Arbella Insurance goes paperless in AP with a bold ERP technology refresh

Den Howlett Profile picture for user gonzodaddy September 25, 2016
Understanding the root cause of problems faced by the organization led Arbella Insurance to move its systems to Workday's cloud based ERP

Matt Postulka, Arbella Insurance

What do you do when your HR & Financial data is spread across multiple systems and you’re struggling to meet the growing demand for financial insights by business decision makers? That's quite the common problem in the 21st century and a sure fire signal that it's time for change. That was the conclusion reached by Arbella Insurance, a New England based P&C insurer.

Arbella, which has 1,100 employees, covers 570,000 policy holders and holds assets of $1.5 billion was using 19 systems and 25 integrations to support their HR, Payroll, and Finance functions. Matt  Postulka, Assistant Vice President of application development and architecture, Arbella explains the situation:

We were trying to solve a budgeting and planning problem. Turnaround times for business insights were not in line with what the business needed. As we talked more about the root cause it became clear that while the systems were working, they were not sustainable.

Insurers are naturally conservative so they tend to think in terms of using stable systems over long time horizons, typically 7-10 years. Arbella was no different but this combination of unsustainable systems, long time horizons and a need to modernize was not easy to resolve. As a result, his company spent 18 months in the evaluation phase which included proofs of concept and significant involvement between IT and the business.

Arbella settled on Workday. This struck me as an unusual choice largely because of the risk averse nature of the industry in which the business operates. Postulka explains the situation in these terms.

Workday has plenty that attracts. Not having to worry about server upgrades and a very well received user experience come to mind. Above this though we were looking for a vendor in which we could place our trust for the long haul. So sure, we were a relatively early adopter in the P&C market and were prepared to compromise, but over the procurement process we became very comfortable with the Workday offering. We learned for instance that the way Workday upgrades, it removes an entire set of risks that are common in on-premises systems. We could also see roadmaps that clearly demonstrate this company is in it for the long run.

One of the compromises came in recognizing that while P&C has its own quirks, limiting and eliminating pieces of process while working with configurations was the way to go.

We all like to think we're unique but that's not really true and in any event Workday configurations gave us enough confidence to know there would no serious gaps.

Arbella used the switch as a catalyst for revising their financial data model and increasing the level of HR & Financial data integration to support current and future needs. That in turn meant a significant amount of work cleaning up data and getting source data into the correct formats. This again, is a common issue with significant technology changes but Postulka says it was worthwhile with immediate benefits back to the finance team.

The number one value we’re seeing is in terms of shift of focus inside the finance& accounting group from manual entry, checking and validation to one where analysis is based upon high quality data and a speedy turnaround. On execution, that means a 66% reduction in time to close and end users love it.

What about HR because Arbella told me that while the project started off in finance, an HR requirement emerged?

HR had been considering replacing their systems for a while so when their time came, the evaluation was pretty straightforward. We used the opportunity to bring payroll under the same technical umbrella because it had become clear that we would end up with a single system of record. A single system supporting by a single full vendor gave a huge opportunity to simplify our support model.

That in itself carries risk but again, Arbella put the work in to ensure they were comfortable while keeping a firm eye out for benefits. HR liked, for example, that succession planning and performance planning come out of the box.

When you see what you're getting moving to a unified system likeWorkday then you get the feeling they'll deliver beyond expectations. Everyone likes that.

The initial project took seven months to deliver the full Workday suite, but of that time, about 60% was spent data cleansing. Arbella opted for a soft project launch in April 2015 but quickly followed that by working with Workday in earnest starting in May, 2015. That's impressive.

Given the success of the project which includes the elimination of paper processes in accounts payable, ongoing continuous improvement and overall increased business agility, I wondered if there were any gotchas or advice on offer for others.

The really big thing is not to be afraid of the cloud. The move was not as scary as we thought. There are a lot of moving parts in that statement but if I am thinking technically, then that assurance comes from understanding the vendor has put a lot of thought into securing the system. That's their business and we see that.

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