Finance is changing. The financial crisis, together with the rise of big data and the increasing influence of social and digital media, new technologies and economic realities have completely changed the way finance departments operate.
Disruption to business models, expanding global operations, tax complexities, evolving regulation and new risks are all demanding more of finance departments.
Take the case of Cape PLC, a UK-based international leader in the provision of critical industrial services principally to the energy and natural resources sectors employing approximately 16,100 people working across 23 countries and with a reported revenue of £863.5 million.
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With the pressures of success, a multinational operational footprint and a diversifying services offering, Cape’s management felt the company’s multiple finance systems were in need of an upgrade.
For years, Cape PLC had been managing its multi-country management reporting and month-end close process using a decentralised and fragmented collection of more than 13 ERP systems.
While the disparate systems could provide the information needed for reporting, the man hours required to consolidate country and regional numbers were on the rise. The system was not keeping up with the demands of speed and scalability that the finance team needed.
As a listed company on the London Stock Exchange, Cape is required to produce detailed financial information in a timely manner. International growth and increased investment have intensified the need to collect and consolidate financial data from around 20 countries, manage multiple currencies, analyse foreign exchange differences, and assess associated risks.
“Month-end under our previous system was taking ages to complete,” said Chris Baker, Cape’s head of management Information and Reporting, “Despite all the investments around the company in ERP technology, the consolidation at group level remained a manual process which took roughly 2-3 days per country.
“We were reliant on a few individuals in the consolidation team and that made it difficult to analyse data or accurately assess on any given day how we were doing against performance targets at a [group/consolidated] level,” adds Baker.
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“We really felt like we had reached the limits of what we could do with our old systems. We needed a solution that would automate and simplify month-end processes, and give us one source of information that could be shared across the company.”
Enterprise performance management – a single version of the truth
After consulting internal stakeholders, in August 2013 Baker and his team settled on the need for a single system to manage the monthly close, budgeting and consolidation process across the enterprise. Cape also wanted to build shared skill-sets across the regions and consistently achieve a timely close based on accurate information.
That would allow the finance function to raise its game in terms of management reporting, and provide more meaningful insights into the business to support Cape’s planning and future growth.
“We understood the need to move to a comprehensive system,” said Baker. “Making us faster was a core requirement but we also needed to provide a more detailed picture of the financial health of the organisation, and help the business make more informed decisions.”
To support these requirements, any new system would need to be able to consolidate submission data from a number of geographically diverse subsidiaries in multiple currencies, expedite the reconciliation process, and provide group monthly management information.
They also needed to support decentralised financial processes at worldwide level, and unify the finance function on a single IT platform.
Once the finance team at Cape had agreed requirements, it became clear that they needed more than a simple budgeting or consolidation system. With this in mind they began to look at solutions offered by enterprise performance management vendors. “We used Gartner’s Magic Quadrant to help select leading solutions, then created a shortlist of four potential vendors for evaluation.” said Baker.
Putting each to the test with multiple business requirements, Cape selected the CCH Tagetik corporate performance management system, and began a phased rollout to give each region time to adapt and implement new processes.
“We were immediately impressed with the chosen consolidation package,” adds Baker. “It was fast, flexible, and the others seemed clunky and labour-intensive by comparison.”
Once the vendor had been chosen, Cape needed a partner to implement it. Having successfully completed more than 50 Tagetik implementations in the UK, EOH UK was recommended to Cape by the vendor’s sales team. The business and cultural fit between both companies became apparent very quickly.
“One of the other things that we liked about working with them is that they set out from the start to make us as self-sufficient as possible. They clearly wanted to implement quickly and leave us with the knowledge and skill sets to configure and manage the system independently once the heavy lifting around deployment was done. Trust was established very quickly and we really felt we could rely on them.”
Since deploying the new solution, Cape’s financial processes are much more streamlined and standardised. Countries now have standard templates that allow them to update their data during the monthly, quarterly or annual close processes, resulting in greater consistency across statements.
Cape has also improved the speed and depth of its reporting processes, from ad hoc reports and detailed line of business views to consolidated financial statements.
They are now calculating all KPIs in the system, speeding up evaluation and measurement of progress. By creating one repository for financial data, it can also rely on a single version of the truth being shared across the company in its internal and external reports.
“I’ve lost track of the number of man days we’ve saved since rolling out the solution,” said Baker. “We were impressed by the calibre of the EOH UK people and what the solution has been able to offer. The value-add to our consolidated close has been impressive and we still rely on EOH UK for advice and insight on getting the most from our EPM and ERP systems.”
Sourced by Rupert Madath, delivery services director, EOH UK