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AGGREKO: HOW THE COMPANY IS DELIVERING FASTER FINANCE AND DEEPER INSIGHTS TO A GROWING GLOBAL BUSINESS THROUGH THE STANDARDISATION OF ITS GLOBAL FINANCIAL SERVICES

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AGGREKO: HOW THE COMPANY IS DELIVERING FASTER FINANCE AND DEEPER INSIGHTS TO A GROWING GLOBAL BUSINESS THROUGH THE STANDARDISATION OF ITS GLOBAL FINANCIAL SERVICES

By Alice Allegrini

Finance is changing. Disruption to business models, expanding global operations, fiscal complexities, evolving regulation and new risks are all demanding more of financial leaders. As the people most knowledgeable about a company’s performance, there is strong demand for a new breed of CFO who can serve a dual role as financial maven and strategic business adviser to the CEO.

The financial crisis provided the catalyst for change and created the conditions for a new type of Progressive CFO to evolve. Along with the rise of big data and the impact of social and digital media, new economic realities and new technologies have transformed the way CFOs work.

Take the case of Aggreko: a publicly-traded UK company providing power generators and climate control equipment globally to a variety of industries, from oil and gas, construction and mining; to pharmaceutical, telecoms and utilities.

Operating globally from over 190 service centres in more than 45 countries spread over five continents, the product and service solutions it provides range from small and straightforward to exceedingly large and complex.

As a listed company on the London Stock Exchange, Aggreko is required to produce a lot of financial information in a short time-frame. Market growth and increased international investment created the need to collect and consolidate financial data from 45 countries, manage multi-currencies, analyse foreign exchange differences and assess associated risks.

With pressures of growth, a multinational operational footprint and a diversified solution offering, Aggreko’s home grown accounting systems were beginning to creak under the strain.

Reliance on spreadsheets was increasingly weighing down the finance function and its multiple reporting requirements. Data provided by different countries needed to be consolidated manually and to make matters more complex, finance teams in each country were using different processes, causing inconsistencies in the financial statements reporting process.

“There’s a hygiene factor for finance pros in terms of the integrity of the numbers,” said Carole Cran, Chief Financial Officer of Aggreko. “They have to be sacrosanct. No one will ever thank you for it but you lose respect for the function very quickly if it’s not there.”

After polling 100 internal stakeholders as part of the company’s Financial Reporting 2020 initiative (FR2020), Aggreko settled on the need for a single system to manage the monthly close, budgeting, and statutory consolidation process. Aggreko also wanted to build shared skillsets across the global finance function and consistently achieve a timely close based on accurate information.

That would allow the finance function to raise its game in terms of management reporting, and provide more meaningful insights into the business to support planning and future growth.  The disparate collection of country-level spreadsheets it had relied on for years made it difficult to derive intelligence from the data beyond core accounting needs.

“Our team is relatively small but we are still expected to analyse increasingly complex information in order to provide insights to the business — and that insight needs to be delivered quickly,” added Cran.

To support these requirements Aggreko needed to standardise its global financial processes (including monthly closure, consolidation, reporting, budgeting, financial planning, and executive dashboards). They also needed to support decentralised financial processes at worldwide level, and unify its finance operation within a single IT platform.

“Standardisation makes a huge difference when you are operating across cultures, and languages,” said Carole Cran. “Our teams have a lot of authority delegated to them so they need information and access to it quickly and simply.

“There’s sometimes a risk where you can convince yourself that you are standardised so long as you have a single system. The reality is the processes around the system have to be standardised as well.”

RESULTS

Following a rigorous 6-month vendor selection process with 226 business requirements, Aggreko selected Tagetik’s corporate performance management system and mothballed its Excel-based systems for good.

With the support of Tagetik UK, Aggreko was able to roll out the implementation within six months. Two successful parallel runs were executed to measure results against the old system, and ensure that Tategik was aligned with existing infrastructure and company processes.

Since deploying Tagetik, processes are much more streamlined and standardised. For example, countries have standard templates that allow them to update their data during the quarterly or annual close process, resulting in greater consistency across statements.

Aggreko has also improved the speed and depth of its reporting processes, from ad hoc reports and detailed line of business views to consolidated financial statements. By creating one repository for all financial data, it can also rely on a single version of the truth being shared across the company in its internal and external reports.

“The rollout has gone extremely well,” said Carole Cran. “We were impressed by the Tagetik people and what the solution has been able to offer. The speed and value-add to our analytical reporting has been impressive.”

Aggreko plans to optimise data sharing and extend the system to include budgeting and planning from next year.

BOX OUT: AGGREKO’S FR2020 PROGRAMME

In 2014 Aggreko selected Tagetik as the core provider of software and services for its company-wide Financial Reporting 2020 (FR2020) programme. FR2020 was designed to provide corporate performance management capabilities necessary to drive Aggreko’s finance function forward on its journey to world class finance.

Alice Allegrini

Alice Allegrini

One hundred stakeholders from across the Aggreko user community took part in a FR2020 survey to identify weaknesses in the old system and help scope what would be needed in the future. A number of common themes quickly emerged across countries, businesses and reporting levels:

  • Performance is a key issue
  • The current system was too complex
  • Documentation and training were not good enough
  • Ad-hoc reporting and BI analysis capabilities were lacking
  • There was too much requirement for manual input and manual work
  • The current system couldn’t cope with the changing business requirements

With that end-user feedback and a list of 226 business requirements defined by a project team during a 3 day workshop, a finance-led vendor selection process began. An initial list of 4 suitable vendors was identified — market leaders identified by independent research firms, like Gartner and Forrester.

Tagetik’s software was selected and is now providing Aggreko with industry leading financial Consolidation, Reporting and Planning functionality in line with its FR2020 objectives.

Alice Allegrini

Sales Director

https://uk.linkedin.com/in/aliceallegrini

With more than 17yrs experience in Information Technology built through thought leadership. My professional experiences started in Management Consulting and SAP implementation projects. Strong customer relationships and emotional intelligence brought my carrier to sales in SAP Italy, where I was responsible for Large Enterprise customers.

I then decided to move to Tagetik, one of the fastest growing providers in the CPM space, a company built on strong relationships and centred on client needs. I currently look after the UK branch of Tagetik where our reputation is driven by the satisfaction and success of our customers.

Finance

Beyond Transactions: The Payment Revolution

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Beyond Transactions: The Payment Revolution 1

By Marwan Forzley, CEO of Veem 

The uninterrupted disruption brought on by the pandemic accelerated the need for robust, digital-first tools created to support remote teams and accelerate online commerce.

As offices across the US moved to work from home for indefinite periods, specialized back office departments handling sensitive information have had to go a layer deeper to find tailored solutions that support the transition of their in-person workflow. For finance teams, payment approvals, issuance, and general management became a challenge overnight. Particularly for those who — even in 2020 — continued to send and receive paper checks through the mail.

For years and even to this day, millions of small business owners around the world have relied on slow and confusing bank processes to manage their business finances. Every day, they spend valuable time using old, complex and expensive platforms to transact with domestic and international vendors — never knowing where their payment is or even when it arrives at its destination.

With ongoing economic and logistical uncertainty looming as we move into 2021, this old norm should not be expected for much longer. This year has seen small business owners wear more hats than ever before, and has influenced a mass adoption of online financial applications that offer heightened security, save more time, and provide more value as budgets tightened.

A study conducted by Mastercard earlier this year saw online business-to-business payments skyrocket in popularity with more than half (57%) of small business owners across North America turning to digital services since the start of the pandemic to improve cash flow and modernize their payment processes.

If this study is of any indication, the days of making an appointment with a banker or sending a wire transfer through an outdated web portal have passed. And the time for the payment revolution is here.

Putting the user in the driver’s seat

Major world events have always acted as a catalyst for innovation and change. As of a result of the growing pains we experienced this year, in 2021 businesses can finally say goodbye to huge transaction fees and bank-imposed gatekeeping when it comes to managing their financial processes.

The financial technology firms, in partnership card and local bank networks and sometimes even each other, have been building and iterating on products over the past decade that were created to work flawlessly from a desktop or smartphone.

For the first time, small businesses have access to needed, user-friendly financial tools packaged to make their lives easier. No longer reserved for major enterprises, those previously underserved by traditional banks can sign up for applications that consolidate billing, payments, working capital and more to one central dashboard.

With the owner in the driver’s seat, they can better communicate with vendors and customers and reallocate their time previously spent manually sending, receiving and reconciling payments toward growing their business — without ever stepping foot out of their home.

Marwan Forzley

Marwan Forzley

Genuinely seamless and automatic integrations with complimentary functions aligned to core financial activities mark a fundamental change in how businesses will choose to operate moving forward. Not only should experiences be integrated, but the entire lifecycle of the transaction should be digital.

Consider a freelance contractor that uses a time tracking and invoicing software to invoice a client. Through an integration between the time tracking tool and Veem (a complete online business payment tool) the client receives and captures the invoice within their Veem payment dashboard. Because Veem and Quickbooks are integrated partners, as soon as the invoice is received, a bill is automatically created, marked as paid, and reconciled on the client’s accounting software as soon as the funds are issued.

In this flow, the contractor only needs to send an invoice, and the client only has to approve the payment for everything else to move. Thoughtful integrations like these empower businesses to log-in to one application, but benefit from several, ultimately eliminating inefficiencies.

Relentless transparency

Understanding that old habits die hard, it’s expected that businesses of any size have questions when it comes to moving payments from a bank to an online provider.

Answering these questions with unprecedented product value and relentless transparency is the best way forward to bring more businesses onboard in 2021.

This means providing up front pricing, tracking, choice and flexibility to users. Before, during and after the pandemic, cash flow management remains the most critical part of running a small business. Digital payment providers enable the entrepreneur to have unparalleled insight, visibility, and control over their cash flow.

Through non-bank payment options, businesses can secure their information over a secure data network, watch their money move from origin to destination, and choose the speed at which they would like funds to move. By these tools working in harmony, the user can remove friction and spend more time focused on their business.

Separating the signal from the noise

2020 is a year that changed everything for the global small business community. In a report by Veem issued at the start of the pandemic, an overwhelming 80% of businesses shared that they anticipated COVID-19 to impact their business over the next 12-16 months. Problems surfaced that many didn’t even realize they had. And in finding those problems, businesses turned to technology to support them.

As enabling technology, it’s our job to listen and bring clarity and solutions to those contributing to and growing our local and global economies despite the hurdles and challenges they’ve faced.

Right now, small businesses deserve more. More access, more choice and more credit. In the road ahead we expect online payments and bundled user friendly financial services to play a pivotal role in the recovery of small businesses. The payment revolution will see the continuation of important and meaningful products that value the users time and enable businesses to launch, grow, and scale regardless of what’s to come in 2021.

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Finance

The UK’s hidden payments crisis: why businesses should rethink their payments strategy

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The UK’s hidden payments crisis: why businesses should rethink their payments strategy 2

By Edwin Abl, Chief Marketing Officer at Modulr.

As the economic conditions imposed by the Coronavirus endure, businesses are facing a dilemma about how to reduce operational costs while meeting customer needs in as economical a way as possible. And all without compromising on their quality of service.

A recent survey of 200 payments decision makers across the UK, revealed there are hidden costs of payment processing which will have an exponentially greater impact on wider businesses if left untreated. It found, UK businesses are spending an average of £1.5m a year in costs attached to payments – money they simply cannot afford to lose to inefficient processes in these uncertain times.

Businesses need to plug any holes in their boat to avoid sinking. And for many this includes the examination and recalibration of their payments strategy.

The research reveals that the payments process now represents a huge 12% of a business’s total operational expenditure. With two-thirds (64%) of all businesses expecting the cost of payment processing to increase over the next two years.

Two thirds (67%) of payments decision makers surveyed believe the way they process, and service payments has had a direct impact on their customer experience. In fact, 62% of respondents believe the hidden costs of poor payments outweigh the hard costs. This indicates that a poor payments strategy is no longer something business leaders can ignore, as it now has a far greater and unseen impact on wider business mechanics.

The top three hidden costs attached to inefficient payment processes were ‘impact on customer experience/satisfaction’ (38%), ‘influence on relationships with other teams and departments (35%) and ‘impact on competitor differentiation’ (31%).

These findings suggest there is widespread consensus that getting payment operations right, directly creates performance boosts elsewhere in the business. When asked to estimate, as a percentage, the business performance boost received if hidden payment inefficiencies were resolved, the average margin for improvement was +14%, with traditional banking the sector most likely (31%) to predict a performance gain greater than +15%.

The 5 key steps UK businesses can take to drive payment efficiencies

There are five key areas payments decision makers and tech leaders should be looking to change, so that they can drive end-to-end payment process efficiencies:

1 – Locate hidden payment process inefficiencies

Visibility is a key issue. Respondents across large (46%) and small businesses (47%) say they have very clear metrics directly related to payment process costs. Only 8% say that they don’t understand the costs involved. Yet, businesses know they could do better with improved visibility of costs. Both large and smaller companies cite ‘lack of visibility for operational costs’ as the top challenge when it comes to achieving strategic goals around payment process and money services provision.

Digital banking companies, including lenders and FinTechs, identified ‘lack of visibility for operational cost’ as a challenge when it comes to increasing payment services revenue (37%). This is in comparison with all respondents mentioning other issues such as lack of skills (25%) and constrained resources (25%) as secondary and tertiary challenges respectively.

For many businesses, developing a cost model for current and projected payment process costs, both hard and hidden, is a top priority.

2 – Make payments key to stakeholder experience management

Customer, departmental and even supply chain partner experiences are increasingly intertwined. There is no doubt that customer experience is a top priority for payment services strategy. But enhancing the broader stakeholder experience is a close second, and certainly complements the former.

Employee experience affects customer experience. So, payment services innovation must extend beyond customer touchpoints. Happy employees who feel they are working with effective and efficient payments systems will be best placed to enhance the customer experience. And, employees in commercial roles who have bought into the benefits of efficient payments will naturally want to extoll those benefits to customers.

Edwin Abl

Edwin Abl

Companies with a sophisticated and integrated supply chain are likely to be the frontrunners in implementing the integrated payment services that benefit all stakeholders, due to their historic experience. As customer experience management evolves into a broader discipline of stakeholder experience management, including employees and supply chain partners, it will become more crucial than ever to include payment services experience

3 – Integrate and automate to support payment innovation

Payment innovation is driving a culture change, connecting previously siloed functions such as IT and finance. There is increasing integration of systems from customer relationship management (CRM) and enterprise resource planning (ERP), into accounts and payments. The research tells us that payment processes are impacting nearly every department, affecting areas including customer experience, brand, leadership, business agility and ultimately, revenue. Integration enables new business models for paying suppliers and customers.

Automation is key to driving efficiency, replacing manual error-prone and time-consuming processes with real-time and responsive, digital ones. This is particularly the case when it comes to operational and payment processes.

Indeed, 52% of large companies say that team hours spent on payment processes was their biggest hard cost attached to payments, compared with 26% of smaller companies who share that view. This suggests that automation could contribute more to cutting the cost of payment processes in large companies.

A host of payments-as-a-service providers (including Modulr) are supporting customers to do just this by enabling them to stream a whole unified product ecosystem of payments functionality directly into their own software.

4 – Bring business leaders together

Payments innovation is driving systems integration and creating a more collaborative stakeholder ecosystem. As all the C-level roles become increasingly focused on the customer experience, the finance remit now includes overall business operations and its associated risks and opportunities. The role is evolving beyond just accounting, tax liability and funding. Therefore, closer collaboration between senior leaders is key to driving efficiencies and enhancing customer experience.

5 – Innovate by adding finance and payments to vertical services

Companies with a vertical focus are well placed to innovate by offering new payment services. In many vertical sectors, especially employment services, software vendors are increasingly embedding financial services facilities, such as payments, into their technology platforms. Employment services SaaS providers, across payroll, accounting, bookkeeping and more are offering financial services to existing and new customers within their specific ecosystem.

This means they can develop hyper relevant, convenient and delightful financial products and services for their end users through highly flexible, ‘plumbed in’ payments. This creates an ecosystem of stickier products while boosting the lifetime value of each end user.

Moving forward – engaging technology to drive efficiencies

If the onset of the Coronavirus crisis has taught us anything, it is that there are many advantages to investing in technology and having a digital infrastructure as responsive as your customer-facing experience.

However, whilst digital technologies enable companies to provide customer service in new ways during lockdown. These same businesses are failing to transform their digital strategies, with the biggest priority still being cost reduction (41%).

By not shedding legacy technology and shoring up operational efficiency, UK businesses are following an increasingly risky strategy. And one which will have an exponentially greater impact on the wider business if left untreated. Particularly when this widespread failure to act concerns the customer experiences that sit at the very heart of a proposition – the payments.

To find out how you can drive payment efficiencies into 2021 and beyond, download the full report here for all the insight you need.

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Gain financial regulation qualification online

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Gain financial regulation qualification online  

Warwick Business School in partnership with the Bank of England are delighted to offer two online specialist Postgraduate Awards, which are perfect for anyone working in financial regulation to evidence their professional development.

  • Financial Conduct, Leadership & Ethics – Starting in February 2021
    You will debate and cover questions such as how do financiers judge ethical questions in financial markets? What are the implications for regulators and for clients?
  • Financial Regulation & Supervision – Starting in June 2021
    You will develop a comprehensive understanding around financial regulation by looking at topics such as its tools, benefit and practical application.

Studied online over a period seventeen weeks, you will gain a detailed knowledge of the subject, learn industry best practice and gain a qualification to evidence your understanding.

The wider Global Central Banking & Financial Regulation qualification offers three start dates and four qualification levels.

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Invest in your career

Find out more about these Awards and the qualification levels offered by Warwick Business School in partnership with the Bank of England, by downloading the brochure here.

This is a sponsored feature

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