(c) American Institute of Certified Public Accountants. Contact AICPA for permission to reproduce this article., Fintech

Lessons from a finance system implementation

SweetTree Home Care Services faced a number of key decisions and challenges in upgrading accounting software to accommodate growth. Here’s what it learned.

By Sarah Ghosh, FCMA, CGMA

In the summer of 2018, SweetTree Home Care Services came to a crossroads.

For nearly 15 years, SweetTree had built a successful business providing high-quality care and support for individuals at home and in the community across London and other parts of the UK. In the process, the organisation, which has more than 500 employees and revenue of £9 million ($11.7 million), has helped to make living at home possible for more than 10,000 clients, many of them elderly and some facing challenges such as dementia, neurological conditions, learning disabilities, and brain injuries.

Over time, SweetTree established a training academy and a social enterprise where individuals with physical and social challenges could gain skills through participating in a variety of farm-related activities. The organisation’s leaders then saw an opportunity to provide a different kind of service to clients focused on the use of technology. Specifically, SweetTree wanted to launch another business, SweetTree Connect, to provide a connected technology-assisted independent living service with the aim of transforming the life experiences of people living in the community. As finance director, my job was to help make that dream a reality.

One of the most important decisions we had to make was regarding our accounting software. Would the current system suffice, or would we need to move in a new direction? Blessed with experience implementing finance systems in larger organisations, I was comfortable taking a lead role and guiding the finance team of five people on the journey. This article recounts our trek to a new accounting software solution — giving you a prime seat for an adventure marked by pivotal decisions, unexpected challenges, and lessons learned.

The goal of this case study is to help other finance leaders guide their businesses through similar major technology investments. While this article highlights the vendors we used, the lessons learned could be applied to working with a variety of vendors when approaching a similar project.

Choosing the software

The project began in July 2018 with a review of our existing accounting software to evaluate whether it could take us to the next growth level, enhance our customer service, and support SweetTree Connect, which would operate on a different business model than SweetTree Home Care Services.

We also were keen to move to a cloud-based solution that would remove the need for hosting on-site, provide easy remote network access to employees, and supply a richer level of financial reporting to support business decisions.

When we factored in our goals for growth and operational efficiencies, our project team realised that we needed to either upgrade our current accounting package or implement a completely new one.

“In our world, finance is a business-critical function,” said Barry Sweetbaum, managing director of SweetTree Home Care Services and SweetTree Connect. “Hence we required a finance software solution that could grow with us and give us the flexibility to manage different business models, such as SweetTree Connect.”

We ended up considering five accounting solutions, which included one from our existing provider.

It was challenging to choose. A lot of smaller accounting systems would have fitted what we needed at the time but did not demonstrate that they were scalable with the development road maps to support SweetTree’s business diversity and desired growth. We wanted a solution that would pull all our management information into a unified environment and give us “one version of the truth”.

Another driver in the decision was the number of people on the team. One person had moved on before the project began, and our research indicated that the system would save the team enough time in the long run that we did not have to replace that role. In the short term, the team faced the challenge of completing project tasks and fulfilling existing operational responsibilities despite being a person down.

We weighed the following expected benefits in evaluating the five accounting platforms:

  • Great reporting capability, including the flexibility to slice and dice financial information in ways to provide insights for making business-critical decisions.
  • Streamlined processes that reduce non-value-add activity such as paper filing, spreadsheet reconciliations, and manual collection of late payments.
  • Increased financial control through workflow approval levels, providing full audit trails.
  • The capacity to support a growing business and changing processes.
  • Audit trails on all supplier and client interactions.
  • Opportunity to expand end-to-end processes through further module integration.
  • A completely cloud-based solution, freeing up on-site server capacity.
  • The ability to move the invoicing for SweetTree Home Care Services from our operational scheduling system to the new system, allowing us to keep financial transactions in one place for ease of debt collection and management. This was especially important.

After careful consideration of our five finalists, we selected Oracle NetSuite. Though priced higher than our existing system, NetSuite brought quantifiable current and future benefits relating to simplified automated processes and support for SweetTree Connect. In addition, we would no longer have to devote IT time to apply upgrades to the old system and resolve any issues with these.

Plotting a path to installation

The SweetTree project team lacked the technical expertise and time to implement the new system without assistance. We considered hiring an independent contractor, but we found few available with the necessary skills for this installation. In addition, these contractors charged rates on a per-day basis, opening up the risk of exceeding the budget if the project overran.

We engaged with a couple of implementation companies to give us some initial quotes, but we weren’t comfortable with their price tags or their ability to meet all of our project goals. We also asked NetSuite for guidance, which led us to one of their alliance partners. After a number of discussions about approach and after speaking with one of their clients, we decided to work with a company called AzroNet. Its team specialised in NetSuite, and they could work both on-site and remotely as needed, a level of flexibility the other potential providers didn’t offer. (See the sidebar, “Best Practices for Accounting Software Installations”, below, for tips from AzroNet’s director for companies implementing enterprise resource planning and financial systems.)

Another key driver in the decision was our desire to reroute invoice generation from our operational system to the new accounting system. Due to the complexity of how we bill and invoice our clients and funders, this is not standard within the package. AzroNet agreed to carry out bespoke development.

Planning for success

We followed a structured approach to the implementation, working to an overall plan provided by AzroNet that outlined the key milestones. I also had a more detailed task/resource plan to manage the delivery of each milestone. We divided the billing and invoice development timeline into sprints based on business criticality (see the graphic, “Sprint: Overview”). Sprints 1—4 were essential for transitioning to the new system, while sprints 5—7 added desired capabilities not required for the new system to function. The amount of time required for each sprint varied depending on the complexity of each development piece, the names of which are listed in the graphic.

To guide the initial set-up, we were required to fill out a business requirements document. Following an intense workshop with AzroNet to discuss key elements of the configuration, we were provided with a template to set some initial parameters. This document was revised over time as the implications of what we had asked for were better understood.

Sprint: Overview

Challenges, solutions and lessons learned

Our careful planning for this project did not prevent us from encountering many challenges, which caused delays. Following is a look at several challenges and our solutions for each one.

Data cleansing

Challenge: Like many companies, we had data that were not in ideal shape. Although we would like to have started with our data being 100% accurate and up-to-date, we knew that daily operational priorities would prevent us from achieving this. We had already spent a considerable amount of time reviewing our source data and historical transactions prior to starting the project, so we were aware of the potential risks of not updating or correcting all of the data.

Solution: Given what we already knew, we decided to set some parameters in terms of level of detail and history on what we needed to transition over to the new system. We then focused on making sure the data to transition were reasonable and gave ourselves four weeks to complete the transition, concentrating on data elements that were critical to ensuring that we could produce essential financial reports accurately.

Data migration

Challenge: We had to decide how much data we wanted to migrate and what needed to be in place to ensure a seamless transition. Initially, across all our companies, we identified 30 different potential data loads, such as our core client and supplier information, open invoices, and debtor balances. We also had to ensure that the necessary accounting entries were set up correctly as part of the migration.

Solution: As we learned more about the NetSuite configuration, we decided to migrate 13 files that were on the original data migration plan and apply some data directly into the new system ourselves. We would still be able to access our historical data after the installation, so it was not business-critical to replicate all transactions in the new system. Over time, our need to reference the existing system would reduce.

Data loads

Challenge: Even after installation, the finance team would still have to import key data monthly. The monthly data loads would come from bank transactions for reconciliations, payroll data to capture people-related costs in our reporting, and expense transactions from our cloud-based app for expense analysis.

Solution: We understood the process of setting up the mappings needed to import data through the data migration, but the team still needed support in setting up the import templates and mapping fields correctly. AzroNet provided us with training on importing data, and we were able to use live examples to test. The first live run required some rework as the team became more familiar with mapping the data. We now have the capability to build our own import templates.

Segmentation

Challenge: The building blocks for the new system are very different from our previous accounting system. NetSuite is based on segmenting data across a number of elements, which allows many alternate views of the same transaction data, rather than the rigid code structure view that traditional accounting systems employ (thus enabling comprehensive and effective financial analysis). This was a new concept for the team and required some thought on how best to implement it in order for us to get the richness of reporting we desired across all of our companies.

Solution: AzroNet helped us define what would give us the reporting capability we needed to support our business structure at the business requirements stage. As we understood more about how the segmentation worked, we were able to refine it to ensure we had a final structure that would work for us now and in the future.

Chart of accounts

Challenge: The growth of SweetTree’s suite of companies has created several chart-of-accounts structures, which did not facilitate ease of reporting.

Solution: Migrating to a new system gave us the opportunity to rethink our P&L structure and to consolidate this across all our companies. We had to undergo a mapping exercise that required some dedicated time and effort from the team. With AzroNet’s support we were able to set up a structure that gives us the automatic consolidation of financial information and the reporting formatting we required.

Bank reconciliations

Challenge: We were burdened with a manual process for bank reconciliations. We wanted to automate this as much as possible and go paperless. The new system can fully automate bank reconciliations, but we chose to start with a simpler approach, due to capacity to implement, and to add the integrated banking module later to get the full end-to-end process automation. Another challenge was that during the project NetSuite enhanced the reconciliation functionality, resulting in some glitches that required additional time to resolve.

Solution:We worked with AzroNet to understand and test the impact of the changes and automated the process as much as possible. The system is now able to automatically match 80% of our bank transactions.

Vendor support

Challenge: NetSuite offers a range of support options with different cost implications, but we didn’t know at the beginning of the project exactly what support we would need in the future.

Solution: NetSuite’s extensive online help and resources were easily accessible, and with our consultant able to guide us through how the new system worked, we opted for only NetSuite’s online support package. The decision led to delays. AzroNet required vendor support to resolve technical issues generated by recent enhancements. The NetSuite support to technical queries on our account was by email exchange and ticketing, rather than immediately on the phone. We would have gone for the higher level of real-time support if we had realised at the outset that some of the NetSuite enhancements would require resolution.

Test environment

Challenge: We had to make a decision on the length of time we would need the test environment, the sandbox, to fully test the bespoke invoicing solution our consultant was delivering.

Solution: Our initial plans called for our bespoke invoicing solution to be completed in four months, so we agreed with the vendor on four months’ access to the sandbox. In the end, we had to extend this on a month-by-month basis, which had a cost implication, to enable the invoicing solution to be fully tested.

Implementation partner working remotely

Challenge: Not having the AzroNet team permanently on-site during the critical stages of the project did introduce some risk.

Solution: We had weekly project calls to review progress against the overall high-level plan and to discuss specific problems and their resolution. We also had a number of dedicated site visits by AzroNet consultants, which really pushed forward the team’s understanding of how the system worked and provided direct access to resolve questions about what was asked for in the business requirements document.

Dunning

Challenge: The finance team had to manually chase invoices via email and telephone each month — an activity that caused problems because of its resource-intensive, ad hoc nature.

Solution: The new system was able to offer dunning functionality with the automatic sending of reminders at set time intervals. However, we did encounter another challenge with this as, during our project timeline, NetSuite introduced a different process for set-up. This delayed the implementation of the dunning functionality by three months, as the impact had to be assessed before we could install the module and carry out the testing.

Results and lessons learned

We recognised at the outset that we would not be able to support go-live on all four SweetTree companies at once, given operational priorities and resource constraints. We built in a four-month timeline to get all companies transitioned and the bespoke invoicing solution in place. This was an ambitious schedule, especially because of the technical complexity around the billing and invoice process.

What helped us with the timeline was that we were able to transition a smaller company first and resolve any teething problems before we then focused on the larger companies: SweetTree Home Care Services and SweetTree Connect.

We wanted all companies switched to NetSuite before Christmas 2018, so we focused on this as a priority. However, the bespoke development on the invoicing was so complex that AzroNet required more time, so we decided to defer this until June 2019.

We had already mitigated the risk of the invoicing solution being delayed by ensuring we had a workaround to enable us to continue invoicing from our current operational system and importing data directly to the new system.

The changes NetSuite introduced on the banking reconciliation and dunning functionalities unfortunately did delay our timeline. We had no visibility of NetSuite’s development pathway to be able to mitigate this risk at the time of defining the implementation dates.

The overall outcome was that we went live with one company per month in October and November and two companies in December 2018, with the bespoke invoicing solution still in testing as of this writing.

Final assessment

Our objective was not to get to our destination in the shortest time, but to go at a pace that was realistic for the team and the business as a whole. In that light, two big lessons learned emerged.

First, we could have arrived more quickly if we had in place a full-time project manager to work directly with our consultant and to ensure all risks were being managed. More focus at critical points of the implementation would have reduced the timeline. “The smoothest and most effective implementations are those that have strong organisational buy-in; ensuring continuous support from the management team and appointing a dedicated internal change manager is essential,” said Thomas Sutter with the NetSuite Global Solutions Centre of Excellence.

Second, as we were unfamiliar with NetSuite at the start, we devoted more time than needed on defining the use cases and testing. The new system’s flexibility allowed us to operate in a live environment but be able to make changes as and when we needed to.

The implementation of the new system has given us what we were expecting to achieve. We now have a system capable of supporting the growth plans for both SweetTree Connect and SweetTree Home Care Services. Even better, the new system has more capabilities than we realised initially. We now have a tool to try out “what ifs” as we continue to streamline our processes and focus on the value add of what we are here to do. For our finance team, this is an exciting place to be.

Best practices for accounting software installations

John Wynn, FCMA, CGMA, director of project consultant AzroNet, shares tips companies can use when implementing enterprise resource planning (ERP) and financial systems.

Getting ready

  • Clearly define why you are implementing the ERP/financial system. What are the objectives? What will you be able to do better?
  • Communicate to the entire user community so there are no surprises.
  • Make sure the whole team can see the vision and advantages the implementation will bring. Keep that enthusiasm alive.
  • Document and communicate the scope — and try to stick to it. Defer extras to a second phase.
  • Do a thorough selection exercise to ensure that the product actually does what you need.

Setting out

  • Hire an experienced implementation team that knows the product well, has business expertise, and fits with your culture.
  • Stay in the same boat. Make sure the senior sponsors and users all agree with the objectives and the timeline.
  • Avoid a “big bang”; identify phases with clear deliverables and tangible results.
  • Create a clear and visible task plan — and be prepared to flex it.
  • Assign a respected internal senior person to be the responsible focal point.
  • Make sure there is a budget contingency to ensure you can cover the cost of extending the test environment usage if there are unforeseen overruns.
  • Allocate time for dedicated training; otherwise, this may cause you problems further down the line.

Staying on track

  • Give it attention — make sure that the in-house experts, especially the business process leaders, have enough time to participate. Backfill the resource if you have to.
  • Formally review progress every week without fail.
  • On day 1, start analysing the data that will be transferred; it is not too soon.
  • Recognise that your existing data will have many errors and a big cleanup is inevitable.
  • A new ERP/finance system is a great opportunity to review your chart of accounts and financial segments; make the most of it to get business information that adds value.
  • Don’t go overboard loading historical data; summaries and period-end balances will normally be adequate.
  • Encourage your in-house team to dive under the hood — start to learn the details about how the new system works.

Sarah Ghosh, FCMA, CGMA, is finance director of SweetTree Home Care Services, which helps to make living at home possible for more than 10,000 clients in the UK. She also is a CIMA Council member and a board member of the Association of International Certified Professional Accountants.