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Derek Rose

Finance IT case study: Nightwear reporting secrets of Derek Rose

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9th Apr 2014
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“You just need good data,” according to Derek Rose CEO Sacha Rose, who says specialist reporting tools have saved the company thousands by avoiding unnecessary mistakes. John Stokdyk finds out how.

When PrecisionPoint’s Michael Evans urged AccountingWEB members to raise their game when it comes to management reporting, we asked if he could point to any customers who could prove his point. Sacha Rose, the CEO of luxury nightwear company Derek Rose came to his rescue.

Rose describes himself as a “geeky” chief executive. He likes to get to grips with technology and in the past was comfortable working with Cognos, ODBC tools and Microsoft Access to extract data from the firm’s old Unix-based accounting system.

A few years ago, when his company installed a Microsoft Dynamics NAV enterprise resource planning (ERP) system, “We knew the data we wanted to capture,” Rose says.

There are only about five or six fields that drive the analysis within the company: dates, measures, the accounts they come from, product types and materials, items or customers. Nevertheless, Rose adds, “We knew that if we made the effort and captured the data up front, we could slice and dice it when we got it back out.”

Rose was aware from the start that the reporting in NAV did not meet his expectations. Initially the CEO and finance team at Derek Rose were advised to use SQL Server Reporting Services (SSRS) to extract data from Dynamics NAV. But the complexity and inefficiency of trying to do it all themselves prompted Rose to look for alternatives on the net. He found potential solutions from Ariacom, SAP and PrecisionPoint.

All reporting tools have their idiosyncrasies, but Rose and his team decided that PrecisionPoint would most easily fit into the Dynamics NAV environment they had created.

Having done the configuration work on the ERP system, getting the data into PrecisionPoint’s pre-built data cube was pretty quick. The installation was not cheap, but with hindsight Rose could see it was cost effective.

But, he adds, “You can’t run a business unless you have clear information. It would cost more in mistakes than the cost of putting it in.”

Since then PrecisionPoint has become a pervasive feature of corporate reporting at Derek Rose. The CEO describes how he and his team will frequently turn to the software during meetings. “Two or three of us will talk about something and then just write the reports on the fly to get the information during the meeting. We’re talking seconds, not minutes.”

As well as Rose himself, the reporting system is accessed by the head of finance, head of sales and anyone else who needs to refer to the ERP source data. By way of example, Rose recently sat down with the head of ecommerce to dig into sales by category. The company’s designers also have their own specific reports to identify which product lines are selling best: checks, stripes or plain fabrics, for example, or cotton versus silk pyjamas.

Along with the finance team, the CEO himself probably relies most heavily on the reporting system. A master report with 35 tabs gives him “everything I need on the business”, including reports on inventory; sales; customers; profit margins by product group; top sellers; web sales; sales against last year, and so on. Rose can look at any of these tabs at any time to see where the company stands, and has a separate report summarising group sales every day. The accounting and reporting systems are client/server applications running in-house, but can be accessed from laptops over the internet using remote terminal server software.

The finance team loves PrecisionPoint, Rose says, “because it makes their life easier”. All sales from home and foreign subsidiaries are consolidated within the software and management accounts are held as standing reports; producing them involves clicking a “Refresh” button. “The speed they can churn them out is superb,” says Rose.

The reconciliation of the PrecisionPoint reporting cubes is so reliable, he adds, that when discrepancies do appear they can usually be traced back to data entry errors on the ERP systems.

According to Rose, the secret of good management reporting is “common sense” and paring information back to the essentials. Report blindness can be a risk where it’s so easy to get reports out that you can lose focus or start drowning in data.

“Every business has different KPIs,” he continues. Derek Rose nightwear has to perform well in a competitive market. So sales reports will show whether products have improved over the two previous seasons, and if not, they’re pulled.

When Derek Rose launched a new underwear range in 2013 that included seasonal and “continuity” items, Rose explains, “We used trends in continuity items to forecast stock; and the seasonal goods we tracked by the proportion of customers who were buying them and which agents were selling them.”

PrecisionPoint makes it easy to look at inventory in different ways, or to analyse measures such as debtor days, he explains. An inventory report, for example, helped identify that stocks of fabric had built up by the spring 2013, which prompted remedial action.

Aged accounts receivable have an impact on the business, he continues. Having identified that the company wanted to keep debt over 90 days old below 2% of the total figure, it was a simple matter to create a report to keep an eye on it.

Rose confesses that he has “no love” for his Microsoft ERP system, and while Dynamics NAV does produce an aged debtors report, the PrecisionPoint version is “much easier to look at”.

The Derek Rose CEO takes a very hands-on approach and keeps an eye on a lot of detailed numbers, but says his job is to “surround myself with people who are better than I am - but not to get so far from the detail that I can’t help them, or quiz them on what’s happening”.

Having shown how PrecisionPoint helps him to play this role, he says the question facing other management teams is whether good reporting software is “nice to have, or must have”.

“When we looked at PrecisionPoint it was a lot of money. Now that we use it, it’s a must have. You need to have high quality reporting. PrecisionPoint may not be right for everyone, but here it underpins how we get data and make decisions. You just need good data.”

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