Durban-based Spring Lights Gas is South Africa’s first BEE-led marketing and sales venture of pipeline gas.
Established in 2002, the company is a joint venture between Sasol Gas (49%) and BEE firm Coal Energy and Power Resources. It supplies mainly industrial and commercial clients in KwaZulu-Natal.
The need
While small in some metrics (nine staff and one office), Spring Lights Gas punches above its weight in revenue terms. As such it requires financial, reporting and budgeting systems that do justice to the volumes and complexity of its business transactions, and allow for growth.
With that objective in mind, the company made use of SAP’s enterprise resource planning package. To prepare budgets and reports (balance sheets, income statements, management accounts and so forth), it used Excel.
Then, in July 2009, Spring Lights Gas replaced SAP with the Sage financial system, at the same time installing idu-Concept (though initially only to create reports – its budgeting module was to follow later).
“We approached two service providers for a financial system. Both recommended idu Software,” says Shanon Arjoon, Spring Lights Gas financial accountant. “We invited them to make a presentation, and found both the presentation and the product to be brilliant.”
Unusual installation
This sequence of events clarifies why idu’s reporting functionality was implemented first and its budgeting was to follow subsequently (in January 2010, after this article was written). Reports are after all a natural outflow of a financial system. Generally, however, idu’s budgeting module is implemented first, as its core.
Being of unusual structure, Spring Light’s installation proceeded in somewhat different fashion from the norm. With no departments to speak of (other than a marketing and financial department), no branch offices and relatively few employees, the usual idu distinction between users and administrators fell away. Three Spring Lights administrator-users (all of them accountants) are each responsible for a portion of the budget.
Challenges and successes
Arjoon says there were several project successes, but only one or two challenges. One of these was the steep learning curve required for administrators. “Perhaps the amount of focus required by the core Sage portion of the installation defocused us,” says Arjoon. “idu has been very supportive in helping us to take the system on board and making minor report modification changes” says Arjoon. “That type of support will be our responsibility going forward, when we’re over the learning curve.”
The idu impact
Nevertheless, she says, it has been a great experience. “Our objective with implementing idu, which was to automate reports generation, was achieved.”
Explaining that reports had previously been created with data downloaded from SAP and converted for use in Excel, she says this process was laborious and errors were hard to discover and eliminate.
“By contrast, idu receives data directly from Sage, so now we produce up-to-date income statements and reports at the touch of a button. Only when we do forecasting does the process require some human intervention. In this way, user error is minimised and the process greatly accelerated.”
From service to self-service
Forecasting, one of the few remaining manual processes is also in the process of being automated, with custom work being done by idu, she continues. “Our pricing is very complex, but the consultants were great at getting to understand our business. They are helping us create a mechanism for uploading sales volume forecasts to automatically calculate turnover. At the moment it is done on Excel.”
“Generally it has been a real pleasure working with them – if one consultant is unable to resolve a query, someone else is. They always make time or deliver on a promise to get back. They will always either help or give time frame if not able to. idu KZN is a professional and amazing team,” says Joy Engelbrecht Financial Manager.
All this support, she acknowledges, is something Spring Lights Gas will eventually want to wean itself off. In preparation for self-sufficiency, the company has not taken a service level agreement with idu. “We want to run the system completely by ourselves – in fact, that is what idu has recommended.
Forward-looking features
One of the future functions Spring Lights Gas is eyeing is idu’s budgeting. “Traditionally a long-winded, the process can be reduced to two to three weeks with idu’s unique design features, which allow wide-spread budgeting participation,” says Jackie Agnew, idu Software KZN consultant. “These include the software’s online nature, rights-based access and single data repository.”
For Spring Lights Gas, these architectural principles overcame a central objection to Excel – the fact that worksheets tend to mutate and proliferate overnight. “In idu, data is immediately available to users and administrators on being entered, allowing large-scale participative budgeting without compromising data integrity,” says Agnew.
“Budget consolidation, previously a strenuous process, can happen in seconds. The difference is that spreadsheets may run into their hundreds in a complex budget, and must be laboriously consolidated in complex, error-prone processes. Cost is easier to budget for with one database – there’s no merging of worksheets.”
The budgeting module also allows setting up rules to limit repetitive work. Arjoon explains that regular board meetings require a considerable amount of director travel from different parts of the country. “Rather than budget for each director’s ‘account’, the module calculates expenses in the background, once the number of meetings per month are entered.
The next level
Besides budgeting, Spring Lights Gas will make a call on what other functionality it will adopt in the new year, says Arjoon.
“Right now we are not fully focused on it yet, but given our experience of the system and its creators, we foresee a long and beneficial relationship. It is a great product that has made reporting efficient and minimised time to report as well as user error. We look forward to going to the next level.”
