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Archive for December, 2012

What Are The True Symptoms? – Part 2

December 17th, 2012 Comments off

As I mentioned in my last post, I had the enjoyment of sitting down with my sister to help her through a hypothetical hospital P&L walk. Although her interest in the subject was forced due to a Hospital Finance course she was being forced to take, it was still enjoyable to walk her through what I do on a daily basis. As with any P&L, we started at the topline and discussed revenues, or in her case, the billings a hospital would recognize in their delivery of services. I explained to her that the hospital will assemble a Budget based on certain historical trends that would likely include patient volume, service offerings, anticipated growth/decline in the surrounding community, and other similar factors. That the actual billings would be tracked against these figures and any changes would be reflected as a variance. We discussed the possibilities that might significantly affect the billings of a hospital, which might include natural disasters, significant weather impacts, major accidents (airline), or possibly a viral outbreak. While these might seem extreme, they are examples of what could drive variances in a hospital’s P&L.

We kept the walk very simple and segregated only between billings and the operating expenses of the hospital. With that in mind, we started discussing some of the common elements to a hospital P&L. The biggest factor in this portion of the walk being labor. We discussed how a hospital, based on historical activities, would likely set up a labor matrix for the staffing of the hospital, and what the effects would be if admittance rates drastically increased or decreased, and the subsequent variances this would cause. She started to see the pattern here and started drawing similar analogies to the use of supplies, as well as what the effects would be if inferior supplies were used….& the potential liabilities this would create for the hospital. I could sense that her grasp of the subject was taking hold and she was actually becoming enthused about the topic.

As we walked through a number of the other P&L elements she actually commented that I seem to have a pretty interesting job. I told her that the biggest key to executing on the original Budget, and the ability to address changing market conditions, was ongoing communication & transparency with the staff. It’s the job of the Finance department to provide the proper level of transparency and help keep the team informed and educated on the results being achieved. It’s the obligation of Finance to communicate with the rest of the staff, and as I advised my sister, it’s critical to understand what the true symptoms are of the variances that are being presented.

Thanks for reading…

Jeffrey Ishmael

What Are The True Symptoms?

December 10th, 2012 Comments off

For those that know me and have followed my blog for some time, the original catalyst for my writing was to develop a broader understanding of finance and help educate the other functional areas within my company. To give them a better understanding of how their actions affected not only other areas, but ultimately, the performance of our company’s income statement. What I got a kick out of was getting a call from my sister asking me questions about finance and hospital operating expenses. She thought she had signed up for a Hospital Finance course, but instead, found herself in what she thought was a “Greek” class.

We arranged some time to meet up and I immediately started getting the frantic download of all the new terms she was having to come to grips with. Operating expenses, variable expenses, fixed expenses, variance analysis, and a host of others. I was also hearing about the varying “financial opinions” that were being shared by her classmates, which was somewhat amusing. Rather than bore her with just a review of terms, I decided to have her take a “walk” through a hypothetical hospital P&L. I wanted her to really understand how all the elements are correlated, what the influencing factors can be, and that the story presented isn’t always so clear cut. I also wanted to leave her in a position so that if she were ever in a situation where she was being challenged on some operating expense variances that she would know some of the proper questions to ask rather than being told her performance was sub-par.

Another area we spent some time covering was that of a Budget, when assumptions are changed due to market dynamics, and thus prompts the creation of a Forecast. The whole concept of having to follow and report on your actual results against two hypothetical scenarios was a consideration she just didn’t want to have to entertain, but she got it.

Before we started the walk, I told her that in order to properly evaluate the variances that are being reported, it’s necessary to understand what the drivers are behind the variance…what is the real story.  In the terms she works with every day, you have to understand what the true symptoms are. We’ll cover the rest of the walk, and her changed perceptions, in my next posting.

Thanks for reading…

Jeffrey Ishmael

There’s No Other Lane Than The Fast Lane…

December 5th, 2012 Comments off

If you’ve ever worked for a start-up or been associated with one, then you know there is no other lane available than the fast lane. You also know that, unlike traditional corporate environments, there’s not a clear cut segregation of duties. On your first day, after you’ve signed all the requisite paperwork, you’re given a broad selection of hats to wear…all of which need to be worn on a daily basis. In my case, I eagerly picked up hats for Finance, Operations, HR, Legal, and Purchasing. While many would scoff at having to take on functions they feel didn’t apply to them, it’s a great opportunity to help shape the foundation of the company and know exactly what levers are being put into place to pull at a later time. After spending months in the fast lane and staying head down, it’s pretty satisfying to see the efforts of the team play out with some of our recent changes and announcements.

After running stealth behind a 1-page static homepage, we launched our first revision of our website. We have some great talent coordinating the effort and the finished site is a product of that. It’s exciting to be able to actually start directing folks to the site who are constantly asking what we have been about, but until now, have been silent on our efforts. www.cylance.com

We also announced our acquisition of Skout Forensics, which is our second acquisition. Skout Forensics, based in the Washington, DC Metro Area, will be integrated into Cylance’s development team to enhance its own forensics technology roadmap and merge into Cylance’s professional services team to expand its already advance forensics capabilities.

While we’re allowing a little light to shine on our accomplishments this week, there are obviously more great things to come and we’ll continue to keep a laser focus on what needs to be accomplished.

Thanks for reading…

Jeffrey Ishmael