Spreadsheet hell forces change as LT Apparel adopts Host Analytics

LT Apparel is a privately held 50 year old, $500 million annual retail sales supplier of owned and licensed brands of children’s clothing with relationships covering more than 1,800 local and national outlets. Walmart is the exclusive retail partner for the company’s Healthtex brand. Shoppers may also know LT Apparel by its French Toast Brand, comprised of school uniforms, active, basic and casual wear. Licensed properties include Adidas, Carhartt, and Lee Uniforms. In 2014-15, it had a major problem with budgeting and planning. Here is how it was solved.

Spreadsheet hell

We hear it often enough but this time it is extreme. Spreadsheet hell at LT Apparel got Lee Johnston, vice president finance and corporate strategy more than hot under the collar. So painful was the 2015 budgeting season that he he seriously contemplated quitting unless the company overhauled its budgeting 'system.' In his own words:

I inherited a bunch of spreadsheets that likely built up over time. When I started I fancied myself as quite the Excel expert. No budget model could intimidate me but what I found wasn’t close to usable. The problem was very old versions of Excel integrated into newer versions which caused issues of itself. There were different support file for every calculation you could think of. Ultimately when you get to a consolidation it would have links to up to 30 other workbooks. Some of the calculations, tabs and so on changed  and there was no clean way to get rid of old content. I understand the attachment of Excel but it was never intended for what its become.

A hot mess? You bet and a surefire way to set Johnston off in search of a purpose built tool that could not only solve for spreadsheet hell but also handle much needed modeling capability.

Partner relationship

As is common in these situations, LT Apparel had choices but functionally Johnston didn't perceive a great deal of difference between the final three which were BOARD International, Adaptive Insights and Host Analytics. What happened?

We eliminated BOARD International because it didn't have a big US presence. Adaptive was the other. We really liked the UI. It was very slick and maybe a bit more appealing to the eye and some of the other departmental leaders were keen on Adaptive. It was a very tough decision. But in the end, I had a real solid comfort level with the sales team and our consulting partner. The MD was part of my discovery phase, he was available for calls, showed up for conference calls. I truly felt I was getting not just any partner, I knew who I was getting. I truly had a business partner who was guaranteeing success.

Johnston's point is very well made. In any software negotiation, buyers are often faced with difficult choices in the 'bake off' and especially so when it comes down to a situation where bidding vendors are perceived as at near functional parity. In this case, Johnston took the very wise decision to look beyond the product and consider the question of service.

As most seasoned buyers know, in any deal, the very best point in the relationship with software vendors is about five nano-seconds before the contract is signed. But meeting with the team on multiple occasions prior to deal closure, and having a level of comfort with which the decision maker was more than satisfied, meant that the final choice emerged by itself. In the 21st century, service and relationship elements will count for far more than was the case in the past when decisions were often steered along technical grounds. What happened next?

Challenges and success

No sooner had the ink dried on the Host deal than LT Apparel was faced with issues in a logistics system which led to delays in starting the Host project.

I’ll never forget that summer. The warehousing system wasn’t talking to the back end ERP. To its credit, our Host implementation partner was  very flexible. In the end, I worked for a week straight to implement - I was learning and loading the system at the same time,

says Johnston. But as he points out, LT Apparel is not a public company with the weight of SEC regulation to consider, so the fact one system was delayed was never going to be fatal. It also helps that Johnston has leadership support for a project where the outcomes are important to the business. Issues aside, Johnston reports that Host does everything that was promised:

I am thoroughly enjoying the experience with Host. The way it has facilitated getting information when people have questions helps me do a better job. I have found they’ve lived up to their word. That's really important.

Functionally, Host enables LT Apparel to plan and budget in near real-time but more important, the company can now model without worrying about the impact that spreadsheets might have on the outcome. At the same time, report times have been dramatically reduced to the point where report production is almost trivial. At the detail level, jobs that took up valuable time are now routine:

I needed to build for bonus so had to build a template. Mapping that ahead of time with confidence is a huge time saver.

Looking forward, LT Apparel is planning on a partial reimplementation that will allow the company to take advantage of Spotlight Excel. Does this mean a return to a degree of spreadsheet hell? Johnston is emphatic:

Not at all

Keys to success

Asked about what he considers to be the keys to success, Johnston says that:

• Planning at the detail level in advance of implementation is vital.
• Think through not just for what is in front but what may come in the future - for example, what will you do about capital planning?
• Work hard to maintain the best relationships possible with your chosen implementation partner.

My take

We always enjoy hearing about success and especially so in the face of difficulties experienced in the real world. After all, who truly can say they've had an issue free implementation? Johnston's assessment of the partnership qualities underpinning the pre-sales and implementation phases is well made. A good project is all about that element in a world where expectations are high and where outcomes are seen as vital to the good health of the business.