Reliable management information key to successful operational changes and performance improvement
With a reliable finance system at the heart of its operations, Seafield is perfectly placed to meet its five year growth targets... In fact, the system has been the catalyst for much of the change not bad for a piece of software!
Seafield Logistics Ltd has big ambitions. With plans to grow its turnover from 32 million to 100 million within five years, significant operational change is required. This change includes overhauling the companys operational systems, and, according to its managing director, Mark Strong, it is well underway.
Strong became managing director of Worksop-based Seafield in January 2003 and has seen the company through some difficult times. But Strong admits to date we have had to be too focused on the day to day running of the company and unable to stop to look at the bigger picture and how we could improve processes for the good of the entire operation. In 2005, Seafield decided to hire external consultants to do an audit of the company to give it a basis to start from. Telephone and face to face interviews were conducted among existing customers, potential customers and the consultancys own contacts and the conclusions came as no real surprise. The findings reconfirmed what we already knew, but gave us a sound and accurate basis for our five year change strategy, says Strong. The audit pointed to problems with our IT systems, the need for more value-added services and structured account management teams and a problem with customer perception and brand recognition. We are now addressing each of these issues.
Seafield Logistics provides warehousing and distribution services throughout the UK. One of the first problems that had to be addressed was the lack of accessible management information. Much of this was down to archaic, non-integrated finance, warehouse management and traffic management systems which were expensive to maintain and support. We struggled to access business performance data without a lot of manual intervention which meant that the information was often doubted and always had to be checked, by which time it was usually too old or too late, says Strong. Not a good basis for making critical business decisions.
According to Strong, producing management reports across its five separate companies was time consuming and the way they were delivered made it difficult to observe trends and make changes to the business structure accordingly. The information contained in the reports was always out of date and weekly reports were almost impossible to obtain from the systems. Our finance team was spending hours and hours compiling information, he says.
Finance at the heart of operations
With finance central to smooth business operations, Seafield decided that was the place to start and it would build its operational systems outwards from there. CODA impressed us during the sales process as we felt they really understood our issues and vision for the future, says Justin Hunt, IT Manager at Seafield. They proved to us that their Financials product was flexible enough to meet our requirements and they demonstrated how the system would help deliver new standards and total vision across the business. CODA-Financials is designed with strong integration capabilities and we are now able to integrate all our new business systems, based on Microsoft SQL Server, to help deliver financial transparency across the entire business. We have already integrated the software with our transport management system, HR and payroll system and the warehouse management integration is next on the list. The whole implementation was incredibly smooth, and the system offers little or no cost of ownership to the IT department.
In just a few months, Seafield has rolled out the system to much of the business and has witnessed some significant operational changes as a result. Information is more reliable which has helped make the management team more confident when talking with customers, suppliers and other parts of the business. The business is recording more useful information than ever before enabling them to track individual vehicle profits and reconcile revenue on distribution in just a few hours which they struggled to do before.
Supplier and customer relationship management
The companys procurement processes have also been overhauled which is saving a lot of time due to the minimal number of back-end queries. We have control of suppliers which weve never had before which has prompted a whole new supplier management programme, says Strong. Weve noticed that the CODA software is helping inject discipline into the business around the correct purchase order procedure for example. We can measure supplier performance against order fulfilment and invoice accuracy. We are making quicker, more informed decisions based on accurate information which we can access in a matter of seconds.
Seafields operational changes have included the introduction of key account management teams. The customer is measured in financial and performance terms separately and they are appointed one key account contact to deal with any issues relating to the trading agreement. The idea is that this will foster closer customer relationships.
CODA-Financials helps support this structure as the system is set up with a key account element in the chart of accounts. This means each customer and account manager can be analysed on financial performance so in theory Seafield can measure profit from customers and see how well the key account structure is working.
Making managers accountable for raising standards
Seafields big endorsement from the new system is that it has empowered managers to take responsibility for how their part of the business is performing which is in turn raising standards. The system is browser based and can be accessed by our managers from any location through secure VPN facilities, says Hunt. They are more accountable for their financial performance as they can see information in real time, having this quick and accurate data which allows for the right decision to be made at the right time can make a real difference to operational profits. CODAs support desk is excellent too so users are happy to pick up the phone and resolve issues without the need for the IT team to be involved
Something that has really added value is CODAs e-Assets add-on, Hunt continues. Weve never had the ability to account for assets in this way before, but using CODA for managing owned assets and lease agreements allows effective control and planning. We can see when a piece of kit is coming to the end of its life, so we can plan our borrowing requirements with the bank (which helps build a better relationship there), and it means we have more time to look around for the best replacement.
Supporting future expansion
At the time of writing this case study, Seafield was being audited. But thats no problem for us now, Strong says with a smile. We are confident we can produce an audit trail to any information they require using the CODA system.
He concludes: We are keen to recommend CODA to other companies with similar accounting issues. Our finance department has changed beyond recognition since we put the system in. Staff are happier now there is less fire fighting to do and they have time to spend on business analysis and future projections rather than number crunching. Im not exaggerating when I say the software has revolutionised our management accounts and it is scaleable enough to grow with us as we get closer to our goal of a 100 million turnover. We plan at least one more acquisition in the next four years, and the right finance system means the finance teams workload wont spiral out of control. We are discovering more and more things the system can help us with every day.