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Item 1. Business

2023-02-28 compared with 2022-02-24 · 98 added, 66 removed, 84 unchanged (66% of the section changed)

Huron is a global consultancy that collaborates with clients to drive strategic growth, ignite innovation and navigate constant change.

Through a combination of strategy, expertise and creativity, we help clients accelerate operational, digital and cultural transformation, enabling the change our clients need to own their future.

By embracing diverse perspectives, encouraging new ideas and challenging the status quo, Huron delivers sustainable results for the organizations it serves.

Huron is a global professional services firm that partners with clients to develop growth strategies, optimize operations and accelerate digital transformation using an enterprise portfolio of technology, data and analytics solutions to empower clients to own their future.

By collaborating with clients, embracing diverse perspectives, encouraging new ideas and challenging the status quo, we create sustainable results for the organizations we serve.

We are headquartered in Chicago, Illinois, with additional locations in the United States and abroad in Canada, India, Singapore, and Switzerland.

We provide professional services through three operating segments:

Healthcare, Business Advisory, and Education, which for the year ended December 31, 2021, we derived 42%, 32%, and 26% of our consolidated revenues from these operating segments, respectively.

Effective January 1, 2022, we modified our operating model to expand and more deeply integrate our industry expertise with our digital, strategic and financial advisory capabilities.

The new operating model will strengthen Huron’s go-to-market strategy, drive efficiencies that support margin expansion, and position the company to accelerate growth.

To align with the new operating model, effective with reporting for periods beginning January 1, 2022, we will begin reporting under the following three industries, which will be our reportable segments:

The new operating model strengthens Huron’s go-to-market strategy, drives efficiencies that support margin expansion, and positions the company to accelerate growth.

To align with the new operating model, effective with reporting for periods beginning January 1, 2022, we began reporting under the following three industries, which are our reportable segments:

Healthcare, Education and Commercial.

The Commercial segment will include all industries outside of healthcare and education, including, but not limited to, financial services and energy and utilities.

In the new reporting structure, each segment will include all revenue and costs associated with engagements delivered in the respective industry segments.

The new Healthcare and Education segments will include some revenue and costs historically reported in the Business Advisory segment and the Healthcare segment will include some revenue and costs historically reported in the Education segment.

We will also provide revenue reporting across two principal capabilities:

The Commercial segment includes all industries outside of healthcare and education, including, but not limited to, financial services and energy and utilities.

In the new reporting structure, each segment includes all revenue and costs associated with engagements delivered in the respective segments' industries.

The new Healthcare and Education segments include some revenue and costs historically reported in the Business Advisory segment and the Healthcare segment includes some revenue and costs historically reported in the Education segment.

We also provide revenue reporting across two principal capabilities:

i) Consulting and Managed Services and ii) Digital.

These changes will create greater transparency for investors by improving visibility into the core drivers of our business.

While our consolidated results will not be impacted, we will recast our historical segment information during 2022 for consistent presentation.

For further financial information on our segment results, see Part II - Item 7.

These changes improve visibility into the core drivers of our business.

While our consolidated results have not been impacted, our historical segment information has been recast for consistent presentation.

See below for additional information on our principal capabilities and operating industries.

For information on our segment results, see Part II - Item 7.

"Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 19 "Segment Information" within the notes to our consolidated financial statements.

Our Healthcare segment serves providers and payors including national and regional hospitals, integrated health systems, academic medical centers, community hospitals, medical groups and health plans.

Within each of our reportable segments, we provide services under two principal capabilities:

i) Consulting and Managed Services and ii) Digital.

• Consulting and Managed Services

Our Consulting and Managed Services capabilities represent our management consulting services, managed services (excluding technology-related managed services) and outsourcing services delivered across industries.

Our Consulting and Managed Services experts help our clients address a variety of strategic, operational, financial, people and organizational-related challenges.

These services are often combined with technology, analytic and data-driven solutions powered by our Digital capability to support long-term relationships with our clients and drive lasting impact.

Examples include the areas of revenue cycle management and research administration at our healthcare and education clients, where our consulting and managed services projects are often coupled with our digital services and product offerings.

Our Digital capabilities represent our technology and analytics services, including technology-related managed services and software products delivered across industries.

Our Digital experts help clients address a variety of business challenges, including, but not limited to, designing and implementing technologies to accelerate transformation, facilitate data-driven decision making and improve customer and employee experiences.

We have expanded our ecosystem to work with more than 25 technology partners.

We are a Leading Modern Oracle Network Partner;

a Summit-level consulting partner with Salesforce.com and a Premium Partner with Salesforce.org;

a Workday Services, Preferred Channel, Extend, and Application Management Services Partner;

an Amazon Web Services consulting partner;

an Informatica Platinum Partner;

an SAP Concur implementation partner;

and a Boomi Elite Partner.

We have also grown our proprietary software product portfolio to address our clients' challenges with solutions that expand our base of recurring revenue and further differentiate our consulting, digital and managed services offerings.

Our product portfolio bundles our deep industry expertise and unique intellectual property together to serve our clients outside of our traditional consulting offerings.

Our product portfolio includes, among others:

Huron Research Suite, the leading software suite designed to facilitate and improve research administration service delivery and compliance;

Huron Intelligence™ Rounding, the #1 ranked Digital Rounding solution in the 2023 Best in KLAS® report;

and Huron Intelligence™ Analytic Suite in Healthcare, a predictive analytics suite to improve care delivery while lowering costs.

Operating Industries

We provide our services and manage our business under three operating industries, which are our operating segments:

Healthcare, Education and Commercial.

For the year ended December 31, 2022, we derived 47%, 32%, and 21% of our consolidated revenues from the Healthcare, Education and Commercial operating segments, respectively.

Our Healthcare segment serves acute care providers, including national and regional health systems;

academic health systems;

community health systems;

and public, children’s and critical access hospitals, and non-acute care providers, including physician practices and medical groups;

and long-term care or post-acute providers.

Our Healthcare professionals have a depth of expertise in business operations, including financial and operational improvement, care transformation, and revenue cycle managed services;

digital solutions, spanning technology and analytic-related services and a portfolio of software products;

organizational transformation;

and digital, technology and analytic solutions.

Most healthcare organizations are focused on changing the way care is delivered;

establishing a sustainable business model centered around optimal cost structures, reimbursement models and financial strategies;

evolving their digital, technology and analytic capabilities;

and exceeding the expectations of their employees and patients.

Our solutions help clients adapt to this rapidly changing healthcare environment to become a more nimble, efficient and consumer-centric organization.

We use our deep industry expertise to help clients solve a diverse set of business issues, including, but not limited to, optimizing financial and operational performance, improving care delivery and clinical outcomes, increasing physician, patient and employee satisfaction, evolving organizational culture, and maximizing return on technology investments.

• Business Advisory

Our Business Advisory segment works with C-suite executives and business unit and functional leadership across a diverse set of organizations, including healthy, well-capitalized companies to organizations in transition, and across a broad range of industries, including healthcare, energy and utilities, financial services, life sciences, industrials and manufacturing, education, and the public sector.

Our Business Advisory professionals have deep industry, functional and technical expertise that they put forward when delivering our digital, technology and analytics, strategy and innovation and restructuring and corporate finance services.

In today’s disruptive environment, organizations must reimagine their historical strategies and financial and operating models to sustain and advance their competitive advantage.

Organizations also recognize the need to adopt technologies, automation and analytics to improve their operations and compete in a rapidly changing landscape.

Our experts help organizations across industries with a variety of business challenges, including, but not limited to, embedding technology and analytics throughout their internal and customer-facing operations, developing insights into the needs of tomorrow’s customers to evolve their enterprise and business unit strategies, bringing new products to market, and managing through stressed and distressed situations to create a viable path forward for stakeholders.

Our Education segment serves public and private colleges and universities, academic medical centers, research institutes and other not-for-profit organizations.

Our Education professionals have a depth of expertise in strategy;

business operations, including in the areas of the research enterprise and student lifecycle;

digital, technology and analytic solutions;

financial advisory and strategy and innovation.

Healthcare organizations are focused on establishing a sustainable long-term strategy and business model centered around growth, optimal cost structures, reimbursement models, financial strategies, and consumer-focused digital transformation;

changing the way care is delivered, particularly in light of personnel shortages, and improving access to care;

and evolving their digital capabilities to more effectively manage their business.

Our solutions help clients adapt to this rapidly changing healthcare environment to become a more agile, efficient and consumer-centric organization.

We use our deep industry, functional and technical expertise to help clients solve a diverse set of business issues, including, but not limited to, identifying new opportunities for growth, optimizing financial and operational performance, improving care delivery and clinical outcomes, increasing physician, patient and employee satisfaction, and maximizing return on technology investments .

Our Education segment serves public and private colleges and universities, research institutes and other education-related organizations.

Our Education professionals have a depth of expertise in strategy and innovation;

business operations, including the research enterprise and student and alumni lifecycle;

digital solutions, spanning technology and analytic-related services and Huron Research Suite, the leading software suite designed to facilitate and improve research administration service delivery and compliance;

and organizational transformation.

Our Education segment clients are increasingly faced with financial and/or demographic and enrollment challenges as well as increased competition.

To remain competitive, organizations must challenge traditional operating and financial models and reimagine strategic, operational and research-centered opportunities that advance their mission while strengthening their business models.

We collaborate with clients to address these challenges and ensure they have a sustainable future.

We combine our deep industry, functional and technical expertise to help clients solve their most pressing challenges, including, but not limited to, transforming business operations with technology;

Our Education segment clients are increasingly faced with strategic, financial and/or enrollment challenges, increased competition, and a need to modernize their businesses using technology to advance their missions.

We combine our deep industry, functional and technical expertise to help clients solve their most pressing challenges, including, but not limited to, transforming business operations with technology and analytics;

strengthening research strategies and support services;

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optimizing financial and operational performance;

and enhancing the student experience.

Huron is an Oracle partner, a Gold-level consulting partner with Salesforce.com and a Premium Partner with Salesforce.org, a Workday Services and Software Partner, an Amazon Web Services consulting partner, a Silver-level system integrator with Informatica and an SAP Concur implementation partner.

We also partner with other technology organizations whose products and services support our core industries.

applying innovative enrollment strategies;

and enhancing the student lifecycle .

Our Commercial segment is focused on serving industries and organizations facing significant disruption and regulatory change by helping them adapt to rapidly changing environments and accelerate business transformation.

Our Commercial professionals work primarily with six primary buyers:

the chief executive officer, the chief financial officer, the chief strategy officer, the chief human resources officer, the chief operating officer, and organizational advisors, including lenders and law firms.

We have a deep focus on serving organizations in the financial services, energy and utilities, industrials and manufacturing industries and the public sector while opportunistically serving commercial industries more broadly, including professional and business services, life sciences, consumer products, and nonprofit.

Our Commercial professionals use their deep industry, functional and technical expertise to deliver our digital services and software products, strategy and innovation, and financial advisory (special situation advisory and corporate finance advisory) services.

In today’s disruptive environment, organizations must reimagine their historical strategies and financial and operating models to sustain and advance their competitive advantage.

developing analytics and insights to identify the needs of tomorrow’s customers, evolve their strategies, and bring new products to market;

managing through stressed and distressed situations to create a viable path forward for stakeholders;

and providing financial, risk and regulatory advisory offerings.

OUR CLIENTS AND INDUSTRIES

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banks, asset managers, insurance companies and private equity firms;

oil and gas and utilities companies, manufacturing organizations and the federal government.

oil and gas and utilities companies;

manufacturing organizations;

and the federal government.

In 2022, we served over 2,000 clients, and our 10 largest clients accounted for approximately 17% of our consolidated revenues.

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We are focused on advancing every facet of the employee experience, beginning with the recruiting process through post-employment or retirement.

We create a personalized experience for our people and empower them to make a meaningful impact on our clients, our

communities, and one another.

We have developed comprehensive programs incorporating learning opportunities, beginning with the onboarding process and continuing throughout one’s career journey to enable the professional development of our team.

We create a personalized experience for our people and empower them to make a meaningful impact on our clients, our communities, and one another.

We have developed comprehensive programs incorporating learning opportunities, beginning with the onboarding process and continuing throughout one’s career to enable the professional development of our team.

We provide a competitive total rewards package including robust benefits that are tailored to the diverse needs of our employees and are refreshed regularly to maintain competitiveness.

Our total rewards program has continuously helped Huron to be recognized as a Best Firm to Work For by Consulting magazine, including 2021 which marks our eleventh consecutive year earning this distinction.

Our total rewards program has continuously helped Huron be recognized as a Best Firm to Work For by Consulting magazine, including 2022 which marks our twelfth consecutive year earning this distinction.

In addition to external recognitions, we monitor human capital-related internal metrics.

Our leading measure is our quarterly employee engagement score, which was consistently in the high 70s throughout 2021 compared to the Glint Employee Engagement global benchmark of 74.

In addition, we regularly review voluntary turnover across a number of key variables including business unit, performance achievement, geography, and demographics in order to assess the effectiveness of our employee development and total rewards programs.

As of December 31, 2021, we had 4,609 full-time client service and support professionals, including 168 client-serving managing directors.

Our leading measure is our quarterly employee engagement score, which was 80% for 2022 and continued to be above the Glint Employee Engagement global benchmark of 76%.

In addition, we regularly review voluntary turnover across a number of key variables including business unit, individual performance, geography, and demographics in order to assess the effectiveness of our employee development and total rewards programs.

As of December 31, 2022, we had approximately 5,660 full-time client service and support professionals, including 193 client-serving managing directors and principals.

Our client-serving employees act as critical business advisors, collaborating with clients to help solve their most complex business problems.

Our managing directors are the key drivers of growth in our business, generating revenue streams from new and existing clients.

Our managing directors also enhance our market reputation by working closely with our clients to address their most pressing challenges and ensuring high-quality delivery of our engagements.

Our managing directors and principals also enhance our market reputation by working closely with our clients to address their most pressing challenges and ensuring high-quality delivery of our engagements.

Internally, they lead the creation of our intellectual capital, develop our people, and are stewards of our culture.

Our principals, senior directors, directors, and managers manage day-to-day client relationships and engagement teams, develop our people, nurture our culture, and oversee the delivery and quality of our work product.

work product.

Our associates and analysts gather and organize data, conduct detailed analyses, evolve our culture and prepare presentations that synthesize and distill information to support recommendations we deliver to clients.

Our support professionals include our senior management team as well as those who provide sales support, methodology creation, software development, and corporate functions consisting of corporate development, facilities, finance and accounting, human resources, information technology, legal, and marketing.

Our support professionals include our senior management team, our corporate functions (consisting of corporate development, facilities, finance and accounting, human resources, information technology, legal, and marketing) and those who provide sales support, methodology creation, and software development.

These professionals provide strategic direction for the enterprise and support that enables the success of our businesses and client-serving employees.

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As part of our onboarding process, our employee experience team facilitates a robust and structured curriculum for newly hired employees.

We strive to develop world class leaders and are committed to providing programs and opportunities that achieve this goal by focusing on key leadership behaviors at all levels.

Guided by our values and Huron Leadership Principles, we strive to develop world class leaders and are committed to providing programs and opportunities that achieve this goal by focusing on key leadership behaviors at all levels.

We also provide a variety of learning opportunities, through both individual on-demand courses and virtual classroom environments, to further develop employees’ skills, including technical knowledge, soft skills, team dynamics, and coaching and developing others.

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Our incentive compensation plan is designed to recognize and reward performance at both the organization and individual level.

We take both practice and company financial performance into consideration in the determination of bonus pool funding.

At the practice level, the annual bonus pool is funded based on achievement of its annual financial goals.

Our board of directors reviews and approves the total incentive compensation pool for all practices in the context of Huron’s overall financial performance.

Individual bonus awards are based on the practice’s financial performance, individual bonus targets, and the individual’s performance as evaluated through our performance management process.

We take both business unit and total company financial performance into consideration in the determination of bonus pool funding.

At the business unit level, the annual bonus pool is funded based on achievement of its business unit and enterprise-wide annual financial goals.

Our board of directors reviews and approves the total incentive compensation pool for all business units in the context of Huron’s overall financial performance.

Individual bonus awards are based on the business unit’s bonus pool funding, individual bonus targets, and the individual’s performance as evaluated through our performance management process.

The intent of the incentive compensation plan is to differentiate rewards based on individual performance, ensuring that our top performers receive incentives that are commensurate with their contributions in a given year.

The incentive compensation plan for our named executive officers is funded based on a blend of achievement of company-wide financial goals and strategic initiatives.

Managing directors’ individual compensation levels, including base salary and target incentive awards, are set to align with the value of their expected contributions to Huron, including collaboration across practices.

As the key drivers of the organization’s success, their compensation is designed to include equity awards as a core component.

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Our benefit programs are designed to be comprehensive, competitive and personalized to the needs of our employees.

We provide opportunities that allow employees to focus and care for their personal well-being which are aimed at providing tools and resources to focus

on their physical, financial, social, and emotional health given the demanding nature of their work.

We provide opportunities that allow employees to focus and care for their personal well-being which are aimed at providing tools and resources to focus on their physical, financial, social, and emotional health given the demanding nature of their work.

In addition, our health and welfare plans, retirement benefits, and stock purchase plan provide a core foundation of security to our employees and their families.

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Huron’s value of inclusion has been embedded across our organization since our founding and is fostered in our work environment every day.

In 2020, we renewed our commitment to holding ourselves accountable by developing a five-year diversity and inclusion action plan to help build a more equitable society.

In 2020, we renewed our commitment to holding ourselves accountable by developing a five-year diversity, equity and inclusion action plan to help build a more equitable society.

Through our action plan in 2022, we continued to foster an inclusive culture, advanced diverse representation across all levels of the organization, expanded our community outreach and support, and performed a new pay equity study.

Additionally, in 2021, the strategic measures included in the annual incentive program for our named executive officers were enhanced to include quantitative and qualitative measures against the progress towards the goals outlined in our five-year action plan.

We will continue to execute and expand on our diversity and inclusion action plan in 2022 and beyond.

CORPORATE RESPONSIBILITY AND SUSTAINABILITY

Additionally, in 2022, the strategic measures included in the annual incentive program for our named executive officers continued to include quantitative and qualitative measures against the progress on the goals outlined in our five-year action plan.

We will continue to execute and expand on our diversity, equity and inclusion action plan in 2023 and beyond.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE MANAGEMENT

We are fully committed to our expanded societal role in making a lasting, positive impact on our people, our clients, our communities and the environment.

In 2021, we published our second Corporate Social Responsibility (CSR) report, highlighting the actions we have taken to support our clients, our communities, our people and the environment.

Our CSR report reflects our efforts in support of the United Nations Sustainable Development Goals (SDGs), particularly five goals that are integrally aligned with our values-driven culture and the work we do for our clients:

In 2022, we published our third Environmental, Social and Governance ("ESG") report, highlighting the actions we have taken to support our clients, our communities, our people and the environment.

Our ESG report reflects our efforts in support of the United Nations

Sustainable Development Goals ("SDGs"), particularly five goals that are integrally aligned with our values-driven culture and the work we do for our clients:

good health and well-being, quality education, gender equality, decent work and economic growth and climate action.

We have and will continue to support these goals through our Huron Helping Hands program, employee resource groups, sustainability efforts, and corporate partnerships.

As an addendum to our 2021 CSR report, we published our inaugural Sustainability Accounting Standards Board (SASB) index in line with SASB’s Professional & Commercial Services standards.

As an addendum to our 2022 ESG report, we published a Sustainability Accounting Standards Board ("SASB") index in line with SASB’s Professional & Commercial Services standards.

Our SASB index provides further quantitative and qualitative information regarding our data security programs, practices and policies, workforce diversity and engagement metrics, and our approach to promoting professional integrity and ethical behavior among our workforce, commensurate with best practices for professional services organizations.

For additional information on Huron’s commitment to a more sustainable future, refer to our annual Corporate Social Responsibility report, which includes our SASB index, and is available on the investor relations website which is located at ir.huronconsultinggroup.com.

For additional information on Huron’s commitment to a more sustainable future, refer to our annual ESG report, which includes our SASB index, and is available on the investor relations website which is located at ir.huronconsultinggroup.com.

BUSINESS DEVELOPMENT AND MARKETING

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business