Maintaining Financial Technology Skills

Submitted by jonpearce on Wed, 2011-05-11 14:19

How to prepare for your next employer while your current employer is using outdated technology

 
Several years ago I worked on projects for four different clients that involved evaluating a change in the payment methodology of a major payer.  This change had a major impact on revenue, and required analysis of historical data to estimate its effects.
 
At the first hospital, their financial data specialist (yes, there was one) prepared all the data that I needed in the first batch, and had already performed several of the intermediate steps necessary for the analysis.  Two other hospitals had more difficulty in obtaining the data.  Their data people were not finance people and didn’t understand how the data would be used; consequently they missed several important data elements and had to submit the data several times before was usable.  At the fourth hospital, the finance people were unable to access any of the data, and we had to rely on paper reports for the analysis (which obviously was quite brief).
 
Leaving aside for a moment the obvious financial exposure to the hospitals with more limited technological skills, I started thinking about the ability of financial staff members at hospital #4 to seek positions at hospital #1.  Not only would those staff members be unfamiliar with the technology that was being used - they wouldn’t even know that it existed.  So how can hospital financial analysts prepare themselves to move to positions that require knowledge of advanced financial technology?
 

Start with Excel

 
The most basic tool for all financial managers is Microsoft Excel.  Few tools are as predominant in any profession as Excel, and few professions are as dependent on the skills with a single tool as financial managers are with Excel.  Yet many healthcare finance departments continue to the use older versions of Excel, even though the newer versions offer some significant in improvements.  At a recent HFMA seminar, the audience was polled as to their use of different versions of Excel.  Nine participants were using Excel 2003, 26 used Excel 2007 and seven used Excel 2010.  Fortunately, none were using older versions of Excel which are no longer supported by Microsoft (although participants at the seminar may not be representative of all local healthcare financial institutions).
 
Excel 2007 represented a major step forward in spreadsheet capabilities.  It significantly increased the size of the spreadsheet from 64,000 rows to more than a million.  It greatly improved pivot tables, added conditional formatting to allow highlighting the cells based on their values, improved security, added several new functions, and incorporated other significant changes.  Most importantly to financial staff, the entire user interface was changed to incorporate the “ribbon” that is used in more current versions.  This new interface takes time to learn, and job candidates who are not familiar with it would face difficulty moving into a new position in a more advanced organization.
 
Excel 2010 incorporated several new useful features, including “slicers” to facilitate use of pivot tables in dashboard reports, “sparkline” graphs that show data trends in a single cell, and a “fuzzy lookup” add-in (a free download from Microsoft) that allows matching text fields that are similar but not identical (for example, “Jon Pearce” would match “Pearce, Jon”).  The two major improvements, however, are the release of a 64 bit version and another free add-in called “PowerPivot”.  The 64 bit version allows computers running 64 bit versions of Windows to allocate significantly more memory to Excel.  This allows creations of larger models, decreases the number of fragmented linked models that slow down calculations and create errors, and generally allows Excel to operate significantly faster.  Most computers manufactured within the last four years can run 64 bit operating systems, and this upgrade can significantly improve the productivity of any serious Excel user.
 
PowerPivot embeds some of Microsoft’s online analytical processing (OLAP) technology within Excel, and allows working with extremely large (multimillion record) datasets, yet retains blindingly fast response time.  It allows creating “relational joins” between tables of data, which can eliminate use of VLOOKUP functions and are more accurate and easier to use.  It allows creating formulas within the pivot table that will pivot with the rest of the data, eliminating the need to add these formulas to the source data.  The formulas understand dates and hierarchies, so you can write a formula that computes "change from last year" that will pivot with the data.  It’s a major game-changer for organizations working with large sets of data.
 

Other financial tools

 
At the HFMA seminar, one of the speakers from a large local health system described their development of a net patient revenue analysis system, and casually mentioned that his team was familiar with using SQL Server, a common database system.  Familiarity with databases will be an increasingly important skill for financial managers as the availability and types of data increase.  Some organizations utilize Microsoft Access, which works well for small datasets but does not have the capacity or tool set for large-scale use.  In addition, Access databases perform their calculations on the users’ computers, which makes them dependent on the limitations of their own hardware.  By contrast, SQL Server runs on the host server, using that computer’s power and capabilities.  It also incorporates powerful tools for importing and transforming data from external sources, and also incorporates powerful reporting capabilities.  This is far more practical for multi-user systems.
 
"But I'm (going to be) a manager!"
 
Often staff members who are reticent to learn new financial technology skills will proclaim "But I'm a manager - I don't need to know the details" of the new technology.  And that may be true - if you're the CFO and none of your direct reports use these tools.  But if your team members are more skilled than you are at using financial technology, you're no longer able to train them in proper techniques.  Instead they'll learn on their own, or from other lower-level staff members who may have developed bad habits or may themselves not have learned proper techniques.  You won't be able to review their work, since they'll be using functionality that you don't understand.  In the worst case you'll be a barrier to progress by blocking others from using functions outside of your skill set.  And you'll lose the respect of your subordinates whose knowledge exceeds yours in these areas.  These are the tools of the financial profession - if you're a financial professional you need to know how to use the tools.
 
How to learn new skills?
 
But how would one build their skills in an organization that doesn’t utilize current technology?  Fortunately, there are many opportunities.  Evaluation copies of Excel and other Microsoft products are available for download, and the “Home and Student” version of Office 2010 can be purchased for $115 from Amazon.  SQL Server Express edition is also a free download, and can even be used in a business environment.  For those interested in developing more serious skills, a “Technet” subscription from Microsoft is available for about $150 and allows access to almost all of their programs for testing and evaluation purposes.  A multitude of training labs, manuals and videos are available from the Microsoft and other web sites, and YouTube is filled with demonstrations and training materials for all types of skills.  One place to start might be http://blogs.office.com/b/microsoft-excel/archive/2011/05/10/take-the-first-step-in-growing-your-excel-skills.aspx for a series of lessons on Excel techniques.  For a modest financial investment, and a significant investment of time, you can learn on your own the skills that will be needed to keep pace within your own organization, or to move to a more technologically advanced employer.
 
“I’m not an IT person” is a common excuse for not learning computer-related skills.  Back in the 1980s, “IT people” were those who knew how to use Visicalc and other spreadsheets.  Since then, computer proficiency has become an increasing part of every finance person’s daily life.  The next generation of finance staff members is now learning advanced analytics and data mining in their MBA programs.  Their skills will rapidly eclipse yours if you don’t keep up.  And the good jobs won’t be available to you if your skills don’t match those of other candidates.
 
This article is abbreviated from a presentation at the 2011 HFMA Metro Philadelphia Decision Support Seminar.  Copies of that presentation can be downloaded from the Articles and White Papers page of www.singletrackanalytics.com.