James Craner, FD of Curver, tells Richard Crump how the FMCG business is seeing real business benefits from moving its modelling and forecasting operations to the cloud
What prompted you to move your ERP to the cloud?
By the end of 2016, we will have doubled the size of the business in five years. We want to understand the profitability of the business by customer and by product, so it is very granular.
Why were the old systems unsuitable?
We were using spreadsheets to first of all drive sales forecasting, which went into our production planning system, and we were using spreadsheets to drive the rolling forecast process. Because of the complexity of the business – we have 750 SKUs (stockkeeping unit), and work with all the major food and DIY retailers – the process took days. We would have the sales people fill in the spreadsheets, submit that to the production scheduling team who would consolidate all those, take that data, and load in into our APO. Finance would have to authenticate a copy of that spreadsheet and put it into our financial planning system. If we wanted to make a change, it would take two days to get those changes through and see what the impact was on sales and profitability.
What greater insight do you derive from moving to the cloud?
We had an in-house system that allows us to see the past by customer and by SKU. I am more interested in planning.
But what does that mean in practice?
We have a plastic injection moulding business and we share those moulds through other business units. One of the sales people wanted to run a promotion for one of our DIY customers for our slim bin products, which is a new product made at our sister plant in Luxembourg. We weren’t making any money, but when we ran that through our model, we found it was because of the freight and distribution cost. Within a matter of minutes, I was able to calculate that we could save £70,000 by moving production to the UK.
Have there been any unexpected benefits?
You know something is working well when it enthuses people within the company for reasons you didn’t anticipate. I had a marketing manager come and say, ‘Can you produce a report that filters revenues being forecast for sales of less than 1,000 units over 12 months? I can use that to reduce the number of SKUs we have.’ We could get rid of inefficient runs. ?
Ivan Higgs, financial controller at Story Homes, tells Richard Crump how moving its ERP to the cloud is supporting its move to become a national house builder
What challenges did your reporting processes pose to the business?
We were quite a small business and had no real reporting. We had the quality in place but didn’t have the reporting to get to the level wanted. We had lots of different spreadsheets here and there that weren’t giving us what we needed.
Why didn’t they give you what you needed?
The big problem with having lots of different spreadsheets is having lots of different users and then lots of formulas that don’t flow through properly. Some people like to show how clever they are and you start wondering – while the spreadsheet looks great, it doesn’t actually mean anything.
How did moving to the cloud change this?
It allowed us to create a fast, dynamic set of reporting that we could continuously change, amend and update as the business grew. We have grown from 152 houses a year to 550. What we needed was fluid updated reports. Now we only have one set of formulas, one data entry point. We can manipulate that data and report it from one data source and that’s the best thing about it. It’s Excel on steroids in that it allows you to have extra control while having the flexibility of Excel.
What do you use it for?
We use it for our weekly sales reporting, where we are with the build of those products, and we also use it for our month end and management accounting reports. We import the data from our core finance system into the system and get our set of management reports from there. From there, we start our KPIs – things like payment percentages – and go into further details of what our sales were for the month compared to our business plan.
We also generate a big sales build tracker, which has all the plots for a particular site, where the current build stage is, where we are with planning and – on completion – whether the plot has been built on time. We have also started using it to find out how much we are expecting to pay in commission for a sales executive.
Where do you go from here?
We are going to start regionalising the business so that we can become a national house builder. That means we need a bit more structure so we can have lots of different finance managers in each region who can plug into that particular region and roll up to the group financial controller. ?
Curver and Story Homes are both Anaplan clients