How The Cloud Enabled Acquisition Hyper Growth
Business problem—growth through acquisition. Objective—acquire 50 to 100 locations per year. Requirement—on day one of an acquisition fully integrate financials and provide full visibility into center level performance.
When faced with this business problem, it was clear a cloud-based solution enabling the newly acquired collision repair center to fully function on their existing infrastructure topology was the answer.
Over the past three years, Caliber Collision Centers has grown from 86 locations to 197 locations (as of this writing).
The challenge was overhauling an outdated foundation, building a new software and hardware platform, and having the foundation ready within 18 months. No question, the key to success was implementing a cloud-based Management System that manages the process flow within the collision center. Half the battle was won knowing that each center has at least one internet connection in place to manage the day-to-day transactions beginning from day one. In 2012, Caliber Collision Centers selected CCC Information Services Management System. CCC provided a cloud-based solution that replaced the homegrown, on premise legacy system. Application users accepted the role of Subject Matter Experts (SMEs) in defining the functional requirements. A key focus was answering the business problem of full integration into the back office ERP system on day one of acquisitions.
Through implementation of a mutlitenancy cloud-based solution, extracting the required data requires collaboration between the software vendor and the IT organization. As a multitenancy model, no standard APIs existed requiring an “outside the box” solution development from both the provider and Caliber’s IT. With the required data was available through integrated reporting, the teams leveraged reporting APIs to pull the data, showing there are multiple methods to data extraction in cloud-based solutions where data access is limited. This enabled accounting transactions to flow for sales, accounts receivable, and accounts payable into the ERP system, answering the requirement for full integration and visibility to financial data on day one.
In other manufacturing verticals, Work In Process (WIP) is a core component to center level performance. The challenge required same solution building with an added requirement of near real-time updates to feed internally built applications in which the WIP data was a core component of the capacity planning/scheduling application.
Again, the teams worked together to leverage existing reporting APIs to pull the data. Local SQL Server 2012 databases perform the data scrubbing—allowing quick, efficient, raw data extraction to meet the timing requirement without stressing the interfaces. This answered the requirement for full visibility into center level performance.
Key learnings. When IT departments are true enablers to business acquisition execution, they are faced with providing solutions at a pace that exceeds anything in the past. The move from mainframes to client server applications and then web-based applications was the beginning of “High Speed IT”. As with all other aspects the technology world is encountering, IT departments are required to go into “Hyper Speed”.
“As businesses require IT departments to deliver solutions faster, the days of on-premise solutions are fading”
As businesses require IT departments to deliver solutions faster, the days of on-premise solutions are fading. Do not get me wrong, hybrid solutions using cloud and on-premise technologies will exist for quite a few years as moving 100 percent to the cloud is a major endeavor. When IT departments are challenged with business problems that require technology solutions that must be nimble and only require a minimalist infrastructure integration, the cloud is the enabler.
As with all aspects of relinquishing control, there are pros and cons when moving to the cloud. Businesses who spent years fine-tuning their homegrown systems to meet changing business needs are required to understand the true meaning between Configuration and Customization Changes. The multitenancy model requires businesses to consider the requests for customization as whether they are game changers for the business and decide not to share with competitors using the same system, or are the customizations better for overall industry if all system users benefit from the change.
From a transactional-based system that manages the same processes within the industry it serves, the changes are often a benefit to the industry. Customizations that are game changers providing a competitive advantage require solutions outside the transactional system and are often answered through data warehousing or custom applications. Access to the transactional data is critical when making the decision to move to a multitenancy cloud-based solution.
So what does closing day and day one of an acquisition look like?
The management system is configured prior to the closing date with employees, vendors, accounting integration, and production management. The day of closing, desktops are configured with access to the cloud based solution. Team members work to enter open WIP into the management system; this is performed locally or at a remote location. The application is ready to use when the employees arrive on day one to meet their new team members and trainers. The center is ready to work without waiting on the full integration into the infrastructure topology. That can occur on day one or later without negatively affecting the centers performance.
Leveraging the cloud enables Caliber to convert an average of nine locations per month with full integration for financial and center level data on day one. As businesses look to grow through acquisitions, IT departments become the enablers through Hyper Speed solutions.