Case study: Challenges faced before introducing Anaplan
Author: Jonathan Cushing is a Certified Master Anaplanner and Senior Consultant at Vuealta Consulting.
My first experience of Anaplan was building an FP&A model in the company I worked in group finance. The company operated within the construction sector all over the UK with regional offices along with a centralized group reporting team. Each regional office had its own finance team who would collate contract level forecasts in excel to produce their own forecast that were aggregated at regional level submitted to the central team. The central team were then responsible for producing the group level forecast along with a quality assurance responsibility over the submissions from the wider business.
Prior to implementing Anaplan
The monthly reporting and forecasting process was done in Excel; each contract or building site would have its own spreadsheet that would link to a regional set of accounts and each regional team would be responsible for its own forecast model that would link to the accounts and contract level spreadsheets. Each region would have approximately ten live contracts or building sites at any one time, meaning the master excel files were linked to at least another ten files.
The issues with this process are easy to guess — there were significant problems with version control, the spreadsheet models could be slow to open, the files plus the numerous versions took up significant amounts of space on the drives. Every time a change was made at any level within the organization, the links would need to be changed on the central spreadsheet and then the integrity checks re-done on the master spreadsheet. The Excel environment made it easy for formulas to be changed, hard-coded numbers to be inserted, etc.
Reporting was all done via Excel — this had its advantages in that it was flexible, and new reports could easily be created, but this was also disadvantage in that it led to inconsistent reporting across the company. Additionally, in an Excel environment it was difficult to enforce deadlines and ensure numbers were truly locked down.
Benefits of implementing Anaplan
The Anaplan implementation from start to the point the Excel files were finally turned off took around 18 months, and it is only when you reflect do you appreciate the transformative benefits. It wasn’t just the time saving, Anaplan standardized every region’s process, and it made deadlines enforceable and version control simple.
The introduction of Anaplan shortened the monthly reporting and forecasting process by around five days — a significant amount of man hours when you consider the amount of people working in Finance across the organisation. This time saving meant a detailed forecast was done every month rather than every quarter as was done previously. The advantage of this being that senior management could identify the problem contracts much earlier and had more time to intervene.
The time saving didn’t mean lower staff numbers, but it gave more time for the value-add work. The central month end process shifted from trying to prove the numbers were correct and had been aggregated in the right way to explaining why the numbers were the way they were and challenging the regional team’s forecast. That seldom happened in the Excel environment as the central team were working up against the reporting deadline to complete their work.
Business as usual
The reporting capability of Anaplan quickly became taken for granted. For example, given the hierarchical structure of Anaplan it was simple to produce a report that displayed sales by site and added up to the company total, something Anaplan users will think completely trivial. In the legacy environment this meant extracting numbers from ten spreadsheets and having to manually redo the report whenever a number changed along with a reconciliation exercise to ensure the sum of the parts added up to the total.
The what-if analysis capabilities of Anaplan really came into their own during the pandemic. When cash was tight and work on construction sites in the UK stopped for around six months, the business was faced with questions such as which 80 sites out of 100 should start working on first to generate the best short-term cash return. This question would have been almost impossible in Excel, but the Anaplan model, with some modifications, we could answer.
Despite the benefits Anaplan brought, it was frustrating to find colleagues who were focused on its limitations and were quick to forget how things were in the old Excel world. For example, every company will have certain contracts that are different to its standard contract or new contracts that need to be built out quickly in Anaplan. Development of a live reporting system is slower than modeling in Excel because of the governance around it.
Lessons learned and challenges faced
The implementation wasn’t without its challenges; it is natural for people to want to preserve an old way of working particularly when Excel is a system everyone knows how to use. The change management aspect of a project implementation shouldn’t be underestimated, there is a natural mistrust of a new system particularly when decisions have been taken centrally in an organization that affects the wider business.
Early in the project it was definitely a case of things getting worse before they got better. There was a period of parallel running that effectively doubled the work load and the two processes had to be reconciled to each other. It took a long time for the old spreadsheets to be turned off and this meant proving in great detail to the company’s leadership team that Anaplan was accurate and correct.
It was hard to follow The Anaplan Way and deliver something quickly that the company could benefit from, and this was because of the aggregation nature of reporting, every contract needed to be correct for the totals to correct. With hindsight an early delivery would have helped with the battle for hearts and minds and the change management.
Anaplan was undoubtedly transformational, but for the people involved it is only when you take a step back and reflect that you realize this. The company went on to build several more Anaplan models and they were received a lot better than the original FP&A model. I think the reasons for this were that they were delivered much faster and Anaplan had a better reputation within the company after the FP&A model was fully integrated.
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Check out my other article in Community: Anaplan for housebuilder and construction forecasting.