Cloud CFO solution for Group Company Norman Hay PLC
“A novel technological approach to the monthly financial close that uses the best features of Spreadsheets whilst avoiding their pitfalls”
Norman Hay is a Coventry-based global manufacturing group company that appears in this year’s list of ‘One Thousand Companies to Inspire Britain’. The Norman Hay Group Finance team engaged with Synapse to automate their monthly financial close. A key requirement was that Norman Hay wanted to carry on with the use of the many sophisticated spreadsheets they had built over the years that defined their process. This article describes how this was achieved and the benefits that were derived.
Norman Hay is a Coventry-based global manufacturing group company that appears in this year’s list of ‘One Thousand Companies to Inspire Britain’.
The group’s main business sectors are surface coatings, impregnation sealants and process plant.
With circa 35 subsidiaries and divisions distributed around the world, the Group finance team has considerable work to do at each month end to produce consolidated Management Accounts.
Synapse was founded in 2012 by a British team of experienced Silicon Valley veterans. Synapse’s flagship product, Cloud CFO, automates much of the financial close for Group companies, including the production of consolidated Management Accounts and Statutory Accounts.
Based in Birmingham Science Park, Synapse customers include a global Swedish retailer and a leading UK Bank.
What is Cloud CFO?
Cloud CFO works by connecting all of the Finance Teams spreadsheets to a secure cloud database. As each team member makes a change in their local spreadsheet it is synchronised with every other spreadsheet such that one version of data is always shared. Cloud CFO is designed to remove the problems with spreadsheets whilst keeping the benefits.
What was the Norman Hay monthly financial close process like before Synapse?
Norman Hay used spreadsheets to consolidate the trial balance data extracted in disparate formats from each of their subsidiaries. This process needed multiple copy and paste operations which led to data quality risks as well as consuming management time. The large spreadsheet used for the consolidation made adding or removing subsidiaries time consuming as the many formulae involved required careful manual adjustment.
What specific problems were Norman Hay having that made them contact Synapse?
What were the challenges and their knock-on effects on the individuals involved and the business?
The main consolidation spreadsheet was a complex single point of failure which was not fully understood by members of the current financial team, given that it had been created some years previously by an accountant that had subsequently left the company. As new subsidiaries were added the complexity involved meant real pressure to get the monthly management accounts prepared in a timely manner. With today’s increasing pressure on finance teams to produce reliable numbers these types of very complicated spreadsheets make that impossible to ensure.
Why Synapse, what in particular was appealing about the solution?
Chris Sampson, Group Financial Controller at Norman Hay, contacted Synapse after reading a newspaper article describing how the company was providing a technological solution to a PPI problem for a major UK Bank. Unusually, this solution involved the automation of thousands of spreadsheets; a much larger scale problem than the one he wished to solve.
Chris was keen to stick with the Norman Hay spreadsheets, but he knew he had to eliminate the known problems and streamline the process.
The alternatives to Synapse were not attractive because his experience showed enterprise software solutions to be inflexible and costly with a high failure rate of adoption by group finance teams. Many financial analysts report that circa 30% of these implementations fail, primarily because the finance team are forced to change their business as usual processes to adapt to the new systems. A more insidious problem in his experience is the loss of the extreme flexibility that spreadsheets offer the finance team, i.e. having to bring in expensive software consultants to implement a change which could be effected by Chris in 5 minutes in a spreadsheet was not attractive.
Synapse offered a lower adoption risk; “I could see that Synapse offered an evolution of our current system leading to a streamlined version of our processes in a way that would not impact our entity finance teams in a negative way.” Furthermore, Synapse offered to implement their Cloud CFO solution in parallel to the current manual system so that Chris could see a complete replica of the manually generated accounts produced by the automatic system.
How has Cloud CFO benefitted the Norman Hay team?
Chris says the immediate tangible benefit is the management time saved and the correspondingly faster time to reliable accounts. Group CFO Nick Ogden FCA sees the removal of a single point of failure and consequent risk reduction as a principal benefit. The local entity financial controllers have all adapted well to Cloud CFO as they are able to stay with their familiar spreadsheet interfaces.
“We haven’t had to face the challenge of bolting more spreadsheets on and we can be confident that we have the checks and balances in place to tell us what is and isn’t working… The monthly close process has been reduced by 3 days, from 13 to 10.”
– Nick Odgen, Group CFO