In the throes of a quarterly budgeting cycle, Ryan Building Group Inc. CFO Kevin Davis is consumed with the tasks associated with creating a financial plan for the nearly $200-million privately held builder, which constructs 700 new homes annually.
Davis gathers data from a variety of internal systems, among them financial/accounting, human resources, payroll, sales, and customer survey databases. He and his team must then find and reconcile discrepancies or errors and ensure data from various company locations is interpreted and entered the same way, which sometimes means re-keying, in order to build comprehensive, accurate reports that can guide sound financial decision-making.
"Every quarter, the budgeting process sucks two weeks out of my life," Davis said. "It's hugely intensive."
The good news: Davis and Ryan Building Group think they've found a way to dramatically streamline and simplify this process and recapture as much as 90 percent of the time Davis puts into it. He hopes to take the 80-hour, two-week cycle down to a single eight-hour day. If successful, that will mean freeing up nine working days per quarter -- or more than seven weeks out of the year -- to focus on other strategic functions.
It's a lofty goal, and one that still must be proven, since Ryan Building Group doesn't plan to go live with the software until September. But its experience will be worth watching by other builders that grapple with the challenges of decentralization, locally autonomous operations, and difficulty gathering and rationalizing vast amounts of data. That is, virtually all builders that operate in more than one location.
How do Ryan Building Group and Davis plan to do it? Through the use of business performance management (BPM) software -- also commonly referred to as business intelligence or business analysis -- called proCube from a software vendor named Satori Group Inc.
What proCube does is extract data from a variety of existing corporate systems, which in Ryan's case requires building custom software connectors to those systems, puts it in one database, and imposes enough commonality to allow data from such diverse sources to be analyzed in aggregate. It lets end users slice and dice the data depending on the needs of the particular job. Importantly, it lets the 50 or so Ryan employees that will use the system retain their familiar Microsoft Excel spreadsheets for their analysis functions.
Satori Group CEO David Libesman describes his company's proCube product as "data acquisition" software that pulls data from the various back-end systems into a single place and applies a cohesive data model. It also includes the standard layout or "schema" for how data will be represented in popular databases, such as those from Oracle or Microsoft. In Ryan's case, it is using the Microsoft SQL Server as its database of choice.
Reports Geared to Geeks
"It wasn't difficult to get information out of our systems before," Davis said. "But that information was designed for the accounting geeks and designed in a format that whoever created an application thought was best. So we weren't able to tie all these applications together and get precise reports."
Coming up with ways to standardize data -- how it's interpreted, entered, stored, and so on -- is likely to be one of the bigger challenges as Ryan embarks on this project, according to analysts and industry watchers. "The effort here isn't necessarily to put in the tools but in the standardization of metrics used to capture information and getting people to agree at some level about nomenclature and the meaning of metrics," said Mark Callin, executive director at Realfoundations Inc., a building industry business consulting firm.
Achieving greater consistency and standardization is, in many ways, anathema to the highly decentralized and autonomous operations of national builders. But Davis has a tendency to go against the grain. "Different people tend to be very decentralized and brag about it. We take a little different approach and centralize finance, accounting, information technology, and human resources. We think it's cheaper to do it that way. It is in every other industry."
Davis' initial exposure to Satori is anything but typical: He read about a Satori customer in a magazine and he cold-called the company looking for more information about its software. He admits to having looked at numerous analysis systems in the past, only to conclude that most were "vaporware or close to it." (In computer-speak, vaporware is the derisive moniker for software packages that promise the moon but deliver something closer to a box of rocks.)
One key selling point Davis found upon interacting with Satori: The company's philosophy is to adapt its software to customers' business process, rather than inflicting pain in the other direction.
Satori is currently building interfaces to Ryan's existing systems as well as building some of the more common reports that will be used.
Davis said his company will spend in the $250,000 to $300,000 range on this project, which is not an unusual investment in technology for his company. The company didn't build a formal cost-justification model for the project. "It wasn't a question of should we do it, more that we had to do this," he said. This is the same company that began to "retract," as Davis put it, scaling back its investment in land and therefore its growth outlook, all the way back in early 2001, in the midst of the prolonged housing boom.
Financial operations aren't the only area in which Ryan is pushing hard toward more standard data and procedures; the builder has hired Woodland, O'Brien & Associates, a building industry research and consulting firm, to standardize its customer surveying process. But John Woodland, of Woodland & O'Brien, noted that greater consistency is critical across the operations of companies like Ryan. "Inconsistencies are common among most builders," Woodland said. "They walk the fine line between letting divisions use their autonomy to address individual markets and having consistency throughout an organization to get a common theme and a common direction."
That common direction appears to be taking hold at Ryan Building Group.