Square-Off: Is Executive Pay Too Low, Too High, or Just Right?
It probably won’t ever be possible to resolve the societal debate over the proper amount of compensation that should rightly be awarded to top corporate executives. It may be no more achievable than national consensus on how to approach health care, taxes, or gender and racial equality. People in business, though, generally take it for granted that the apt amount to pay CEOs and CFOs is best left in the hands of the company’s board of directors. Among the 20 or so folks who responded to o ..
D. Kevin Berchelmann
The American Academy of Physician Assistants is exactly what its name spells out — an association of approximately 46,000 physician assistants, nationally certified and state-licensed health care professionals who work as part of a team with a doctor and can practice medicine under the supervision of a physician.
One might mistake a PA as a doctor or nurse, but in the complex medical arena they have become a cost-effective necessity to provide superior health care. “This is an extremely fast-growing profession, among the fastest in the nation, even though the profession has been around for four decades,” says Shyam Desigan, CFO and senior vice president of IT at Washington DC-based AAPA.
Four years ago, the association acquired a cloud-based planning, budgeting and forecasting system from Adaptive Planning, at a time when very few finance organizations were investigating the cloud. The impetus was the flurry of Excel spreadsheets used for budgeting and planning that whipped up problems, especially in the areas of analysis, version control and accuracy. “We didn’t have any drill-down capabilities,” Desigan explains. “And it took forever to roll up and consolidate hundreds of spreadsheets created by many different departments, often going about it differently. When all was said and done, what we were left with was a dubious document prone to errors.”
Why not purchase an on-premise planning, budgeting and forecasting system to eliminate the spreadsheet dilemma? “We thought about it, but in the long run we decided against the capital expenditure,” the CFO replies. “We’d rather the payment be a monthly operating expense than put it in the capital budget. Also, we were impressed by how fast we could have the solution ready. There would be no need for a time-consuming implementation.”
Desigan acknowledges that one of the early concerns in deciding on a cloud planning system was security. But, the association ultimately was convinced that an on-premise system actually invited more risk. “If you’re a Fortune 500 company with your own data center and a security manager, it makes sense to have your data in-house, but if we did that, the security would be a problem, not to mention the costs,” he says.
He adds, “It’s not like we have people’s Social Security numbers in the planning system —it’s just basic financial information. We also felt that the cloud had matured to the degree where security is no longer a problem, if it ever really was. The cloud vendors’ livelihoods and survival literally depend on there being no problems with security or data accessibility.”
The system is performing just as AAPA had hoped. For example, the association’s general ledger is incorporated within the tool, which has the drill-down capability that Desigan sought, “right down to the transactional level, where we can then have meaningful conversations,” he says. “It gives us talking points to manage the budget across colleagues.”
In this regard, he adds, “It is an operational tool as much as a budgeting system.”
This story originally appeared in the May 2013 edition of the CFO 360 Planning, Budgeting, & Forecasting newsletter.