What was Pirum looking to improve that led you to implement IBM Planning Analytics?
Our business effectively offers our services on a subscription model, where clients pay a fixed fee per month. That’s good because our revenue is very stable, but in order to grow, we need to be able to create new products and services and upsell them to both new and existing clients. Over the last 5 years, the business has grown rapidly, with revenue doubling and staff numbers increasing from 20 to 90.
As a fintech, to grow we invest in people—technical staff to support existing products and build new ones, client service staff to support existing clients, identify new client requirements and selling into new clients. Finally, we have support services such as Finance, HR and Legal. It’s vital to understand the value that each person is delivering, so that we can decide which projects and products to invest in and report to our private equity owners.
Before we started this project, our financial planning and analytics (FP&A) processes were built on a complex, spreadsheet-based model. As the business developed in size and complexity, it became increasingly difficult to manage FP&A within a spreadsheet model and there were always certain things we couldn’t do. For example, there was no role-based access control, so we couldn’t let individual managers access the model directly to view their own figures. That meant our finance team spent a lot of time answering questions from the business, instead of giving them the ability to get the data for themselves.
Version control was difficult too, because we relied on people sticking to file-naming conventions. There were also some routine jobs that were unnecessarily laborious, for example, copy-pasting data from the spreadsheet into our board pack every month. All those manual processes are not only inconvenient, they also introduce the risk of errors, so we wanted to automate as much as possible.
What triggered you to start the project when you did?
Our year-end is in March, and of course we need to create the next year’s budget before year-end. We needed to have a new system in place by March at the latest, or we’d have to wait another year.
We researched the options, and IBM Planning Analytics was the most appealing—partly because it’s part of a comprehensive portfolio of reporting and analytics software which we could potentially integrate with in future, and partly because of the people. The implementation partners we met at IBM events were genuinely interested in our business, and really made an effort to understand our requirements.
The team from Aramar was especially positive, and they were fully confident that we could deliver a solution with IBM Planning Analytics within the time available. In turn, that gave us the confidence to move forward, despite the very challenging deadline.
And what did you do?
We worked with Aramar to scope out the project and begin building our new model in Planning Analytics. Due to the time pressure, we cut the scope for phase 1 down to about 80 percent of what we wanted, delivering the must-have features first and postponing some of the nice-to-haves into phase 2.
Making those compromises is hard, but it’s a key lesson when you need to deliver quickly—start small, always have a backup plan, and get your stakeholders involved as early as possible to make sure you know what’s absolutely vital to deliver, and what can be done later. It’s also important to consider whether you can invest internal resources in the project full-time—if you can, you can move much faster than if everyone is trying to do their normal job in parallel.
One of the things that can help is Aramar’s Fast Financials solution, which helps by pre-configuring some of the initial dimensions and settings out-of-the-box. That’s important, because although Planning Analytics is very flexible, it does expect you to build a lot of things from scratch.
Did you get the improvements you expected?
We’re definitely getting there! By the end of phase 1, we are able to produce different versions of the budget that we’d never had before. For example, we can see how much of our labour costs can be capitalised, and how much cannot, which helps to calculate the annual rate of return—that’s a very important metric for our private equity owners. We can also analyse different what-ifs—for example, if we move one of our developers to a different role, how does it affect the EBITDA?
The new model is also much more transparent and explainable—you can make changes without worrying about breaking something, which was always an issue with the spreadsheets. Via this tool, managers are more encouraged to get involved in getting to know what numbers mean and by playing different scenarios such as different allocation of projects or start date, they will see the financial implications right away.
Before Planning Analytics, I was spending 80 percent of my time processing numbers, and only 20 percent answering questions for the business. Now it’s about 50-50, and as we build more user interfaces to enable managers to get information for themselves, we should have much more time to focus on the value-adding activities.
In addition, with Planning Analytics in the Cloud as well as being available as an add-in inside spreadsheet, it offers the best of two worlds, i.e. all stakeholders can work on the same business model at the same time and Excel lovers can carry on extracting the most updated information in their familiar environment.
What is it like working with Aramar?
Aramar really understood what we were looking for, and their consultant Lindsey is great to work with. The Aramar team has a real can-do attitude, which gave us the confidence to move forward with the project, and they have the skills to back it up.
What’s next for Pirum?
One of the most important items for phase 2 is integration—we want to get the data flowing directly from our Oracle NetSuite ERP system into Planning Analytics, which will make the whole process more robust and automated.
We also focused mainly on profit and loss in phase 1, so we’re looking forward to bringing our balance sheet, cashflow and revenue analysis up to the same level. For example, we’d like to link our sales pipeline into our revenue forecast, which will give us a lot of extra intelligence in our forecasting process.
I’m looking forward to working with Aramar again as we start phase 2 and getting deeper into what Planning Analytics can do for us.