Improving financial performance
Lumley (New Zealand) is the third largest general insurer in the country. Part of the Wesfarmers Group, it employs more than 600 people in it’s head office in Auckland and other sites around the country.
Four years ago, Lumley brought in a new executive team, who were tasked with improving the company’s financial performance. The new CFO embarked on a full review of internal processes and financial controls, and identified management information as an area ripe for improvement.
“The company had been relying on a complex system of linked spreadsheets for financial reporting and budgeting, and we saw this as a key area for improvement,” comments Tim Bowen, Financial Controller at Lumley. “To take an example: our management reports were only generated once a month, in a time-consuming process that delivered an inflexible 150-page report about five days after month-end. We wanted to give our stakeholders much faster access to more current information, and present it in a way they could understand more easily”.
The Lumley team decided to redesign its budgeting model from scratch, and a team from across the business worked together to define the drivers that should be included in the model, identify gaps in the available data, and bring the missing information into the data warehouse. Next, they used Microsoft Excel to create a proof of concept for the new budgeting model. The team looked at the solutions available on the market, and began testing software from a leading analytics vendor to see if it would meet Lumley’s requirements.
“We spent about six weeks trying to prove the software could meet our business requirements, but in the end we couldn’t find that proof and overall we found it a fairly difficult product to work with,” comments Tim Bowen. “Then we spoke to Cortell New Zealand, who recommended using a different solution: IBM Cognos TM1. They claimed that the IBM solution could do everything we wanted, and would be easy to set up. We asked them to prove it – and they came back the next day with a proof of concept that ticked almost all of the boxes. What we’d spent six weeks struggling to achieve, they were able to do overnight!”
Choosing an IBM solution also aligned well with the strategy of Lumley’s parent company, Wesfarmers Insurance, which uses IBM Cognos technologies in its own business. Equally important was the pricing: Lumley found the software licensing costs competitive with the other solutions it had considered, and Mindfull offered an attractive fixed-price deal for its implementation services.
“We’ve consistently been amazed at how easy it is to get things done with TM1 – projects that we estimated would take months have actually been accomplished in weeks.”