UPDATED 09:00 EDT / APRIL 03 2015

Spreadsheet Hell NEWS

Switch from spreadsheets to cloud financials helps 75-year-old engineering firm navigate challenging economy

Degenkolb_sample_healthcare_projectsA year after Albert Cuisinot (below left) took over as CFO for Degenkolb Engineers in 2011, the 75-year-old structural engineering firm faced a business crisis. The 2008 financial collapse did not immediately impact its income. An expert in designing and refitting structures for earthquake and tsunami survival, it was involved in building several large West Coast hospitals (see photo at right) and other large, multi-year projects. The problem was that as those finished, it was not getting new projects to take their place. In a couple of years its business dropped 25 percent and the company dipped into the red.

As the business decreased, Cuisinot’s first order of business became advising the board on the company’s options to control its losses and turn its business around. Cuisinot, who has 25 years of experience in various financial positions, including a decade at Stanford University, had come from a smaller architectural firm, Steinberg Architects, where he had investigated moving that firm’s finances from a collection of Excel spreadsheets to online financial service Adaptive Insights, Inc. At Degenkolb he found another large number of complex spreadsheets.

Albert Cuisinot, Degenkolb Engineers “My first year there was not fun trying to figure out how all those spreadsheets operated. I had to figure out how the old CFO did things and all his assumptions. It was quite a challenge.” He could create a budget using the spreadsheets, but creating a set of financial options for the board to consider to get the company back on a firm financial footing was next to impossible. And beyond that, he said, “I spent more time building the budget than understanding and analyzing it, and that is not what a CFO should be doing.”

He and the CEO agreed that the company needed to move its financials to a more sophisticated cloud financial system that would be more nimble, easier to use and that could support what-if scenarios and similar financial analysis. They chose Adaptive Insights for budgeting and planning and Deltex Vision for its core financials.

“I credit Adaptive Insights with helping turn the company around,” he said. With Adaptive he was able to develop several options for the board to consider. It was not a fun time, he said. People were laid off and the company had to make some hard decisions. But in the end, the strategy corporate management chose based in part with the information from Adaptive worked.

Adaptive Insights also automated a lot of the basic work of tracking the company’s financial position. “I could show my boss exactly what was going to, I could budget in real time, I could develop scenarios in hours or a few days as opposed to weeks or months.”

Adaptive also freed him from a lot of detail work feeding  spreadsheets. “People like to call CFOs ‘bean counters’, but I think that if that is all the CFO is doing something is wrong.” The CFO, he argues, should spend the majority of his time and energy in financial and business planning, not bird-dogging expenses. This is particularly important in a design company like Degenkolb.

“Architects and engineers are very gifted people,” he says. At Degenkolb he works with the best and brightest; it recruits exclusively from the top 10 percent of the engineering classes from the top 10 engineering universities in the country. But, he says, “they have a distinctive way of seeing things,” and that does not always work in business. “I like to look at myself as an in-house consultant, somebody who provides some reasoning and other thoughts based on Adaptive.”

The danger in many organizations is that leadership may focus too closely on a single path, he says. Business leaders need to consider multiple opportunities as well as the risks of their present strategy and the alternatives. “Managing the expenses is pretty straightforward. It’s making sure that your pipeline is full and that you have the proper resources that is important. Honestly, that is what I pay most attention to. Without revenue, nothing else matters.”

Composite photo courtesy Degenkolb Engineers

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