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Technology makes it possible... People make it happen. CASE STUDY Data Communications Company ABOUT THE CLIENT The Government’s vision is for every home in Great Britain to have a smart energy meter. To achieve this the Department for Business, Energy and Industrial Strategy (BEIS) (formerly the Department of Energy and Climate Change (DECC)) has created the Smart Metering Implementation Programme – calling on energy suppliers to lead the roll-out of an estimated 50 million smart electricity and gas meters to UK domestic and small non- domestic properties by 2020. Smart DCC Ltd’s (DCC) role is to provide the end-to-end service between the smart meter in the home and the energy suppliers – putting them at the heart of one of the largest infrastructure projects in a generation. DCC does this by designing, building and operating the shared data management systems and communications network necessary to deliver a reliable, secure and fair platform for the energy industry to work with. The company operates under the Smart Meter Communications Licence, granted by the Secretary of State for Energy and Climate Change in 2013. It is regulated by Ofgem, with a particular focus on controlling costs and meeting DCC’s goal of providing value for money for the Energy consumer. INDUSTRY Energy BUSINESS CHALLENGE Lack of consistency in reporting and analysis Reliance upon spreadsheets Too many time consuming manual processes EOH SOLUTION SAP BPC Transformed reporting and forecasting speed New scenario planning capability Process refinement as part of phased implementation BUSINESS IMPACT Reduced reporting cycle times by 25% New levels of visibility and control of cash flow Improved confidence in reporting and analysis for decision making Knowledge transfer to finance team The business challenge DCC is a wholly owned subsidiary of Capita Plc but due to the ground breaking nature of its work, is setup as an independently run company, beginning life as a start-up with no blue-print for its processes and systems. Despite being small and innovative, the company is required by its licence to report its financial performance in a similar way to a FTSE listed company. It is vital that DCC maintains the confidence of external auditors, industry regulators, government and is also required to give public visibility to its annual financial statements and quarterly forecasts through its website. When the company began, as with many start-ups, it used manual data entry and spreadsheets as a way to consolidate numbers as well as for budgeting and forecasting. But as the company evolved, DCC’s Finance Director, Nadim Ahmad was concerned that the use of spreadsheets was not a scalable or reliable financial planning, analysis and reporting tool for the business. He was also aware that different finance professionals may be adopting different approaches, resulting in potential inconsistency which could lead to inaccuracy. “Having previously experienced the value of Corporate Performance Management (CPM) solutions to drive quality, accuracy and control, I knew we needed to invest in order to secure DCC’s long term financial stability. We set an objective to automate our financial planning, analysis and reporting – producing a single, consistent, version of the truth that would give our stakeholders complete confidence in our numbers generation and reduce the time and resources it took to produce them,” comments Nadim.

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Page 1: Data Communications Company - EOH UKCASE STUDY Data Communications Company ABOUT THE CLIENT The Government’s vision is for every home in Great Britain to have a smart energy meter

Technology makes it possible...People make it happen.

CASE STUDY

Data CommunicationsCompany

ABOUT THE CLIENTThe Government’s vision is for every home in Great Britain to have a smart energy meter. To achieve this the Department for Business, Energy and Industrial Strategy (BEIS) (formerly the Department of Energy and Climate Change (DECC)) has created the Smart Metering Implementation Programme – calling on energy suppliers to lead the roll-out of an estimated 50 million smart electricity and gas meters to UK domestic and small non-domestic properties by 2020. Smart DCC Ltd’s (DCC) role is to provide the end-to-end service between the smart meter in the home and the energy suppliers – putting them at the heart of one of the largest infrastructure projects in a generation.

DCC does this by designing, building and operating the shared data management systems and communications network necessary to deliver a reliable, secure and fair platform for the energy industry to work with. The company operates under the Smart Meter Communications Licence, granted by the Secretary of State for Energy and Climate Change in 2013. It is regulated by Ofgem, with a particular focus on controlling costs and meeting DCC’s goal of providing value for money for the Energy consumer.

INDUSTRY

EnergyBUSINESS CHALLENGE• Lack of consistency in reporting and analysis• Reliance upon spreadsheets• Too many time consuming manual processes

EOH SOLUTION• SAP BPC• Transformed reporting and forecasting speed • New scenario planning capability• Process refinement as part of phased implementation

BUSINESS IMPACT• Reduced reporting cycle times by 25%• New levels of visibility and control of cash flow• Improved confidence in reporting and analysis for

decision making• Knowledge transfer to finance team

The business

challengeDCC is a wholly owned subsidiary of Capita Plc but due to the ground breaking nature of its work, is setup as an independently run company, beginning life as a start-up with no blue-print for its processes and systems. Despite being small and innovative, the company is required by its licence to report its financial performance in a similar way to a FTSE listed company. It is vital that DCC maintains the confidence of external auditors, industry regulators, government and is also required to give public visibility to its annual financial statements and quarterly forecasts through its website.

When the company began, as with many start-ups, it used manual data entry and spreadsheets as a way to consolidate numbers as well as for budgeting and forecasting. But as the company evolved, DCC’s Finance Director, Nadim Ahmad was concerned that the use of spreadsheets was not a scalable or reliable financial planning, analysis and reporting tool for the business. He was also aware that different finance professionals may be adopting different approaches, resulting in potential inconsistency which could lead to inaccuracy.

“Having previously experienced the value of Corporate Performance Management (CPM) solutions to drive quality, accuracy and control, I knew we needed to invest in order to secure DCC’s long term financial stability. We set an objective to automate our financial planning, analysis and reporting – producing a single, consistent, version of the truth that would give our stakeholders complete confidence in our numbers generation and reduce the time and resources it took to produce them,” comments Nadim.

Page 2: Data Communications Company - EOH UKCASE STUDY Data Communications Company ABOUT THE CLIENT The Government’s vision is for every home in Great Britain to have a smart energy meter

www.eoh.uk.com

Having made the decision to invest in a CPM solution, DCC followed a rigorous product selection process. The list of vendors was whittled down during the procurement process and SAP BPC was one of five final products to be benchmarked in a competitive proof of concept with EOH as the implementation partner. It was this combination of SAP BPC and EOH that DCC selected as the best fit for the business.

Nadim had several clear objectives to fulfil in the design phase. With consistency and confidence central to his vision for the finance function, it was important to establish the right financial and business processes.

“As a young business I think it is fair to say that our processes were still evolving and that EOH’s consultants were very supportive of changes we needed to make during the design and implementation phases. They consistently provided the DCC with valuable insight on how to achieve best practice and get the most from our BPC solution – particularly in important areas such as cost management, cash flow forecasting, automated forecasting and budgeting, and scenario modelling.”

• Cost management Implementing best practice cost management was one of

the major drivers for the new system. DCC is a regulated monopoly and must ensure its costs are economic and efficient. It must provide value for money to the Energy consumer, so cost control is at the very heart of how the DCC operates and manages its business. Charges to customers are structured in such a way that DCC receive funds that are sufficient to cover their anticipated costs for the year, limiting any amounts of over-recovery which would not be acceptable for their diverse range of external stakeholders. This is the reason why controlling expenditure is the primary driver of DCC’s financial performance. The finance team has used BPC to enhance the transparency of the internal costs of running the business and the external costs of managing the supply chain.

• Cash flow forecasting DCC is required to provide assurance of financial stability

under the terms of its Licence, which places a great deal of emphasis on management’s ability to understand the cash flow forecast and the key drivers that underpin the financial health of the business. With the DCC operating on a cost base in excess of £300m per fiscal year, the move from manual spreadsheets to a BPC generated forecast has provided management with a significant level of confidence in the rolling cash flow forecast, financial KPI’s and key drivers. This confidence has translated up to the Company’s Board who are ultimately responsible for the financial stability and viability of the DCC.

• Automated forecasting and budgeting DCC must constantly look ahead to 2020 and beyond to

ensure that it remains in the right financial position to support the mass roll out of smart meters across Great Britain. DCC’s Finance Director was determined to establish fast, flexible forecasting and budgeting by automating the process and turning the quarterly and annual reporting cycles into more of a value added exercise, rather than an obligation to report. This has been achieved and has delivered a greater level of confidence in decision-making.

The

solution

• Scenario modelling DCC’s Finance Director Nadim is always keen to spin up

detailed “what if” scenarios to explore different assumptions and explore what the net impact would be to the business, a very useful capability in a fast moving business. The DCC is delighted with their new scenario modelling functionality within BPC and are looking at further ways to adapt and evolve this capability.

“Our objective for investing in a CPM system was to achieve certainty that all of the information we provide to our Board and external stakeholders is complete, accurate and delivered on a timely basis, and that every decision is being taken with absolute confidence in the numbers”, said Nadim.

”They consistently provided the DCC with valuable insight on how to achieve best practice and get the most from our BPC solution – particularly in important areas such as cost management, cash flow forecasting, automated forecasting and budgeting, and scenario modelling.”

Page 3: Data Communications Company - EOH UKCASE STUDY Data Communications Company ABOUT THE CLIENT The Government’s vision is for every home in Great Britain to have a smart energy meter

DCC has achieved its core objectives for the implementation of BPC and recognise the role EOH has played in delivering business value. Nadim is keen to point out that there are many similar products on the market and that in his experience, the difference between success and failure can be in choosing the right implementation partner.

“EOH stood out in the process and they did not disappoint. Throughout every phase of the project their consultants adopted a collaborative approach making great efforts to understand our business objectives. At no point did it feel as if they were just the ‘supplier in the room’ and they were always happy to share their experience of financial best practices through their deep understanding of the product,”, comments Nadim.

DCC now has a standard set of financial reporting, planning and forecasting processes that it can adapt as the business matures. The ability to automate reporting, planning and forecasting has speeded the reporting cycle by around 25%. This means the team spends less time crunching numbers and spreadsheets and use their time for business partnering and investing in other value added activities across the business.

The

benefits

The Gridiron, One Pancras Square, London, N1C 4AG+44 (0) 203 036 0926

www.eoh.uk.com

About

EOHFounded in 1996 EOH UK has been making a tangible difference to the finance function for decades. We build trusted relationships by bolting deep business know-how and proven technology capabilities to our collaborative leadership values.

At the heart of our success is the recognition that building trust with clients is critical. We go to extraordinary lengths to understand the full picture, from current challenges to future goals, while inspiring clients to become more visionary across the system landscape.

Breaking away from legacy systems and streamlining processes is a bold and increasingly necessary step. Choosing EOH UK ensures you have a partner with you at every step of that journey.

Together we deliver the optimum technology solution – grounded in pragmatism but always with an eye on innovation. The result? A faster, leaner, smarter solution delivering returns as well as improved business performance.

Technology makes it possible, people make it happen.

They now have the confidence that decisions are based on the best and most accurate picture of the business. Working with EOH has resulted in a real transfer of skills as most of the finance team had no previous experience of implementing a CPM solution. Now in the post implementation phase, DCC is continuing to refine processes and make their outputs even more efficient.“EOH stood out in the process and

they did not disappoint. Throughout every phase of the project their consultants adopted a collaborative approach making great efforts to understand our business objectives.”