“Pandemic management is driving digitization”

An interview with social care expert Kerstin Kimmritz

The social care sector is shouldering one of the heaviest burdens in the pandemic. The need for support is growing, but workloads are falling. In this interview, the social care expert Kerstin Kimmritz from German solution provider and consultancy VRG MICOS examines how the profitability of the sector is being affected and what opportunities the crisis has to offer.

What impact is the pandemic having on the profitability of social service providers?

Kimmritz: Public attention has mainly focused on the pressure on hospitals, but other businesses in social care have suffered losses too, as more and more resources are required for, say, additional hygiene measures and cohort care. Though it’s true that government funding guarantees have had a stabilizing effect on segments that generate strong sales, such as special forms of housing and care homes, surveys also show that workloads have fallen so much at other social service providers that half of these have even had to apply for short-time work benefits. In other words, despite state support, financial losses will still be made. Sheltered workshops for disabled people and inclusive businesses are facing yet other challenges, having had to reorganize the care of their workers, who were no longer allowed to go in to work. In addition, sheltered workshops are financed by a combination of public and private funding. Some workshops operate in areas that are currently going through a strict lockdown and where there is therefore a lack of income, while others take on orders as subcontractors for industry, which now have to be processed despite a lack of workers.

What challenges is the social care sector facing at present?

The social and psychological consequences of fighting the pandemic will be felt by the people who rely on social service providers for a long time yet. The well-established routines in their care have been disrupted and are slowly being superseded by new ones. The restructuring of care under the new hygiene rules and the documentation of the additional costs tie up considerable resources and entail personal restrictions. At the same time, pandemic management has been driving digitization in many places, with some very pragmatic solutions. Even though these may work in the short term, they won’t necessarily be compliant with data protection regulations and may soon have to be replaced with solutions that are acceptable in the long term.

Where are the risks? Where are the opportunities? And how might these be used?

The financial losses caused by the pandemic will be easier to manage for those businesses which have the backing of large associations. The costs of the pandemic are also forcing public authorities to make cuts. With subsidies being discontinued, it will be more difficult to recover from the drop in economic performance after the pandemic, particularly for smaller facilities. A further consolidation of the market is therefore foreseeable. Opportunities arise above all from the extra effort that the organizations have been forced to put into digitization. In many places, analogue documentation has been replaced by digital versions. This also enables mobile working with flexible hours for those employed by social service providers – albeit only to a limited extent. Extra journeys to the office are no longer necessary. Some of the employees’ work instructions have been transferred to digital media and can remain in use after the pandemic. However, under high financial pressure, it is uncertain whether the digitization process that has begun can be continued. There’s a danger that the current, pragmatic solutions, despite their great benefits, will not be replaced by permanent solutions that are strategically embedded.

What role can corporate performance management play?

Corporate performance management can help to verify the profitability of digitization projects. While it’s true that they’re often considered to be IT projects, they actually improve many operational processes throughout the organization. The current solutions serve in corporate performance management as a basis for a realistic cost-benefit analysis. Based on the evaluation, organizations can decide on the long-term use and the ongoing integrated development of what were previously provisional solutions. From a purely practical point of view, corporate performance management can also identify any additional costs that may result from increased care requirements and the purchase of hygiene products for protective measures to strengthen the negotiating position with the funding providers. And, not least, rapid and reliable figures also help executive managers in the social care sector to get a realistic overview of their staff, finance and other resources quickly. This enables problems to be identified in good time and decisions to be made that will safeguard the future of the organization.

News update: From 27th to 29th April 2021, VRG MICOS is hosting the “Digital Corporate Performance Management Week” event with real-life examples focusing on the social care sector. For an overview of the event (in German), click HERE. For more information (in German) about VRG MICOS, click HERE.

About Kerstin Kimmritz
As Product Manager at VRG MOCOS, Kerstin Kimmritz was for many years responsible for the entire portfolio of software and consulting solutions for social care, business administration and HR management, and remains in close contact with social care providers. At present, her focus at the company is on a new product being developed for the documentation of care provision. She has twenty years of experience in consulting in social care, in the IT field and in project management for the administration of social services.