As a regulated financial institution with strict reporting requirements, there are only two dates in the year when it’s realistic for Coventry Building Society to safely switch to a new finance system. The decision was therefore taken two years in advance to bring its brand new Workday financials system live on April 1st this year. The cutover had to be done overnight, and any slippage would have meant pushing back to the next 'safety date' of October 1st, with significant costs for overrunning. No pressure, then!
Andrea Harrison, Head of Finance Transformation at Coventry Building Society will be speaking at this week's Workday Rising EMEA conference in Barcelona, Spain about the preparation that was needed for a successful transition from the incumbent Oracle on-premise system. I spoke to her in the run-up to the event to find out more. It turns out that all the planning and advance work paid off. The first month-end close was completed in just five days, and now the process is done in three. I asked how that compares to before?
Previously ... working day six or seven would have been the date that the numbers were locked down. Now we can send out flash results on working day three. And we've got ambition to bring that in even further, if we can do.
Already, we're getting the execs saying, 'We can't believe that we're getting results so early.' And that really allows us then to add the insight. Whereas we probably spent, in truth, probably half of the month looking backwards. Where now we can spend the majority of the month looking forwards, which again adds value to people's roles.
Coventry is the UK’s second largest building society, a mutual savings and loans institution serving 1.5 million savers and 350,000 home loan holders. It has seen strong organic growth in recent years, reaching total assets of £65 billion ($79bn) at the end of 2022, up from £22 billion ($27bn) in 2010. At that scale, its finance systems were overdue for an upgrade.
Moving to Workday
The Society had been running on an on-premise implementation of Oracle E-Business Suite, which dated back to the early 1990s, when the society's balance sheet was around the five to six billion pound mark and there were less than ten people in the finance team, which is now around 120 people. The system was no longer adequate to support the organization at its current size and ambition. Harrison explains:
Getting information out of the general ledger was really hard because of its nature, and the way that we'd set it up. It wasn't something where you could just slice and dice and really easily extract information. So people were spending a lot of time working really hard, just to do basic tasks.
In addition there was very little process automation, no straight-through automated processing, and no fixed asset register, so these figures were managed on a spreadsheet. The impact of switching to the Workday system on how the finance team works was massive. She says:
We had less than 5% of our controls automated before we implemented Workday. Now we're over 70%. We had around 120 spreadsheets that managed the month-end process outside of Oracle. We've reduced that by 70%, but we're continuing to push that further. Obviously a lot of the journals within Workday are automated now as part of the month-end processing that happens.
Moving the finance system to Workday is part of a multi-year, multi-million pound transformation program that has also introduced Workday Accounting Center alongside the core finance package, and will add Workday procurement and sourcing software, Adaptive Planning, and further integrations. The Society already runs its HR processes on Workday HCM. As much as possible is therefore going to be end-to-end within the Workday platform. She adds:
One of our design principles was to have an integrated end-to-end and well-governed system ... The more that Workday deliver, and the more that we can take advantage of them, the more that we'll look to do that.
Being able to now directly trace back transactions all the way through to the core banking platform, or to analyze cost performance and outliers "at the touch of a button" is a sea change from what was possible before. That has meant a huge change to longstanding routine — turnover at the Society is low and one manager even remembers being involved in the Oracle implementation. Harrison comments:
This has been a significant change for people, it's literally been moving overnight from a completely different way of working. It's not been something that's gradual. It had to really change the following month — close Oracle down, forget everything that they did on Oracle, and adopt a new way of working ...
People's jobs have changed massively. I think that has been probably one of my biggest focuses. Getting the technology in, in a way, was the easy part.
Being able to make a fresh start with a new system had given the opportunity for a complete rethink. Rather than adapting what had been done in the past, there was a "ruthless" focus on adopting Workday's standard processes and avoiding customization. But first came a design phase in which the finance team worked closely with other functions, including HR, procurement and product teams, to make sure the data model of the new system would be fit for the future. She explains:
We spent quite a lot of time upfront, thinking about the design of the system — thinking about the design of the data model, particularly. What did we want to get out of the data model today? But also, what might we want to get out of the data in the future — really encouraging people to go back to basics.
Adapting to a cloud-based system that will continue to evolve was another change. The switchover in April just the beginning. She says:
We've been very clear to the board that implementing the system on the first of April, which is when we went live, was the start of our Workday journey, and there was more value that we could extract from the system. So don't just expect the change to end, once we've gone live with this phase one.
The entire transformation program has been led by the finance team, with a service delivery capability within finance having ownership of the system. That business ownership was crucial to the success of the project. She says:
We signed off the functionality, we determined the testing, we determined the approach to cutover, with the change team facilitating that. It wasn't a technology-led piece of change. And I think that was really important.
It's also built up in-house expertise that will be invaluable as the system continues to evolve, even extending to managing upcoming implementations, such as strategic sourcing, without having to use external contractors. She explains:
We've got a team of people who understand how we've set up the system. And when it comes to those six monthly releases, we know what we need to do, because we understand the system, I think, probably as well as some of the Workday consultants in some aspects, particularly in the Accounting Center ...
People have really grown in confidence and competence, as a result of the transformation — both those who are responsible for the business-as-usual activities going forward, but also those people who have been involved in the transformation and our wider change team that supported it.
I think we've taken a lot of confidence from the implementation, and that's allowed us to think, well, we can do more here.
Among the success factors were careful management of the data migration, having the right mix of skills on the team, and bringing people into the office at key moments, along with rigorous planning for the cutover itself. She says:
We really understood what our cutover activity needed to look like. We looked at the ramp down of the Oracle system and the ramp up of Workday, and the significant firsts that we would encounter, what those milestones looked like. That I think that worked really well in our favour. We ran that with such discipline, with a command centre and daily calls.
Most of all, there was the 18 months of preparation, during which everyone who would be affected was kept informed. Once the design work on the system had started, it was played back to colleagues to show them what the new system would look like. They were also involved throughout the implementation process, for example being involved in testing, and in dry runs of the monthly close and year end. Those dry runs were "absolutely critical" to the ultimate success of the cutover, says Harrison. She adds:
We did [it], in real time, with dummy data, to actually prove that we could run the process to time, and everybody knew what their parts were in that process and understood what buttons they needed to press and what they needed to sign off.
Building that knowledge through the process, I think has allowed for an easier transition from old to new. I'm not saying that it's all been completely smooth sailing, because it hasn't been, and some people have found the change more difficult than others.
But I think the fact that we didn't do this in isolation, it wasn't being done to them [and] they were part of the journey, I think made for an easier time for them. And also, I think, again, enriched their roles because they understood why the system had been designed in that way.