Fully Integrated FP&A
Monday, 4 May 2020
Fully integrated FP&A at Fitness and Lifestyle Group. Find out how the company saves over 250 hours of reporting time and drives group-wide transparency of performance with Board:
The Company – Asia-Pacific’s leading fitness, health, and wellness group
Fitness and Lifestyle Group (FLG) was established in 2016 following the acquisition of Fitness First, Goodlife, and Jetts health clubs across Australia and New Zealand by a private equity investor. The company has been growing rapidly ever since, bringing more gym chains into its portfolio, diversifying into the digital fitness space, and acquiring the rights to US high-intensity workout brand Barry’s Bootcamp for Australia, New Zealand, and Southeast Asia.
FLG now has over 500 physical locations with 850,000 members, and almost one million worldwide subscribers to its online applications.
The Challenge – Disparate approaches to FP&A and reporting across multiple brands
The group’s leadership team was keen to gather insights from across its portfolio, but this was proving difficult. Financial accounting had been centralised, but each of the acquired companies still had its own siloed systems in place for managing information such as memberships, customer attendance, and sales.
“A high-performing FP&A team spends 80 percent or more of their time on value-added activities, uncovering insights and delivering them in partnership with decision-makers. We were the inverse of that. Pulling together things like a board report or monthly performance pack took days,” says Adam Leake, CFO at FLG.
With only a basic financial reporting tool in place, it was taking one analyst two days each month to generate a P&L for just 18 out of 500+ locations, and another three to produce a monthly performance pack. This greatly reduced the amount of time available to spend on value-added activities. Management reporting at group level was also cumbersome, with users having to upload their spreadsheet-based models into the ERP system for managers to extract data using the legacy reporting tool in a slow, convoluted, non-standardised process.
There was a similar story for budgeting and forecasting. Each brand has its own methodology, owner, and spreadsheet model at varying levels of detail, meaning overall budgeting activities took 12 weeks to complete. Information was stuck in silos, there was very little version control, and the integrity of the different models was lacking.
“We were actually spending one quarter of the year producing budgets, and this was always in the final weeks when we should all have been focused on driving to the end of that financial year instead of what was coming after it,” says Adam.
On top of these challenges, information sharing and team collaboration was very difficult, forecasts and related reports could not be updated quickly, and there was limited ability to analyze data effectively at customer and product levels.
The Solution – A unified, self-service planning and reporting platform
On the quest to enable the FP&A team to become 80 percent value-add, FLG began the search for an integrated planning and analysis solution which would transform the company’s approach. It was determined that the new technology had to:
- Deliver quick and easy self-service reporting
- Standardize planning and budgeting group-wide
- Enable the business to properly undertake rolling forecasting and scenario planning
- Unify financial and operational data to enable in-depth analysis
Adam and the team embarked on a detailed selection process, conducting desk research, exploring Gartner reports and product reviews, and attending several conferences to see different solutions in action.
“We wanted one tool to do it all, and we were conscious that this was a long-term investment. Our board has high expectations about the quality of reporting, so we had to be sure we got it right. The solution had to be fast enough to deal with growing volumes of data over the coming years, offer multi-currency capabilities to support our global operation, and be finance-owned so we could remove the reliance on IT.” he says.
After shortlisting three vendors, FLG spoke in detail with each one, saw an initial demonstration, then undertook a Proof of Concept (PoC) with its own data. During a live presentation of these PoCs, Adam was keen to stress test the performance of the solutions to see how quick and easy-to-use they were.
“Board was the only company that got through the Proof of Concept without a hitch. With other vendors the process was slower than we expected or far less simple to drag and drop than we hoped it would be. In terms of meeting the Minimum Viable Product criteria we’d set, Board was always the frontrunner,” he explains.
Customer service also played a key role in the selection process. FLG was keen to find a long-term partner, which would support the company and grow alongside it.
“At certain points during the selection process the other vendors disappeared, leaving us liaising with consultants, but with Board we had a single point of contact throughout. That was unique amongst all the vendors we spoke to and was a big factor in our decision to go with Board,” says Adam.
The Benefits – Reporting time reduced by 250 hours
Once the selection had been made, FLG began the implementation alongside members of Board’s Professional Services team and Implementation partner Mecklemore. The project was broken down into three phases:
- Transform the reporting process to reduce the time needed to complete it
- Standardise budgeting and forecasting business-wide
- Generate group-wide data insights using analytics dashboards and visualisations
At the time of writing, the first phase has been delivered in just 12 weeks, with the company already realising significant improvements in efficiency.
In total, 35 consolidated reports have been created to cover the entire portfolio, giving managing directors and executives on-demand access to current and comparative P&Ls for clubs, brands, and support offices. These reports are available at the click of a button, removing the need for the FP&A team to spend hours manually collating them.
“We’ve saved over 250 hours in low-value productivity just by implementing a new group-wide P&L report in Board. And that’s just one report of many,” says Adam.
In addition, FLG’s Club KPI report, which was previously generated using a mass of manually collated spreadsheets, now takes much less time to produce. The report is now available as an interactive dashboard containing detailed performance information, enabling the CEO and CFO of each brand to see key information such as EBITDA by site versus budget.
Adam explains: “Leaders can now quickly drill into the detail for clubs that have missed targets, check out the trends on membership movement, for example, and see if it’s a one-off blip or a cause for concern. Other information on membership types, revenue by type, and visitor numbers are also available at a glance. Before Board, they never had this visibility at all.”
Following on from the success of the reporting aspect of the project, phase two is well underway. Analysts from each of the brands came together for just one day to map out what the drivers, assumptions, and calculations should be, before the mecklemore team took the information away to build the solution. Once complete, FLG will be able to undertake all budgeting and planning within Board’s single, user-friendly interface, in a significantly shorter timeframe than the current spreadsheet-heavy process.
The third phase will focus on insights and analytics and, in conjunction with the first two phases, enable the FP&A team to achieve the goal of focusing more on value-added activities:
“I’m excited to get to that stage so we can bring together more insights in one platform and have them in the hands of our business users. We’re already thinking about what the new visualisations could look like, such as a map to show us performance at a regional level and enabling us to easily compare brands and locations. We regularly use the Board community to get inspiration from how other companies have represented their data.”
Adam summarises his experience during the project with some useful advice for other organisations looking to achieve digital transformation:
“My key takeaway from the project is to be open to throwing out the old and exploring new ways of visualising information and presenting it to decision-makers in a way that takes them on a journey. Use different charts and different elements to tell a story rather than regurgitating information and enable them to use self-service analysis to find what they need.”
Are you seeking to transform your planning and analysis function in a similar way? We'd be delighted to discuss your specific digital transformation needs.
