ERP systems are great for helping manufacturers consolidate their business operations onto a single technology platform, but how do you translate the vast amounts of data the systems contain into driving operational growth and enhancing bottom-line performance? To address this, Crowe Horwath has introduced the Crowe Analysis Platform working capital solution. We caught up with Crowe Horwath principal Bart Kelly to talk about how the system works and how it can help leverage those mountains of data into lower costs, enhanced performance and improved margins.
Consulting: What is the Crowe Analysis Platform and how does it work?
Kelly: The challenge we face is people spent tons of money on ERP systems and platforms. When you take a step back and ask what is the information I really need to drive my business? What are some of the key things that are going to really provide value?
When you really sit down and look, that thought process hasn’t necessarily been incorporated into a lot of the ERP systems. It’s why you’ve got business intelligence platforms, it’s why you’ve got tons of analysts who work in these companies to mine this data to try and come up with insights and information and actionable data. We’ve historically had a consulting practice that focused on working capital, on performance improvement and driving specific targets.
At some point it dawned on us, why not take this best-in-class consulting thought leadership and these ideas and tools and ways of slicing and dicing and driving action and automate them. That way we can be system agnostic, put it on top of any ERP platform and say here’s where you should be focusing time, here are some key things that will be drive improvement in your business. The platform leverages those investments people have made.
Consulting: What specific pain points will this help clients solve and what industries will this impact most?
Kelly: Working capital is comprised of accounts payables, accounts receivables. On the inventory side there’s raw materials, and there’s finished goods. A lot of what it’s going to help people do, especially at an executive level, is really boil down to the key levers and areas they need to focus on and weed through all the nonsense to get to those key points in order to be able to focus and align the organization. The good thing about working capital, it’s almost like asking someone “do you earn enough money?” I don’t know anybody who is going to say, “yeah, I’m perfectly content.”
Working capital is the same way. If you ask anybody “is your working capital truly optimized?” everybody is going to say, I could be do a little better. There are always grades or different spots along the evolutionary chain of whether somebody has a really tight strategy and execution to someone who, quite honestly, doesn’t. A lot of it is systems driven but a lot is people and policy driven.
So you see this evolution of working capital as companies hit different points in their lifecycles and the cyclicalities of business and even within their own staffing to give them the focus and drive, that’s where the power is in this. Working capital as a whole is something every single company has some level of challenges and optimization opportunities.
Consulting: Is the system itself turnkey?
Kelly: The way we’ve established it up to this point is as a Software as a Solution. It’s all cloud-based, we host it. The upfront investment, which is mostly time, is making sure we have the right data stream, making sure we’ve outlined the right core drivers. After we’ve set up that initial template the frequency of our involvement is determined by the user. We can give you as much and as timely information as your business requires.
Consulting: Was launching the platform specifically to address client needs?
Kelly: Again, it kind of goes back to the analogy that every company faces some level of working capital challenges and optimization opportunities. I think a lot of it is the demand is there and the issues have existed. As you look the focus on working capital is going to become more and more intense. It’s based on those existing challenges, but also the increasing availability of data and information and how do we manage and manipulate that in ways that previously weren’t as easy.
Consulting: How does the platform help companies maximize their technology investment?
Kelly: In the early 2000s we made tremendous strides in helping people leverage their ERP investment. What we started to see then was people making all these large investments in these solutions. At the end of the day an ERP system is a calculator. If I put a 2 in there and a 3 in there and expect them to equal 6 it’s just not going to happen. We target those areas to identify the system drivers and key parameters, what are the key pieces of the infrastructure of your ERP system driving a lot of the components and a lot of the decision-making processes. By helping people focus on those things it allows them to take that initial investment and get to the point a lot of them thought they were going to be in the first place.