs are, we’re actually sitting amongst them, and basically they know that if they need advice on anything they can ring up a named person, they can come and see us, they can come and talk to us face to face, and we can develop things together.
SSON: How did Agresso support change when extending services - saving you costs and causing little disruption to services in the financial department?
MD: We’ve had a very good working relationship with Agresso over the years. We’re part of the health careuser group; in fact, for my sins, I was chosen to be the national lead, as it were, for the healthcare group. We have healthcare get togethers, and we talk to one another via email and Yahoo groups and so forth, so we play a large part in communicating with other NHS users. But we’ve always worked very closely with Agresso; they’ve always held us up as one of their sort of flagship users, and they were very keen to work with us to move to 5.5. We were able to take advantage of the memorandum of understanding, and obtain an unlimited site licence to help us with the development and rolling out of 5.5 across the organisation. They provided, obviously, some consultancy to assist us with the move to 5.5, and they were also available to us if we needed help with the development of work flow and electronic procurement, and so forth. But we did have to engage external consultancies to help with that because it is a massive project to roll out requisitioning across two organisations as geographically and organisationally diverse as the two that we serve. They’ve always been there in the background; they’re always very keen to support us, because they want to see us succeed.
SSON: The NHS sector will face tough times over the next few years following the recession and obviously the change in government as budgets will be cut, but how do you think this will impact East Kent and what provisions have been put in place to combat these challenges?
MD: We’ve already had challenges of that nature locally with the Finance Consortium. For this coming financial year, this year 10/11; we’ve already been asked by the clients to cut their costs by five percent in the first year, which we’ve done. We’ve also, in effect, cut and had to find savings of around eight percent because they’ve not given us the additional resource for the national pay award and what we call pay incremental drift. So we’ve had to find savings within the Consortium already, and my guess is that we will be asked to find further savings in line with other management costs targets that are being mentioned. So, the challenge will be to try and work with the client to try and find better ways of using the Agresso system, both the current version and forthcoming versions, 5.53 perhaps, or maybe we will go straight to 5.6, when that becomes available. We need to continue finding ways in which we can use the Agresso system better and more effectively, to play our part in saving costs, particularly in areas such as accounts payable processing – that’s really the meat and drink of what we do. There are other functions that we provide, but processing the supply of invoices is really the largest part of our work. And we need to work with the client to try and identify ways in which we can save money in that area and others too.
SSON: Finally, you mentioned you’re currently looking at including services such as the procurement, etc – where do you see yourself in five year’s time with Agresso in tow as well? How do you think your partnership will grow in the future?
MD: The contract is coming up for renewal. Once that’s confirmed, we can then sit down with the clients and with Agresso, and start thinking about how we can plan for the next five years or so. And as I say, whether that involves moving to 5.6 - whenever that becomes available, or whether it means taking advantage of the other possible technological changes. Things change so fast these days, including the political side – obviously the election’s going to have an impact on this and we don’t really know at the moment what particular impact that’s going to be. I can’t really say where we’ll be in five years to be quite honest, because things could move in any one of many directions.