MHC Automation (ORCL) Earnings Call Transcript & Summary

Hey, Luke. Can you hear me, okay? You're on mute.

Sorry, yes, I can hear you.

Perfect.

We'll start it. So we'll give everyone here another minute or 2 to dive in, and then we'll get going.

Sounds great.

60 seconds, and then we'll kick this party off. All right. We're at the top of the hour here on Tuesday. So we're going to dive in and get going. I appreciate everybody's time today for hopping on. We're going to dive into a lot of exciting updates. Please, if there's Q&A questions throughout, we're going to have a dedicated time for those at the end. If you've got things that come up throughout the presentation today, you'd like to ask them, while we go through, please don't hesitate to pop it into the Q&A. Rough agenda and schedule. We'll do a quick intro for Mike and myself. Super excited to have my buddy, Mike joining us this afternoon. We'll dive into kind of Oracle and MHC some of the really unique things that we're tackling together overall and with a lot of nuances as it relates to the health care and life sciences industries in particular, how we're both supporting customers on their journey to the cloud and then some specific examples of what MHC is doing for many health care and life sciences organizations. So without further ado, I'll maybe flip it to Mike to do a quick intro on himself.

Great. Thank you, Luke, and hello, everyone. Appreciate the opportunity to join my partner, MHC, in this event. So I'm Mike Pfeffer, based out of Chicago, Illinois, been around Oracle many, many years, about 13, 14 years in various roles. Over the last couple of years, I've been working as a senior director running a group that specifically works with ISVs. And basically, what an ISV is, it is a partner that has proprietary software that extends and complements our solution. So MHC is part of my strategic group. And yes, looking forward to telling you a little bit more about it.

Awesome. Thanks, Mike. And again, my role. My name is Luke Steckler, MHC's headquartered just south of the Twin Cities in Minneapolis and St. Paul. I really lead all of our strategic partnerships. So we're hand-in-hand with Mike and he does an awesome job with all of our partners at Oracle. And then again, strategic partners, systems implementers really crews outside of that. All of that is what really encompasses my role. I'm super excited to share more about the Oracle MHC partnership, what that means for you, what that means and why we're excited about this. Many of you are likely familiar with Oracle. Some of you may or may not be as familiar with MHC. So big to high-level background, we've been around for the better part, more than 2 decades, with a real focus on document management, workflow automation. The vast majority of that time has been spent in the procure-to-pay space. Customers. We really say MHC stands for our make it happen commitments. So we're super proud that over 1/4 of our customers have been with us for over 15 years. And we've really experienced a lot of evolution, a lot of growth. Now we're handling over $160 billion in payments annually and over 24 billion invoices per year. So it's -- but again, all those things are great, but there wouldn't be anything without our partners, without our customers. I'm excited to really talk about and unpack today, how we're leveraging some proprietary technology on our side, on the Oracle side for really what we think is going to be unparalleled customer experience. Overall, health care is our top industry. Health care and life science is really bookend what I would call our top 6 verticals there, 1,300 customers around the world. And people ask you, what does MHC do? We really do documents and workflow automation in a variety of different avenues. Our conversation today is going to focus a lot around procure-to-pay, invoice and in payment automation. We do other areas in the HR, supply chain documentation space and also things in the customer communication standpoint. So high level of where MHC fits and what we do. So again, better together, the Oracle and MHC partnership, something we're really excited to unpack and I'll maybe hand it to Mike to talk about it from the Oracle perspective.

Sorry, I was mute. Real briefly here. So I described kind of what an ISV is, right? So again, it's a company that develops proprietary software that complements and extends our solution. Oracle is very proud of where we are in the market from an ERP, HCM, CX perspective. But the truth of the matter is that some of our clients, like yourselves on the phone, I'm sure, have some requirements that Oracle doesn't really handle out of the box. So we look for companies that are, number one, mature in the market. They're proven. They're market leader and most importantly, or just as important, I should say, is that they have an Oracle validated integration into our solutions. So what that means is Oracle looks at the solution, we have a very methodical process, and we validate that it works with our solutions. And why MHC and not other companies out there in the space is, again, they're proven. They have happy customers, they're mature and they were market leader. Why we do this for our Oracle customers is to make a happier Oracle customer at the end of the day. We want to deliver with the help of ISVs, a complete, robust solution that delivers what our customers are looking for. So again, I think you're going to see a lot of this in today's meeting. Hopefully, some of you will want some follow-ups with MHC deeper dives, which I would be happy to be part of. But again, I want to thank MHC for investing in the integration with Oracle and thank everyone on the phone today. And I'm around for any questions or any follow-ups, Luke, obviously.

Yes, for sure, for sure. Thanks, Mike. From our perspective, it echoes a lot of that, why we are excited. I think in many more ways than one, a lot of our customers really mirror Oracle customers. Many times, they're the same size, many of those same industries that we showcased earlier, again, kind of the focus and talk track today is a lot about health care. Obviously, the Oracle investing in the Cerner acquisition. We've had a large presence in health care for a couple of decades. There's a lot of lay over and a lot of, again, mutual success that we've had with customers and understanding the nuances of those different verticals and what it takes it to be successful there. As Mike said, hey, we're really excited about the ability to augment procure-to-pay and will impact what that really means to us across, again, whether that's Oracle E-Business Suite or JD Edwards or PeopleSoft or Oracle Cloud ERP, really utilizing Oracle's technology to deliver a seamless experience regardless of ERP, regardless of what version you are on, that really makes it successful for all of us. The customer-obsessed approach, as we've said, is really paramount for us, bringing that to Oracle. The ultimate goal is really, again, what we've kind of highlighted here at the bottom. What we think about is empowering and enabling agile customers that can adapt quickly and Oracle customers that are ready for the future because really nobody knows what that might look and feel like. We had a pandemic number, post-pandemic, and supply chain inflation and I don't know what the next 24 months is going to bring, but we know business is going to evolve and change. We want to really empower that evolution and enable that in the applications that people are investing in. So what are some of the unique pieces? As Mike mentioned, Oracle, again, market leader in financials, ERP, nobody does this better. So why MHC, where are we helping enhance and complement all the things that Oracle already does really, really well. What are some of those unique challenges or obstacles or again, opportunities to deliver a better experience. Many times, looking at finance, financial departments, health care, life sciences and AP as a whole, again, like many over the last couple of years, we've really been in a budget tranche. If we take the health care examples, particularly many people have been trying to operate very tight or below the margins. We're all focused on how can we do more of the same or more with less in some instances, which causes again stress, it causes challenges. It's really -- and again, not to mention compliance, security, audit type of risk and potential. So with their goal is to say, "Hey, how can we leverage technology, leverage solutions to empower and deliver a far more advanced department. Well, also, how do we pivot AP from what might traditionally be referred to as a cost center to a true data center, data center that's helping enable the business for forecasting for evolution in those types of components." And again, doubling down on health care and what providers are stacked up against, they are unique in this world. Many times, they might be having multiple capture centers, whether that's clinics, whether that's hospitals, multiple entities within the provider network. One of the really key things that we've worked with on the Oracle team that they've seen within MHC is the ability to process high volume, highly variable invoices. Many times, we're doing thousands, tens of thousands, even upwards of maybe over hundreds of thousands of invoices a year that's coming through from a few to many thousand suppliers with lots of nuance. So how do we handle those things at scale? How do we handle the nuance, the volume, the variability of that, [ I'm going to ] simplify and automate that as much as possible? We're also making things intelligent. The ultimate goal here is faster time to value, accelerating processing rates, straight-through processing, payments, including patient refunds, which will impact a little bit more. And then making sure that around that entire ecosystem, we have a secure, compliant and auto ready application that, again, complements every other part of our business. So we'll unpack this little bit further as we go through today. Where we are -- we're supporting Oracle customers on their cloud journey. This is something that is really paramount to us and the Oracle team as well is really meeting customers, potential customers, wherever they are in that spectrum. Some folks might be moving to Oracle Cloud from another ERP, people might be on, again, E-Business Suite, PeopleSoft, JD Edwards, folks might be on Oracle Cloud Fusion, lots of different paths within that. What we're excited about is that we can really meet you wherever you are. And a lot of the power that Mike talked about with Oracle's technology and leveraging a lot of that really enhances that entire experience is that we can provide a modern SaaS-based solution that unpacks and tackles all of those challenges. And we can do that for folks who have gone to the cloud who, again, some of the needs they have, haven't been met, for folks who say, "Hey, we're thinking about it. We may or may not be ready yet, but we want to start to modernize our current applications." For Folks that are thinking, "Hey, you know what, we're at least half a decade away from this, but we need a better solution." It's funny. I was at the Ascend conference in Florida last week, which, again, a wide spectrum, a few thousand Oracle customers. And there was, again, a good mix there as well, people on all different ERPs, some folks who have gone to the cloud, some folks who have not gone to the cloud. Many of those folks who had gone to Cloud Fusion were really focused on, "Hey, how do I modernize my current applications?" We're not migrating yet, but we want to move this to a hosted environment like Oracle's Cloud infrastructure. And then within that, there might be elements of those on-premise applications that they invested in 10, 15, 20 years ago and systems that support and enhance that, that are, again, 10, 15, 20 years old that will also become outdated. So how do I maximize what I have, while modernizing and again, with that focus on being ready and empowered to tackle whatever the future holds. So that's really key for us on that entire spectrum of wherever folks might be on their journey. So how do we impact this for teams like you all for, again, a lot of the different folks that are on the call today and in different areas and different nuances? What are the things that other customers have recognized? Why have they opted to utilize a solution like MHC? First off, it's been able to look at, hey, how do we make this as touchless and automated as possible. We really want to develop a single source of truth. And we want to leverage the latest technology on that. We want to invest in an application that's going to be, again, help us on day 1, day 90, day 900 and day 9,000. This is something people are really looking at for the long term. And we have -- I'd like to say we were leveraging tools like AI and we see learning before it was cool to use AI and machine learning. And we'll unpack a little bit about how that goes and how we leverage those technologies as we go today. Patient refunds and vendor payments. Obviously, the patient refund component is very unique within the health care space, and that's something we've been tackling for, again, decades many folks duplicate invoice detection is paramount. It falls along the same lines of security, fraud, compliance risks, having segregation of duties in those components, but making sure that we're flagging these things in the system. We're bringing them to a human's attention, and we're never double paying. And again, you'll kind of see the second to last bullet point that I've talked about here that I've outlined, and I'm highlighting. That's really the key focus that we're going to unpack over the next half of the webinar is, how do we get folks to that future-ready state? How do we allow you to be agile, to be adaptable within a modern solution so that, hey, we have a faster time to value. We can really reduce overall maintenance, hierarchy approval, workflows, everything that goes into that. That said, we can talk about bells and whistles and features and functionality for days. But in our opinion, the technology side of things is really meaningless without the human side. So that's something that MHC has taken an immense amount of pride in is the human component of all this that, hey, somebody who's there at the beginning of the journey and wherever that journey takes us from a support, implementation, all of those components. So this is, again, some cool quotes that we've grabbed from G2 Crowd. We're really proud of the way our customers have talked about us on platforms like G2 Crowd. I know if you head out there, I think we've got I think it's over 80% of our reviews are our 5-star reviews and over 90% are either 4 or 5 stars. So we've been able to really make a lot of momentum within this space and catapult over a lot of other companies in the space, given not only technology but the people behind that, which again, we feel like is even more critical than ever and something we're really excited about with Oracle is bringing the human component connection paired alongside some awesome technology to the Oracle ecosystem. So really key pillars. Where does this all stack up at the end of the day? And how is MHC at a more tactical level, augmenting, enhancing, complementing the different ERPs we've talked about within the Oracle ecosystem? So we'll unpack this on a couple of different levels. First, starting with capture, extraction, which is paramount. We'll talk about AI and machine learning and how we're leveraging that throughout the life cycle of what we're doing; workflows, visibility, that commitment to the business user, showing you a little bit of the application and how things start to look and feel, and then we'll close that out with payments as well. And again, if questions or things come up, please feel free to fill those our way. Happy to dive into it. So this is an area that, again, I think the Oracle team is really got excited about MHC from the start knowing that, hey, intelligent capture, OCR is maybe another term extraction. This is where it all begins. If we don't have a strong foundation, with that house, pyramid, whatever analogy you want to use, isn't built on a strong foundation. They really has a negative effect downstream. This is the foundation of everything that comes after it. And if we can't get off to a strong start with these pieces. It really starts to defeat the purpose, degrade the value prop of everything we're doing downstream. So this is something we've, again, really taken a lot of pride in and invested a lot in is the ability to have really strong capture rates. And it's within a solution and an application where I don't need to build out templates for all my suppliers, like we talked about at the beginning, many of you on the call, others. If we're a health care provider that has thousands of suppliers, that completely negates my time to value if I need to take x amount of time to build out a template for each of my different suppliers that might be coming in and we need to grab invoices for. So it's completely nontemplate-based. We're able to get, on day 1, typically 80% field level extraction. And then we leverage AI. We leverage machine learning to get some more where after 2 to 3 iterations, we can jack that up to, again, over 93%. So it's really a technology that's been recognized by -- you can pick your industry analysts as incredible. And again, really shows its true colors and specialized is when we talk about volumes, nuances in detail when we're talking about invoices and POs with vast detailed line items, the ability to accurately ingest that not only take it, but now instantly using that integration with Oracle, how do we pair that side by side against PO data, supplier matching, instantly flag and identify variance and exceptions, handling all of those pieces. So what that starts to look and feel like a little bit is, hey, let's say, we're looking at an Oracle, I can see my exact vendor and a tax code and those different components. Maybe the PO says, we ordered 10 units of 50 each, but our invoice has 1 at 500. So that end quantity matches, but we've got a variance there. Those are things that our application would flag, would bring it right to the individual's attention on your team, and those are things that we can then tackle from there. But the beauty of some of this is that ideally, we never even get to this point. If we're able to extract and capture and we have a good percentage of PO invoices, you never see this. We're processing those automatically, handling the matching. There's no variances or exceptions. We're going to drive them right into Oracle for batching and for payment. But again, really [indiscernible] here. This is an area where, again, whether it's even some things as simple as build to and ship to and remit to that we've been able to really form a strong solution around to make sure that the foundation is rock solid for everything we're going to do and talk about now. Once we've got those components, right, maybe there are some variances, maybe there are some exceptions, maybe we have non-PO invoices that need to go for approval, coding, et cetera. We've really, again, to kind of the next stage from there is we tried to build a very powerful workflow engine, where we want a single workflow for GL coding and approval regardless of what that approval hierarchy, structure, workflow looks like across the enterprise. And we're leveraging AI within this entire process as well. So that maybe it's leveraging that to route it to the right person in AP. Maybe it's been able to look at supplier or invoice data to route that for things that were purchased by neurology or oncology or another department within that overall health care provider system or maybe it's being able to use the same data and leverage that for previous GL coding to look back at, hey, I had a similar invoice from a similar supplier in the past that was broken out across 4 or 5 different buckets within my general ledger, how do we automate that process or at least do 95% of the work and bring it to a human's attention for them just to validate before we push it downstream. So lots of power and nuance within there. And again, we talked about exception handling and variances. The beautiful part of this is that it's a single application for not only AP, but also purchasing and buyers. It's the ability for them to truly work in tandem when there are pieces that come up, issues that arise, things that we need to frankly flush out or kind of talk through as a team that does need to be done externally. It can all be done in the same single source of truth. And many times, we started to talk about handling this at scale across an enterprise, maintenance, hierarchy, how we're going to maintain workflows and approvals and those things become a very valid point of conversation. And it's something that's really, I think, important and key to unpack. We've tried to build a solution that's as flexible as possible. It's things that, hey, if you want to tackle this inside of Oracle, leveraging Oracle's hierarchy and those types of components, great. We can push it into Oracle as soon as possible. All those components can be handled there. Maybe you -- again, a lot of times the workflow, the approvals are driven by the HR hierarchy. And if you have nuances outside of that, that you need to work through within your approval structure, and it may or may not be the best point. We can talk of those pieces as well. We've got some functionality around components like dynamic business rules and automated hierarchy adjustments that are really key to simplifying this maintenance long term, when there are changes to the team, to the org chart, to the way that we need to work in process. Again, it's not a development exercise or an intensive lift to do that. We've got a platform that's again, easier and faster to get up and running, easier to maintain and allows us to be really agile and adaptable again, like we've mentioned a few different times, as our business shifts, pivots, things change, mergers and acquisitions are again very common right now within the life science and the health care space. How do we, again, invest in solutions that are going to remain agile and adaptable. So this is kind of a cool thoroughly designed. It's kind of a [ rubric ] video that starts to show a little bit of that no code interface that we've built within MHC to empower, again, the business user. If I need changes within my workflow. If I need components that need to shift or pivot or look a little different or I need a step or another component for validation, bringing in another individual on the team. It's pure configuration. It's something that we can -- again, it's already prebuilt in the application. It's not a custom exercise to change the application to work the way you need it. Visibility. Visibility is really key to these components. It's not just capture, it's not just sending it downstream so that the appropriate checks and balances are done. But it's really been able to say, "Hey, I want to have a single source of truth across everything within my procure-to-pay enterprise. Dynamic image drill is fantastic with our integration to Oracle because that allows you as the user to never have to leave Oracle Cloud. I can ride inside of Oracle Cloud. I can dynamically drill right back to an invoice image, to a transaction, to a particular requisition and see everything that's been connected to that. So it's the ability to look at, hey, here is the invoice, the PO, the vendor documentation that supports it, the payment that went out the door and then the confirmation of receipts without even to hunt, to pack, and search and dive around, I've got all of that in a single central source of truth. Again, the way we...

Hey, Luke, if I may. I mean there's a lot of places I wanted to throw a couple of words in a lot of benefit. I just wanted to state to the audience here. This is one of the key benefits I hear from many Oracle customers that are leveraging the MHC solution. You heard Luke state that they feel like they're still within Oracle, right? You're not going into another solution logging in, completely different look and feel, right? It's really one of the reasons why my group selected MHC for this requirement. Luke, I really like how you articulated that. I just wanted to make sure that, that was understood by the audience, which I'm sure it was. I just wanted to state, I didn't hear this being a common huge benefit theme from our joint customers.

Certainly, I appreciate you bringing that up, Mike. And yes, it's something that it gets sticky, people bring it up. Well, it's kind of one of those things or once you have it, you don't -- you can't imagine life about it. [indiscernible] mentioned customers said, "Hey, we use that every day." I use them multiple times a day, whether it's with external vendors or internal people saying, "Hey, did we pay this? Where was that at?" So it's one of those can have or can't miss components for sure.

Excellent. Thanks, Luke. Sorry to interrupt you.

No, no interruption at all. It was great, Mike. To that point, again, kind of the way that we leverage and license some of our solutions is with unlimited users. So there's no limit to whoever within the organization needs to be there from a communication perspective. EDI 810, many of you might have thought about, "Hey, Luke, we do get invoices via e-mail or those types of components. We also get a fair amount via EDI." So we've got functionality, again, that supports Oracle, where we can make all of those EDI 810 files human readable and human visible. So that, hey, you're still receiving those, you're processing those, but many times, it's taxed. It's jargon. It's we can't really understand that. We are able to translate all that and make it human readable, visible again for when we capture it initially, but also if we need to grab that downstream. And again, the beautiful part of all of this is that it's out already on day 1. So that whatever changes communication, everything is tracked, it's state and time stamped, it's a future based, so that we've got a system that we can again [ auditing ] is never the most exciting and the funniest part of our jobs, but it's certainly necessary. Though we've got an application that is auto writing, we've got all that information at our fingertips when needed. And that's where, again, like we talked about in the beginning, the ability to take AP from what might be, for lack of a better term, a cost center to how do we empower AP to really be a financial driver? How do we ensure when we've got this data, how do we drive business decisions when we've got instant access into liabilities, into accruals, into how do we optimize payments across our vendors and suppliers with strategic priority and lots of ways to unpack that. So that's really the ultimate goal we want to take with a lot of folks. So to sum up that side, again, some of the key considerations that we've seen and that we think about with customers and potential customers is looking at volume, whether it's invoices or line items or suppliers, it's looking at those percentages, the higher the PL percentage, that's good. It certainly eliminates workload, but I would say it makes it even more mandatory to have something with a really strong capture rate because when you've got a IPO percentage, but you don't have a solution that's strong and capture. So it's really going to defeat the purpose. And then on the non-PO side, the more and more non-PO invoices that you have, that's where the workflow components and workflow automation and approval routing becomes paramount because to capture value on the non-PO side, you need something that's going to be really strong to route things intelligently, accurately and quickly across the organization. We've talked about a few of these other components, but hey, they value and how long it takes you to process an invoice. What is your cost of invoice? Those are interesting components and things to think about for sure. Not going to spend a ton of time on payments today, but that's an entire other component that we could certainly dive into within the Oracle ecosystem. At the end of the day, it's a variety of different formats and a lot of time to say, it's configuration without custom development. If your bank has specific requirements so you have really unique nuances that you need across dozens, hundreds of banks, format, signers and those things, patient refunds, again, is always a unique payment experience, especially within health care. Those are ways that we can augment and support and enhance again, whether it's Oracle EBS or PeopleSoft or JD Edwards or Oracle Cloud ERP as well. You might notice a theme. We've talked about a lot, kind of that impact and empowering the business user, but it's the same no-code, drag-and-drop interface here or when my business evolves and changes, and we need to make updates. It's not -- it's a configurable, again, things that can be done by the business user. I don't have to call IT. I don't have to put it in a ticket. With a bit of training, I'm empowered to own my own application and be ready regardless of what the future looks like. Bringing that all together, this is a really cool customer story for a health care system in the Northwest, Washington, I want to say Oregon, Idaho, Alaska, that, again, leveraging MHC, they're doing pretty big volumes. Started doing over 300,000 invoices a year. At the end of the day, utilizing some of our technology, they were able to more than 5x their straight through processing, really, again, turn AP from a manual cost inefficient department into, hey, how can we really turn this into a strategic advantage, and then dramatically reduce their overall turnaround time in terms of what it took to get them from point A to point Z. It used to take nearly 2 weeks -- 2 full weeks, over 2 weeks in terms of business days to less than a day.

I know we're a minute or 2 past time. Questions. I think -- I didn't see anything come through yet, but I'll certainly open it up if they're in this Q&A if they want to send to Mike or to myself. And if you're bashful or don't want to. I'm going to put Mike's e-mail in there as well, but always happy to -- feel free to reach out to us directly, happy to unpack some of these things or talk through a little bit further. Mike, anything you want to wrap up to the group maybe before we call it this afternoon. I'll put you on the spot here.

Yes. No, no, no, not at all. No, I really appreciate this. I think this is a great overview. I'm confident that maybe participants got some value out of it. It was high level. I would love the opportunity to dive deeper into this. Again, I do want the Oracle customer base to be as happy as possible with their Oracle investment. I think this could certainly add some value to that. And Luke, yes, please include my information as well. I mean Oracle is a big company, as everybody knows. I pride myself on making Oracle feel a little bit smaller. I've been in pretty much every group within Oracle in my years. So on the application side and on the product side, the marketing side, the tech side. So I love helping people. So if anybody needs anything above and beyond MHC, you have a contact with an Oracle that is always willing to help an Oracle customer.

Awesome. Thanks so much, Mike. I don't see anything coming through. So we might wrap it for today. I really appreciate, again, great to see you again, Mike. I appreciate the time today. Folks, thanks for hopping on. Certainly, feel free to reach out to us at any point in time, and we'd be happy to talk further. If nothing else, have a great rest of your Tuesday. Thanks, everyone.

Thank you. Bye-bye.

Thanks, Mike. Bye, all.