CFO Profile: Dexter Clarke, CFO, Motorserve
The Motorserve board gave Dexter Clarke six months to set up an ERP for car servicing and repairer Motorserve after IAG bought it from the NRMA. “We had to set up finance, payroll, the systems that run our workshops – everything had to change,” Clarke says.
Moving to another ERP and integrating it with insurers’ systems in six months was always going to be a challenge. The fact that Motorserve was attempting it during the opening months of a pandemic made it even harder.
Nevertheless Clarke, who has several ERP migrations under his belt, pulled off the project in just four months.
“We delayed the launch by a month because one of the other systems wasn’t quite ready. So we actually could have done it in 12 weeks,” Clarke adds. “We started the business in the middle of the global pandemic and managed to do all this. Just shows what you can do over video.”
Keeping the wheels rolling
The Motorserve acquisition in November 2019 was part of IAG’s strategy to provide a one-stop-shop for customers. Providing a drop-off point for customers for collision repairs and car servicing were part of its enhanced “motor repair model”.
Clarke joined the business as CFO in April 2020 with a brief to set up Motorserve on its own systems. Clarke was very familiar with the automotive industry after stints as CFO for Cox Automotive, Futuris Automotive and tyre retailer Bob Jane.
The fact that Clarke was a newcomer to Motorserve gave him the latitude to talk to staff working at every level of the business. He found out what people liked about the current system and what wasn’t working.
“I just tried to get my mind around what the expectations were,” Clarke says.
With hundreds of makes and models driving through their doors every day, mechanics needed to order thousands of specific parts from a wide array of suppliers.
The former ERP was heavily customised to meet the needs of the workshops. The fully integrated system pulled information from multiple platforms into one database. However, its complex design meant that any problems such as matching purchase orders to invoices involved many staff, right down to the store managers, Clarke says.
“When something went wrong it took a lot of people to fix it,” he adds.
On investigation, Clarke found that the process couldn’t keep up with the dynamics of workshops and suppliers.
“If you bring in your 2011 Toyota Corolla, our guys in the store will ring up the local parts supplier. The supplier will say, ‘We’ve got something that might do the job. We’ll get it over to you and see how it goes.’ Trying to raise a purchase order for that conversation is complex.”
The best approach was to simplify everything. Clarke utilised job numbers which were allocated to every car for the supplier to add to their invoice. “So we’re replacing a purchase order, a delivery docket, and probably a bunch of other things,” Clarke says. “We made the role that the stores had to play far simpler. And of course they loved it.”
In the past, the Motorserve workshops employed a staff member just to deal with paperwork. After the implementation, those staff are doing far more valuable work delivering an efficiency saving and improving the customer experience.
Approach to the project
Clarke has several rules of thumb when it comes to ERP projects. These rules are born from bitter experience. “I say to everybody, I don’t have all the answers but I’ve got opinions based on my past experience whether that be good or bad,” Clarke says.
The first rule is to strike out ERP systems that don’t match the size of the business. In 2020, Motorserve was a mid-market company with 23 sites with 250 staff, and was still growing (it has expanded to 36 sites with nearly 400 staff today).
Enterprise systems would have been too expensive and complex. He also looked at small business accounting software but found that they wouldn’t be able to keep up with the business growth and complexity.
“Stick to the middle market was rule number one. And don’t get sucked in by the hype of some smaller, emerging systems that aren’t able to scale with you. That set the range of software providers I was talking to,” Clarke says.
Eventually Clarke had two ERPs on his shortlist.
In a previous project in Dynamics “We had to build a custom ordering system to connect the finance, procurement and manufacturing departments which Dynamics suited better. In the evaluation phase NetSuite advised we’d be better off building that separately so we went with the all in one approach in Dynamics,” Clarke says. For Motorserve the scope was far tighter “If you’re going to use a system within its core capabilities with less customisation, NetSuite is probably the best in the marketplace.”
Customise at your own risk
Building or buying a separate ordering system instead of customising the ERP was right in line with Clarke’s second rule of ERP projects – don’t customise if you don’t have to.
“My default position these days is if you can change your processes to fit the solution, then it’s worth considering. Because if I customise it then every time I’m going to do something down the track – every upgrade, every change I make – it makes everything more complex,” Clarke says.
Sometimes CFOs will give operations carte blanche to customise an ERP. However, every customisation is loaded with cost and risk. The cost is not just in the upfront programming hours, although these can certainly mount up to budget-busting proportions. The bigger issue is that the block of code creates an ongoing liability the company has to maintain and upgrade.
Clarke says that even the most tightly scoped projects are vulnerable to the last-minute request to add an unplanned feature. His advice – hold firm.
“There’s a lot of work in that upfront scoping and talking to people, making sure you really understand what you will need out of the system is critical. Holding firm is really important,” Clarke says. “Given the timeframe we knew we had to stick to the core parts of the financial processes.”
Motorserve went live with accounts payable and receivable, general ledger and accounting, fixed assets. Clarke used the NetSuite SuiteSuccess implementation program which supplied best-practice processes for common finance activities. This suited Clarke’s desire for a highly regimented, vanilla implementation.
As a consequence, the implementation went very smoothly and quickly.
Move your headaches to integration
There were complexities, of course, however these were restricted to the integration work with supporting systems.
“If you need something custom, find someone who’s already done it. Use that solution and integrate it. It moves the headaches from within your ERP to the integration piece,” Clarke says. “Integrations are a headache, there’s no question about it. But you’re not stuffing around with the core finance processes. You’re not worried that making this change is going to all of a sudden change something in your general ledger, which will cause you a big drama.”
This is Clarke’s third rule. Feature requests outside the standard setup of the ERP may be better addressed by a separate software, at least initially. This tactic achieves several objectives. It reduces or eliminates customisation of the core ERP platform, which means that implementation can proceed swiftly and easily; it ringfences risk to the integration stage, not implementation; and it gives the business time to test features in dedicated applications and then decide later whether it is worth the effort of building them into the ERP.
Motorserve took this approach with reporting. Rather than creating custom reports within Oracle NetSuite, Clarke added a business intelligence tool called Domo. Domo included software connectors to NetSuite that sped up integration.
“We were able to start doing a lot of our reporting and analytics through Domo very quickly,” Clarke says. “It works very well because we’re ingesting data sources from a whole bunch of other places. Rather than doing a lot of non-financial reporting within NetSuite, we use NetSuite as our engine and Domo as a turbocharger.”
Next up is moving inventory into NetSuite, and a review of all processes after the first year of use. Motoserve has contracted Liberate IT to guide this expansion, improve processes and further tailor NetSuite to local requirements.
Clarke says Motorserve didn’t require a ROI on the ERP project as it just had to be done. Given that the acquisition required installing a new environment within six months, the expectation was that something wouldn’t go to plan.
“By hook or by crook, we managed to navigate our way through that with no failures,” Clarke says. “Most people hear horror stories about ERP implementations. We just got it done on time and under budget. That’s about as much ROI as most people really want.”