From spreadsheets to integrated business planning

From spreadsheetsto integrated

business planningFebruary 2020

Virgin Money’s cloud enabled finance transformation journey

Maureen BlairHead of Finance Change at Virgin Money

• About Virgin Money• Transformation roadmap1

Agenda

Throughout the duration of the project PwChave remained a trusted implementationpartner. Using their EPM knowledge and skillset they have been instrumental in advisingon design and protecting the overalloutcome. They have adapted to our changein business needs and upskilled the teamduring the journey.

Maureen BlairHead of Finance Change at Virgin Money

Maureen is a Chartered Management Accountant with over 21 years in Financial Services. She has worked in various roles from Business Partnering, Corporate Reporting, ICAAP to project management roles in Basel, FinRep and FATCA. She’s been the Head of Finance Change for IPO separation, Oracle Cloud, and currently VM integration.

“

• Key challenges addressed

• Implementation approach2• PwC’s thought leadership

• Lessons learnt3• Benefits being achieved

• Key success factors4

Transformation roadmapVirgin Money have been on a transformation journey since the separation from NAG, when they kicked off a detailed consultation to look at implementing Oracle HFM for consolidation. This work involved a roadmap for future finance systems that would work with Oracle HFM. That led to implementation of EPBCS in Phase 1. Post acquisition of VM the transformation journey has continued with Phase 2, to integrated CYBG and VM processes in EPBCS.

About Virgin Money

Virgin Money (VM) is the new disruptive force in UK banking. Bringing together the combined history and expertise of Clydesdale Bank, Yorkshire Bank and Virgin Money, we are the only bank outside the ‘Big 5’ that boasts a genuine full-service personal and business banking capability. We serve 6.6 million customers across the UK through a digital-first approach that offers leading online and mobile services, supported by telephone and branch banking, including a national network of branches andbusiness

banking centres. We are structured around three divisions –personal, mortgages and business – offering a full range ofproducts and services for consumers and small and mediumsized businesses, delivered through our leading technologyplatform to deliver a consistently world class experience forcustomers. Our ambition is clear – to make Virgin Money a newforce in consumer and business banking that will disrupt thestatus quo.

1

1

> 2016Post Separation from NAG, CYBG started looking at Oracle HFM for consolidation, which laid the building blocks forimplementing EPBCS

July – Sep 2017CYBG engaged PwC to createa blueprint for their new P&Fprocesses. This included:1. High level requirements2. Target ‘to-be’ process

design3. High level solution design4. Implementation roadmap

2018Commenced Release 1with focus on:1. Strategic target setting2. Financial planning3. Costs planning4. Workforce planning

Immediately followed byreleases 2 and 4 withfocus on productrevenue models:1. Mortgages2. Deposits3. Credit cards4. SME lending5. Personal loans6. Stress testing

CYBG/VM integration phase(Phase 2) consists of the following:1. 2 Releases2. 7 work packages3. Each work package will have

multiple/iterative sprints

September 2019CYBG/VM engagedPwC to deliverimplementation ofEPBCS for VM andintegration acrossthe organisation

Post separation

Blueprint phase CYBG planningphase (Phase 1)

CYBG-VMintegration phase(Phase 2)

Disciplinedagile Waterfall

Agile

Prototypedesignapproach • Model office

walkthroughs• User familiarisation• Focussed sprints• Reports, Integration

development andtesting

• Data migration

• Model officewalkthroughs

• User familiarisation• Focussed sprints• Reports, Integration

development and testing• Data migration and

reconciliation

• Systems IntegrationTesting (SIT)

• End to End testing (E2E)• Data migration and

reconciliation

• User AcceptanceTesting (UAT)

• Cutover• Data migration and

reconciliation

Integrations

Variance tostandard

Userengagement

Key challenges addressed

Implementation approachWe leveraged PwC’s ‘disciplined agile’ approach, balancing speed with delivery risk. It is refined by practical experience, introducing agile delivery within a controlled framework. Iterative design with prototypes have lead to better quality solutions, earlier visibility and greater adoption.

Timeline

Enter P1 Enter P2 Enter P3 Enter P4 Go/No Go

P1 P2 P3 – SIT E2E P4 – UAT

Process

• The as-is process was labour intensive and fragmented.• STS, business planning and forecasting processes were

too time consuming and thereby places a huge burden onthe Finance staff.

• Changes were difficult to make and took a long time toturn around.

• Updates were often done at the top level late in theprocesses, which resulted in multiple versions of the truthemerging.

Information and data

• Product and segment/sector definitions across thebusiness were not standard, which caused misalignmentsbetween actual data source systems (GL, HFM, Datawarehouses).

• Data was sourced from multiple input sheets anddata sources, increasing the risk of a lack of integrity inthe numbers, adding more manual reconciliation burdenon finance. These dependencies made the overallprocess inflexible.

Technology

• The processes were disparate and there was adependency on multiple systems and Excel sheets.

• If assumptions changed during the planning phase thisresulted in significant rework of files. This impeded theability to review quickly and agree on the outputs.

• To address the risks caused by lack of automation, therewere numerous manual control steps throughout theprocess to enable the delivery of a robust plan.

People and organisation

• Preparing the plans in multiple systems and time constraints in producing outputs meant less time available for the value added planning activities (e.g. creating what-if scenarios, analysing the business performance and helping drive execution of the business strategy)

The EPBCS project alleviated the Technology and Information & Data challenges directly. It has also started enabling transformation andimprovement across the People & Organisation and Process domains, which is an ongoing transformation following the VM integration.

2

2

PwC’s thought leadership

Lessons learnt

• An open and honest relationshipOpen and frequent engagement between all project stakeholders is keyPwC listened to client feedback in Phase 1 and restructured the staggered delivery plan with additional resources supporting parallel workstreams.PwC also facilitate bringing a representative of Oracle onto the Steering Committee for improved communications among all stakeholders.

• Data readinessSprint timelines are heavily dependent onimplementation team being provided with a realistic sample dataset, so that models can be evaluated for accuracy as part ofthe implementation phase ahead of user acceptance testing.

• Availability of resourcesAvailability of Finance SMEs is required during critical periods, including design sessions, sprints and user testing. Periods of unavailability have the potential to delay sprint timelines.

• Scope creep and additional change requestimpacting timelinesSolution design requires buy-in from business partners to ensure the number of changes request during user testing is minimised. Changes to design late in project puts timelines at risk.

• Working with resources across multiplelocationsFinance teams who are based in multiple officelocations away from the Group Finance need to beproperly engaged throughout the project.

Virgin Money leveraged PwC’s thought leadership:• PwC knowledge capital explained what the aspects of

being World Class were

• Listened to PwC about what other companies are doing

• Benefited from other’s lessons learned and pitfalls

• Decided not to bite off too much at once

• Held a number of reference calls

• Realised that best and better practices wouldunlock benefits

• Avoided ‘smelling our own air’– The way its always been done

– Why it can’t be done

• Set Guiding principles in the Blueprint e.g. data modelalignment, process simplification and standardisationvia Cloud enablement

3

3

© 2020 PricewaterhouseCoopers LLP. All rights reserved. PwC refers to the UK member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.

200120-170005-SM-OS

Benefits being achieved

Key success factors

Enabled multi-scenarioplanning to facilitate stress and scenario planning. Along with driver based planning capability, this allow Finance tounderstand the movementbetween each of thestresses.

The focus of planning is moving from preparing androlling over spreadsheetsto collating drivers andunderstanding thesensitivity on drivers.

1

Automated calculation of all KPIs improved the decision making.

3

Opportunity provided to achieve annual recurringsavings of £1.3m due tolower staff costs.

2

Removed the need to consolidate plans in spreadsheets, created the capacity for more value added activities.

4Achieving consistent datamodel and better masterdata governance acrossFinance.

5

Moved to driver basedplanning, ensuringcommon assumptionsused throughoutbusiness.

7

Eliminating maintenance ofdisparate models andplanning tools.

6 8

4

4

Business engagementand buy in

• A critical success factor in the implementation project is buy in and engagement from thebusiness, specifically Finance, Finance Business Partnering and Business Owners. Without thisengagement the solution and approach will not be accepted.

Multi-skilledproject team

• The financial planning process sits at the heart of the planning project. It is essential that the project team combine both finance, planning, Oracle and broader technology capability in order to successfully engage stakeholders and develop an integrated solution as “One Team”.

• The implementation team needs to combine both deep technical EPBCS experience, broaderfinance and regulatory reporting experience with large scale delivery experience. This is a corerequirement to deliver an integrated ‘fit for purpose’ solution.

Project execution • Transforming the planning processes and integrating the plans via EPBCS in such a tight timeline is a complex challenge. The as-is model bridged treasury and finance in multiple planning and reporting processes and the project needed to replace it successfully.

• The implementation team needs to understand the key challenges from both a technical,business and stakeholder perspective and can work to help navigate them.

• There is a need for the implementation partner to work as part of a joint team.

• Knowledge transfer is key to project being successful during and post implementation.

Programme and SolutionIntegration

• Planning is a part of an integrated finance solution and therefore is dependent on otherprogrammes. Implementation partner needs to work with the project team pro-actively to ensureintegration of approach and solution between the different projects.

Cloud adoption • Moving to the Cloud is a strategic decision to reduce the maintenance costs, to be on the latest and greatest version of the application and leverage the out of the box standardised functionality. This is not without risk and the process of transition and adoption needs to be carefully managed.

• The implementation team needs to facilitate this process by working with the project team toengage Oracle, in order to leverage the best possible outcome.