Fletcher Residential improves financial functionality performance

The challenge

The limited planning capacity and flexibility of their chosen ERP solution led to Fletcher to an undue reliance on Excel. Data was exported from the cloud-based software, and planning and modelling would be completed in standalone workbooks.

Each department had different and inconsistent planning processes, and manual spreadsheet planning and reporting was prone to input errors, time-consuming to update and refresh, and complex to modify.

Fletchers wanted to achieve robust, agile planning driven by a reliable single source of information across the business. Real-time data and predictive modelling were needed to bring accurate analysis and forecasting, giving the team confidence in the numbers, more agility in a dynamic market, and the ability to make better financial and operational decisions.

Tools for accuracy, integrity and trust

To unite all of their information in one place and move away from manual spreadsheets, Fletcher Residential and Development turned to Ben Schofield and Michael Mackie at Mindfull (today, part of Fusion5).

“They had issues with double-handling of Excel spreadsheets and file uncertainty. When you can’t trust your data, your business simply can’t operate and forecast with speed or confidence.”

Michael Mackie

To overcome the division’s issues, Fusion5 implemented IBM Planning Analytics with Watson.

This brings all Fletcher Residential’s operational and financial data, reporting and forecasting together into one structured platform in which assumptions are globally assigned and the approach is consistent across the division. It brings data integrity and transparency to drive better business decisions and outcomes.

“The consistency and precision of our reporting has soared through using IBM Planning Analytics,” says Deacon.

And with information no longer locked into limited users, data is now more accessible to more teams — it’s been democratised to better serve the various divisions of the business.

Robust reporting for multiple divisions

Three key divisional groups regularly use it — the finance team, the development project managers, and senior management. It’s the finance function that underpins everything, from reports and analysis to models and forecasts. 

“Our finance team couldn’t work without it now.”

Rodnet Deacon | CFO, Fletchers Residential

Using IBM Planning Analytics as the main source of all annual forecasts for earnings, cashflow and balance sheets, the division can report regularly, consistently and accurately to management on board papers and for strategy projects — including 12-month rolling forecasts extrapolated from recent results.

Live forecasts are now possible, too, for the four Fletcher Living branches, which has helped the senior management team track financial performance versus annual operating metrics and budgets. 

“It previously took two to three hours to write each branch report, but now we do each in half an hour.”

Rodney Deacon | CFO, Fletchers Residential

Financials enable data-driven decisions

This means that accurate, live financials — accessed via bespoke dashboards — inform every aspect of business operation. “Tools within let you look back, analyse and report on historic performance and data,” explains Fusion5’s Michael Mackie. “Predictive algorithms offer insights into past performance, and you can extrapolate data into model scenarios (e.g., a best-case versus worst-case outcome), factor in trends and other drivers, and look at future impacts on your bottom line.

“The impact of, say, sales modelling on financials can be seen instantly. The same goes for modelling asset maintenance or plant capacity constraints. Basically, because everything has a cost implication, finance teams are uniquely positioned to support the business. All of this leads to data-driven decisions.”

For Fletcher, adding this finance function has been revolutionary. “We can measure the final performance of a project against original projections,” says Deacon. “We can even check it midway through, to check our returns and make strategic decisions. It enables very active project management, as well as powerful insights into value factors across all our developments.”

Having financials at your fingertips also adds agility, which is vital in a fluid business environment. With all the disruption to supply chains caused by the pandemic, Fletcher Residential has relied on the power of planning and financial modelling across all its developments, helping the team both manage risk and be more adaptable in supply and pricing.

Better project planning

Using IBM Planning Analytics to create financial feasibility models for property developments, with house sales and build costs factored in, enables teams to assess new subdivision opportunities.

“We have about 20 subdivision developments being built out at any one time,” says Deacon, “and probably another 20 or so that we are actively planning or pursuing, so the modelling helps us to plan our pipeline of work and forecast the cashflows associated with buying and developing large plots of land.”

Long-range forecasts are another plus. “The software displays all the developments we have secured and what we will be building every month over the next five years. So we can see any gaps for projects, and buy more land to keep the teams busy.”

Growing with the business

As Fletcher Residential grows, so does IBM Planning Analytics, which is tailored to every aspect of business planning. Fusion5’s most recent project was to help Fletchers migrate data from on-premises hosting to the cloud. They are also extending the scope of the existing feasibility model, for greater accuracy when planning apartments, retirement villages and new industrial projects.

Deacon says that although it’s hard to put a dollar value on the impact of IBM Planning Analytics, its advantages have been immeasurable.

“It has probably paid us back fivefold or tenfold what we originally anticipated in the volume of business we’ve won and the amount of time we’ve saved. Our business is growing, and this is core to our ability to scale up the business without having to add significant additional overhead costs to support that growth.”