Why a startup from EY in the Netherlands is aiming to go global

29 January 2019 Consultancy.eu

Following its successful launch in the Benelux, Big Four firm EY is looking to bring a new financial planning tool for startups to entrepreneurs and startups across the globe. Having helped a succession of startups in the Netherlands, Belgium and Luxembourg, EY Finance Navigator is to be gradually expanded to more than 50 of EY’s offices.

A financial plan is essential to success. It shows when and how much funding a company needs to raise, while providing insight into the future financial impact of strategic business decisions companies make today. By their very nature startups and scale-ups operate in high-risk environments, and not being prepared for a shortfall in cash, or an inability to raise funding can mean bankruptcy.

Despite this, following decades of working with startup companies, accounting and advisory giant EY found out that, while large companies and mid-sized businesses often possess tools to manage their financial planning and capital funding, startups lack similar options. For these new companies, which may well be short on cash, as they fight to get off the ground, this may be even more important. Rather than turning to a programming solution, though, many such firms try to tough it out on basic set-ups to save on money.

Lars Vereijken, co-founder of EY Finance Navigator, explained; “We found out that practically all startups we supported struggle with financial planning and therefore we built an intuitive Excel template for them to have a good starting point, however, Excel has its disadvantages too… errors creep in...”

In order to tap into the demand for a financial planning tool which could both improve performance and cut down on the costs a startup is faced with, Vereijken and his team sat down to devise a new online software solution. They aimed to build something to make financial projections easy and help entrepreneurs better understand their financials, while making sure start-up founders / CFOs remain in control of their own financials without hiring a financial expert or bookkeeper to do it for them. At the same time, the consultants looked to improve functionalities compared to Excel, such as adding bench-marking info and an algorithm providing tips and advice on how to improve, and create something more appealing in terms of ease-of-use, interface and design.EY Finance Navigator overview

Intrapreneurialism

The idea they came up with would go on to become the EY Finance Navigator, but not before a stringent process of development and piloting. First things first, the team had to participate in an internal corporate innovation programme called “Innovate EY” – designed to promote entrepreneurship at the Big Four firm – to turn their idea into reality.

Wout Bobbink, co-founder of EY Finance Navigator, expanded; “In the Innovate EY programme EY colleagues get the opportunity to work on their own new business ideas resulting in new EY solutions for the market and in internal efficiency improvements… By the end of the accelerator programme we had about 50 pilot customers signed up and a very good idea on what our software should do in terms of functionalities and what it should look like in terms of design… That result convinced EY Netherlands’ board to provide us with the time and funding needed to execute our plan.”

The group immediately started software development, and ended up with its first release in the Netherlands at the end of 2017. It wasn’t all plain sailing however; “Our business case and way of working (a SaaS model) was quite new for EY, which meant that together with our colleagues we revised certain internal processes to fit with our digital offering.”

“While doing so we tried to build good relationships with our clients to collect their feedback regarding our software. Based on the feedback we gathered we developed a second version of the tool, which was the one which was released about two months ago, ready to be scaled globally.”

Co-founder Bobbink described the resulting platform as a tool which makes it easy to fill out the data to create a financial plan that is in line with the business plan, using a step by step approach, even if the user doesn’t have a financial background they are able to build it themself. The platform which exists today, having been groomed within EY in a classic display of ‘intrapreneurship’, is finally in a position to operate as a standalone offering to clients.

Bobbink said of what the platform offers; “The insights we provide help the user improve their financial models and provide actionable tips on how to improve the user’s financial management… By forecasting (using different scenarios) a startup can better prepare for such situations. Moreover, startups and scale-ups need a financial model to calculate whether they can achieve a viable business and need to be able to show their companies’ potential towards investors.”EY Finance Navigator solution

Going global

Following a successful spell of aiding startups across the Benelux region, it is little surprise that the project is looking to go global at last. EY has more than 700 offices in over 150 countries, offering a fruitful hunting ground. At this moment, EY offices in more than 40 countries, including the UK and US, have shown their interest in using or selling the tool to local entrepreneurs, startups and scale-ups. To take advantage of this, EY Finance Navigator is building a global ambassador network within EY, meaning that in every country there is a go-to contact person for questions/inquiries related to Finance Navigator.

“These colleagues are typically involved in local startup ecosystems,” Bobbink said. “We can do a lot from the Netherlands, but if clients or prospects want to get in touch we want to be reachable in their own language with a person that is close by. We are selling online software, but personal contact and building personal relationships is very important for us.”

Moreover, he added, 'going global' means the group’s online marketing efforts will become more globally oriented instead of Netherlands focused. Over the past couple of months this resulted in an explosion for the platform, which now boasts users in about 30 different countries, from Australia to Argentina, from Thailand to Sweden.

The next hurdle that EY Finance Navigator faces, having become a global player in such a short time, is how to adapt to new markets and cultures. The platform is still exclusively English-language-based, which Bobbink justified as it is 'the language of startups', but how will it adapt to other ways of working around the globe?

Alexander Matthiessen, the third co-founder stated; “Exactly because of the issue this question addresses we have started building the global ambassador network we explained earlier, so that customers can talk to EY Finance Navigator ambassadors locally. For us this ambassador network serves as a learning mechanism teaching us about the differences in needs/ways of working in different countries. This helps us in adapting our tool to local requirements and perhaps at some point we might even build country-specific add-ons to our tool.”

In the end, the co-founders show belief that their solution will work on the back of the benefits to startups. Matthiessen concluded; “Having a financial plan in place is not only useful for an entrepreneur, but very often also a requirement in the process of raising funding. With our tool, users can easily create such a professional financial plan, without a finance background, saving them time of having to build one themselves. Users are better prepared for investor engagement by better understanding their financial case (funding need, profitability, margins, etc.) and the financial terms/definitions when raising funding (speaking the language of investors)." Furthermore, “users can create different scenarios of their financial projections in a fast way, enabling them to make informed business decisions. Our tool helps them anticipate the cash shortages that can lead to bankruptcy and the funding needed to achieve growth, in different scenarios.”

Related: Startups attract record level of funding from venture capitalists.

Four tips for deploying agile in the finance function

11 April 2019 Consultancy.eu

The success of agile working in the IT domain has inspired other departments to adopt the approach. In finance, agile has rapidly gained ground as a key approach for making the function more responsive, forward-looking, and, most importantly, proactive towards the business. Daniela Pleiner, a consultant at Blinklane Consulting, explores how finance can embrace agile and scale the methodology across the entire function. 

Financial Agility is realised when the finance department works in an Agile mode (e.g. using Kanban methodology) and when traditional financial processes within the organisation are adapted to support the agile way of working. With agility in place, finance can enjoy the adaptability and responsiveness needed to transition into being a strategic partner to the organisation. 

Achieving a more mature level of Financial Agility – one where agile has been scaled from a pilot environment to a more enterprise level – is however no easy feat. Typically, finance functions are used to working along the lines of rigorous and demanding processes – this is to a large extent in direct conflict with agile's core values and principles aimed at removing overhead, friction, and fostering co-creation and collaboration. 

Based on Blinklane's year-long experience in agile and finance transformations, Daniela Pleiner outlines four tips for successfully deploying financial agility:

Four tips for deploying agile in the finance function

Train your people

Behind every financial system are real people. Those professionals have to be made aware of the implications of the agile transformation on the financial processes. Therefore, it is truly important to go back to the basic agile values and to openly address challenges in the context of finance. The goal is to trigger the right discussions. You will be surprised how open they are for changes once they grasp the concept! 

Show the benefits

When you want to become a truly agile organisation, relying on business as usual from the finance function is no longer viable. However, putting some pressure on finance and asking for immediate changes to cope with agile will not help. Instead, show them the benefits from their perspective. Think: might the new process simplify their administration? Can we reduce manual data processing by linking to an agile project management tool? Or what kind of new data could we use to make better investment decisions? 

Simplify and visualise

Changing accounting approaches or funding value streams can be quite big undertakings. Too often employees say, “this is not possible in our organisation”, “we are different”, or “we need to see the return on investment” and they become doubters. What helps in such situations is to simplify the complex processes and visualise alternatives. Seeing is believing here. 

As an example, what about introducing the mindsets of venture capitalists and their investment strategies? Venture capitalists aim for a diverse portfolio that fits their strategy, they mostly invest in teams they believe in and have frequent feedback loops where the start-ups can demonstrate their value. In other words, venture capitalists plant a seed, but even if they can’t harvest the fruits yet (i.e. direct revenues), they do not bail out. This is not so different from the basic strategy at the heart of the agile approach. 

Be realistic

Turning long-established financial processes around in a few weeks? Very unlikely. In a few months? Hard to achieve as well. Bravely challenging the status quo and making small steps here and there? This is the way! Most often a hybrid version is the right first step. The goal is not to disrupt all the financial processes within the company to make them fit the Agile value delivery. Rather it is vital that Finance has a constructive role to play in supporting the business to be more effective, be it in quick funding decisions or intelligent process automation. 

Make the move: a final comment

Finance should be encouraged to be a truly supportive function – a value promoter – and Financial Agility is the key word here. For a scaled agile transformation to be truly successful in finance, it is key that the function leverage the change capabilities of the organisation. There is no question that the start will be difficult, uncertain and slow. It requires a fundamental mindset change but the benefits are certainly worthwhile.