EBS and NAV deliver early Christmas present to Circadian
Circadian Technologies Limited
Microsoft Dynamics NAV
When listed biotech company Circadian Technologies Limited recognised that preparing its half-yearly financial reports for the Australian Stock Exchange was becoming a financial and administrative burden, the company decided to replace MYOB with Microsoft Dynamics NAV, deployed by national ERP software specialist Evolution Business Systems (EBS). Since installing NAV, Circadian has reduced reporting times, lowered administrative overheads, eliminated errors and provided finance staff with their first ever chance to take annual leave during Christmas. Benefits delivered by Microsoft Dynamics NAV and EBS include:
- Cutting two days from the time required to prepare half-year financial reports
- Consolidating five separate databases into one integrated system
- Greater accuracy through the elimination of manual processes and external spreadsheets
- Managing project budgeting and expenditure more effectively than other solutions
- Availability of consolidated reporting at the click of a few buttons
Circadian Technologies Limited (ASX: CIR) www.circadian.com.au/ is an Australian biotechnology company developing innovative, biologics-based therapies for the treatment of cancer and other serious human illnesses.
Circadian owns an extensive portfolio of products and intellectual property related to Vascular Endothelial Growth Factors (VEGFs), a class of proteins that play a critical role in regulating tumour blood supply. These programs are conducted through Vegenics Pty Ltd, a wholly-owned subsidiary of Circadian.
In recent years, Circadian has doubled its expenditure on research and development (R&D) in cancer therapeutics, which is tracked through a range of projects involving organisations in Australia, the US and the United Kingdom.
Until 2010, Circadian had recorded its financial performance, and provided its half-year and full-year financial reports to the Australian Stock Exchange, using the MYOB accounting program, supplemented by a proliferating number of complex spreadsheets and a lot of manual processing. As a result, taking annual leave at Christmas time was unknown to staff in Circadian’s finance department while they regularly burnt the midnight oil to deliver half-year reports for board signoff by February.
Circadian maintained five separate databases for subsidiary companies, with no functionality to consolidate results automatically for reporting and analysis. As its R&D spend grew and the complexity of its operations increased, heavy reliance on spreadsheets and manual rekeying of data increased the risk of errors occurring.
Circadian Technologies Finance Manager and Company Secretary, Susan Madden, said the resources required for financial administration had been greater than the size of the organisation justified. “The importance for Circadian is to effectively manage its cash reserves,” she said. “We want to maximise the value of our expenditure by concentrating it on research and development rather than spending it on administration-type overheads.”
After commissioning a review of the market for financial management systems, Circadian Technologies selected Microsoft Dynamics NAV, supplied and supported by Melbourne-based EBS.
Ms. Madden said Microsoft Dynamics NAV stood out because of its flexibility and ability to capture project expenditure. “NAV enables us to manage project expenditure more effectively than what other solutions seemed to offer,” she said.
“We’re heavily involved in tracking costs because of the nature of our organisation, which is in early stage biotechnology development. We have four to five leading projects at the moment for our major drug categories, with multiple sub-projects, each at different stages of development, so cost management is very important. Keeping track of costs is much easier with NAV.
“The company itself has grown in complexity. About 60 per cent of our research and development contracts are overseas, primarily in the US and United Kingdom. Whereas we used to track unrealised and realised foreign exchange transactions in a spreadsheet, we no longer need to do that because it’s all captured by the NAV system.
“NAV now provides us with all of the ledgers on one system, allowing us to consolidate all of the companies into our reporting entity and refining our processes. Using the single NAV database, consolidated reporting is available with the click of a few buttons.
“This has probably saved us time equivalent to half of an FTE (Full Time Equivalent) position, including about cutting two days off the time required to prepare our half-yearly and yearly financial reports. We are still refining our budgeting processes, but I expect to gain simplification, standardisation and clarity of the budgeting structure for the project managers in the near term.”
EBS started the deployment in August 2010 by meeting with Circadian to map the company’s business workflows on to Microsoft Dynamics NAV. The system went live in November that year.
Ms. Madden said EBS had worked with Circadian “like a partnership”. “EBS has been very helpful, assisting us with the development and understanding of our needs for the system,” she said.
“EBS put a lot of time into the upfront understanding of what we wanted. Often, it’s very hard to understand what functionality a system can deliver when you’re in the design phase. I think EBS managed to bridge that gap between our knowledge of NAV and its knowledge of our company.”
Ms. Madden said Microsoft Dynamics NAV had dramatically reduced the amount of time required to prepare the half-year financial reports for 2010. “As a company listed on the stock exchange, we have to report half-year results and full-year results – with a strict deadline for completion,” she said.
“Because we report half-yearly results in February, I don’t think anyone had taken any time off at Christmas ever before. We actually did this year – for the first time – and still managed to meet our deadlines for reporting. The accounts were signed off at the board meeting in February and they were lodged with the ASX on time.
“This was a huge benefit.”
Another benefit of the consolidated reporting provided by Microsoft Dynamics NAV is that Circadian staff spend less time managing the logistics of the system, freeing them up to focus more on contracts and vendors.
“Since we implemented the new financial system, we have reduced the number of spreadsheets that we previously required to consolidate accounts,” said Ms. Madden.
“Now we can pull together the reports we need directly from Microsoft Dynamics NAV. As well as saving time, the consolidated reporting reduced the risk of errors occurring as well. The benefit of greater data accuracy is best defined by the fact that we manage all of the subsidiary companies in the one database and can ensure that our intercompany balances agree, whereas in the past this was all managed through using an external spreadsheet which meant that tracing errors required more manual follow-up.
“Microsoft Dynamics NAV gives us the ability to track our contracts through blanket purchase orders that we put into the system to cover the various stages of the contract. A contract might span several months with several stages of payments: That is all tracked within the system now rather than having to rely on someone’s memory.
“Also, with all our vendors on the system, we can better track our level of expenditure with major vendors, which is fairly significant in some areas. That will also help us to obtain discounts on purchase contracts going forward.”
More about Evolution Business Systems
Evolution Business Systems (EBS) specialises in business management solutions that give you the freedom to focus on your business. EBS does this by automating your core business processes and integrating your specialist business applications to deliver the right financial management solution. With deep expertise in leading financial applications including Arrow Financials and Microsoft Dynamics™ NAV, EBS works beside clients to ensure their software solves problems rather than creating more.
EBS has a detailed implementation strategy that is tailored to customers in terms of timelines, requirements, risks and responsibilities as well as project variations and external requirements. While it does not sell or support hardware or site network environments, EBS informally partners with selected specialists in these areas to provide clients with a “total solution”.’
Evolution Business Systems Pty Ltd
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