Enabling Data-Driven Decision-Making to Address Business Underperformance
The Situation
Several months after closing on a $1.2B physical therapy provider network, a $85B private equity fund required the development of a root cause analysis model in preparation for the Company’s board of directors meeting and, for subsequent monthly operating reviews, to identify sources of the business’ margin degradation. The model would be used to evaluate business performance, with specific focus on volume & revenue, clinical & non-clinical labor, and clinical & non-clinical operating expenses.
Services
Management & Stakeholder Reporting
Business Intelligence & Forecasting Optimization
FP&A Best Practices Implementation
Reporting & Analytics
The Execution
- Met with relevant members of the Company’s finance and IT teams to collect and understand the existing data sets and data model.
- Conducted a thorough review of the available data and state of the data environment, addressing data issues, particularly related to mapping inconsistencies between stand-alone Excel files.
- Developed an Excel/Power Query model identifying the root causes for financial underperformance in the P&L categories specified by the Company in its financial workplan.
- Ensured the model included enterprise-level and individual senior employee-level revenue, clinical contribution, clinical labor, and clinical opex bridges (CY vs. budget & CY vs. PY), same store vs. ramping clinic analyses, senior employee performance tracking tables, etc.
- Developed & presented to the Company’s senior management, a summary document with relevant graphs and tables including commentary on root causes of underperformance.
- Reviewed and further iterated on the model and outputs in accordance with Company management.
- Emphasized intuitive and timely monthly update process via Power Query.
- Documented model management & update process in the form of a thorough user guide.
The Results
With Accordion’s presentation and model, the Company was able to identify several meaningful root causes of its margin degradation. The model now allows the Company to continue to track its performance in relation to the 2022 budget and prior year actuals, and was designed to allow it to be rolled forward for use in subsequent years. The Accordion team’s effort and professionalism developed a strong rapport with the Company, which resulted in two additional workstreams, namely an extensive forecast & budget process & model redesign.