Case Study

athenahealth boosts billability by over 20% with OpenAir

Executive Summary

Business Need

  • Improve revenue, profits and cash flow for the software implementation group:

    • Required better utilization metrics to keep team billable

    • Required data to price projects profitably

    • Needed to streamline financial integration and billing to improve cash flow

  • Implemented OpenAir’s Web-native Professional Services Automation (PSA) solution

  • Modules used include Timesheets, Projects and Invoices

  • Integrated with existing financial system

  • Increased billable time to clients by more than 20%

  • More accurate pricing increased profit margins

  • Eliminated Microsoft® Project® license cost

Business Challenge
Managers at athenahealth were not able to track metrics systematically and the systems the company was using required too much duplicative data entry to make project planning and invoicing efficient. Although the company used Microsoft® Project Central, it was not providing the needed data. “Project managers were unable to answer basic questions such as ‘Do we have enough resources on the project?’ and finance managers were unable to answer the question ‘Is the work profitable?’” said Lee Dalope, who oversees OpenAir operations at athenahealth. As a result, the company was not maximizing employee billability nor charging appropriately for software implementations.

Company Background
athenahealth is the leading provider of comprehensive practice management application platforms and revenue cycle management services to medical groups. athenahealth has a substantial professional services and support organization to install, customize and maintain its services.

Solution and Benefits
OpenAir’s professional services automation (PSA) application helped dramatically increase athenahealth’s profits and revenue, resulting in a high return on investment. OpenAir’s financial integration and invoicing capabilities also dramatically reduced the time athenahealth needed to invoice clients.
In the first quarter of 2003 before implementing OpenAir, only 80% of employee time spent on client work was billable. Service managers did not have the data to price projects appropriately, even giving away work in the process. Moreover, the whole project management process was laborious and inefficient.
In the third quarter of 2003 after reorganizing staff and implementing OpenAir, 97% of professional services client time was billable and project managers couldn’t believe how easy it was to manage projects in OpenAir.
“One project manager was spending her evenings setting up new projects in the old system. This was time she spent in addition to working twelve-hour days. Then, when we started using OpenAir, I showed her how to use the OpenAir Projects module. She left my office and then returned in about ten minutes saying she had just set up a project template,” said Dalope. “Everyone was saying ‘Where’s the catch? Where’s the work? It’s not supposed to be this easy to set up projects’,” Dalope continued.

Using OpenAir’s timesheets module to capture basic data along with the projects module, managers used the OpenAir reporting engine to study historical utilization and historical hours by project to manage staffing and pricing. The result was projects were priced appropriately and profitably.
Using OpenAir, athenahealth also improved its invoicing. “What used to take an employee hours can now be done in a few mouse clicks,” said Dalope.
Before installing OpenAir, athenahealth billing personnel extracted planned hours from Microsoft® Project®, re-keyed it into a financial package invoice by invoice, extracted the data from the financial package, and pasted the data into a spreadsheet for analysis. OpenAir automated this entire process, letting athenahealth deliver an invoice in exactly the format the client needed. In addition, athenahealth placed their logo on their invoices, generated .pdf file format invoices for client-ready professional invoices and emailed invoices to clients.
OpenAir’s Web native architecture was easy to use – employees could access the software from anywhere – and easy to configure – since there was no client side installation. athenahealth also cut costs by eliminating the need for Microsoft® project licenses, a dedicated server to run a centralized Microsoft® Project application, and licenses for a payroll system.

Technical Advantages
athenahealth looked at many PSA solutions for a system in which all of the modules—projects, timesheets, expenses, invoices—used data housed in one database. OpenAir was the only solution that met this criterion. “With the exception of OpenAir, it was impossible to find a PSA solution with a unified, single database. We ran into problems synchronizing data using our previous Microsoft Project-based system,” said Dalope, “so we really wanted a product that had a robust database that supported the entire product seamlessly. We found that in OpenAir, anyone with the appropriate user permissions can hop into the system and see the relevant numbers to determine if a project is or is not on schedule.”

Implementation and Support
athenahealth felt that OpenAir provided excellent value as a business partner and the OpenAir staff consistently exceeded expectations during and after implementation. “We feel confident recommending OpenAir to others because of the partnership that we have forged with company. We have a high degree of confidence in their product and staff,” said Dalope.