In 2011, electrical services and technology provider Parsons Electric in Minneapolis, Minn., decided to take its accounting to the cloud. Monica Ross, the company's director of strategic projects, talked with AWEB about implementing the new system from Host Analytics, and issues that were resolved.
How did you go about looking for a cloud accounting system?
It was about three years ago that we felt we needed to add more process and sophistication to our budgeting, forecasting, and reporting. We were very happy with our general ledger system because it provides industry-specific tools that we need for the construction industry, such as billing on long-duration projects, and some features on payroll for union employees.
We didn't want to change that, but we needed to enhance it. We went to market to look at available tools to do that. We weren't immediately focused on whether it had to be cloud-based or on-premises. My CIO was more on-premises-based because of security and other issues.
We analyzed three packages: two cloud and one on-premises. We came to the conclusion we were better served by the cloud, and it freed up resources to get away from monthly or quarterly patches for software upgrades. It was less of a burden for the IT group.
I understand that you were frustrated by a lack of access to budget information, real-time reporting and timely forecasting on Excel. Can you offer any specifics?
We did not basically allow the users to go in and enter their own information because of the fact that Excel is very flexible and allows you to change anything and everything. That lacks the control and security we needed. We had certain examples of letting users enter or review certain information and they would inadvertently break a formula, move information into different places so it wasn't consolidating to summary pages. It was too hard to track errors. So we needed to keep ourselves in a control position: This is our spreadsheet and we know how to gather information from you.
With regard to our reporting, our general ledger system was inflexible with the format and grouping of reports. It has a certain number of pre-population reports and if you want a different kind of report, that would be customization to pay for and get prioritized with software developers to manage that whole process. It's time-consuming and costly. So we needed something that would allow you to create more flexible reports for evolving business needs for different groups to view together.
Host Analytics had easily adapted templates and better reporting, but an Excel interface. How did this blend with Excel to be a better program?
Our users have appreciated the ability to run their reports within the cloud software but then export to Excel if they wanted to do their own analysis. Maybe they wanted to extrapolate some information or compare it with different measurements they were gathering outside of the system. It provides a way to do that hands-on information analysis that some people crave. They want to be able to double-check, and it creates more confidence for those people who crave the ability to play around with the output. We have appreciated that the reporting solution lets us, as the finance leadership team, have security and control over the output. There is just one version of the truth. The problem with Excel is that people will summarize information in different ways and consolidate it incorrectly.
When the finance team put annual budget information from the business units into the new cloud system from Host Analytics, the budget could be completed in half the time compared with Excel. How?
We have a variety of different operating groups in the company, and often there's a desire to create comparisons. Can we create cross-comparisons or analysis by using one person's information to populate the budget of another? That can be challenging in Excel because you are creating all these formulas and links to keep everything updated from scratch. And once the information is complete, it isn't posting to the database of certain general ledger accounts. So even after we were done with the budget version in Excel, we would still have to spend a period of time identifying all the posting accounts for this information and manually entering it into the system.
So those steps were eliminated when we had templates that would post to a database and allow you to pull in reference information from other templates.
Now that you've had three years of monthly and annual reporting, is there anything you'd do differently?
There are two lessons learned from the implementation. One is that we were in a period of change during implementation; we wanted to manage our business in different ways. We wanted to have more operating groups so there was more definition around the way our business was running so managers could see the group they were in charge of. We also wanted to create a separation of overhead expenses vs. creating an operating group for each of our background support services, and create a process of how to allocate those costs to revenue-producing divisions.
So we were in a period of change in accounting and output of reporting to our business and also implementing and learning new software. In hindsight, it would have gone more smoothly if we had our change requirements 80 to 90 percent figured out before implementation and then refined them once we had a better understanding of how the software can meet those needs. We had some stops and starts because we weren't fully clear on our requirements. So, have your requirements figured out upfront.
The second lesson learned was that we tried to over-engineer a solution for how we forecast our long-duration construction projects. We built something that was so complex and sophisticated that it was not user friendly and we ultimately decided not to implement it. The beauty of keeping it simple, particularly during a period of change, is that you can always add or enhance a solution.
More details are available in a brief paper from Host Analytics, the company that worked with Parsons to move to the cloud.