EFCO MALAYSIA’S ACCOUNTS CLOSING SPEEDS UP BY 33 PER CENT WITH MICROSOFT BUSINESS SOLUTIONS

SITUATION
Since it establishment in 1996, EFCO (Malaysia) Sdn Bhd has contributed to the construction of about 70,000 units of houses and apartments in Malaysia. The company supplies the steel formwork systems which act as mould for concrete casting and also temporary support to building structures during the construction process. Its formwork systems have also been used in the construction of commercial buildings, water treatment plants, manufacturing plants, bridges and Light Rail Transit (LRT) tunnels.
The company is a part of US-based EFCO which runs the world's largest steel form manufacturing plant and has a strategically located form distribution network in 11 countries around the world. Its corporate headquarters is in Des Moines, Iowa.

Up till a couple of years ago, EFCO Malaysia had been using a DOS-based accounting software. The same system was also used by the EFCO HQ and all the subsidiaries. However, the solution was obviously way past its shelf life and was proving a liability to the group.
“It was not flexible and difficult to integrate and customize,” said Lim Heng Seong, EFCO’s Regional Finance Manager – Asia & Europe. Because it could not interface with Windows-based solutions, EFCO was essentially trapped in a silo-based environment.
“The saddest thing was that business and financial information available in the DOS-based accounting software. was not integrated and could not be accessed by other applications,” he said. And this resulted its finance team having to often operate manually to prepare various reports and analyses. For example, information on collections or commissions had to be printed out and then re-keyed into Microsoft Excel.

“Not only was this highly inefficient and unproductive, it also exposed us to the possibility of errors,” Lim explains. The resulting delay in closing accounts and preparing management reports had a knock on effect as the situation in Malaysia was also mirrored in other EFCO subsidiaries around the world. This meant that EFCO’s HQ did not have timely information about the financial state of its businesses worldwide.

Because the old accounting system was not web-based, EFCO senior managers could not access the financial systems of its subsidiaries from anywhere and anytime to get real-time information on the business situation, Lim adds. And this was a particular problem for EFCO Malaysia which served as the Asian region’s shared services centre for finance functions. This meant that much of the financial information from regional subsidiaries had to re-keyed in by EFCO Malaysia’s finance team for backend processing.

SOLUTION
After a thorough evaluation of various options to replace DOS-based accounting software, the EFCO headquarters chose Microsoft Business Solutions Great Plains running on Windows 2000 Server. Since July 2003, EFCO currently uses the Accounts Receivables, Accounts Payable, Collection Management, Purchase Order Processing, General Ledger and Human Resources modules.
According to Lim, Great Plains was the perfect fit for EFCO as it was a powerful, flexible and feature-rich web-based business solution from Microsoft. “Because EFCO is a medium-sized company, it is not necessary or cost effective for us to invest in expensive, high end systems like SAP. Great Plains suits our operations – it has all the features and functionalities that we need, and more,” he adds.

Another plus for Microsoft Great Plains was that it could be deployed as a web-based solution leveraging on the Microsoft Terminal Services feature available in Windows 2000 Server, says Lim.
This flexibility enabled EFCO to install Microsoft Great Plains only at its corporate office in Des Moines and all its subsidiaries access the system via a Citrix server through Virtual Private Network (VPN) connections. “When we access the Great Plains server, it is like we are viewing it from a PC in our US headquarters,” remarks Lim.
Lim says the value and effectiveness of Microsoft Great Plains was enhanced as it was easily customizable. In the case of EFCO Malaysia, Microsoft Certified Business Solutions Partner, Dynamic Business Solutions, was engaged to develop a collection workload reporting functionality and other new add-ons.

BENEFITS

Transforming Business Processes
Microsoft Great Plains has dramatically improved efficiency and productivity at EFCO by automating various internal work processes. And this has cut the time needed for the monthly closing of accounts for EFCO’s Asian subsidiaries by about 33 per cent, according to Lim.
“Microsoft Great Plains has enabled us to close our accounts in four days from six previously. That’s a very big improvement. When we close the accounts faster, our US HQ can also speed up the consolidation process,” he says. Having faster access to crucial business information allows EFCO to make more timely and accurate decisions to keep ahead of the competition.
Printing payment reminder letters to customers can now be done virtually with just a few clicks of the mouse with Microsoft Great Plains. The old accounting system had no such functionality, and Lim’s staff took more than half a day to individually type out over 200 reminder letters each month.
“With Microsoft Great Plains, we just need to specify the range, filter it and then print out. It is very fast – we can finish the task in just half an hour.”
Similarly, applying changes to terms in business documents such as invoices is now a cinch. “Previously, any changes would need to be done for every individual invoice issued. With Microsoft Great Plains, we just key in the change once and apply it to all the invoices,” he adds.

Unlike the DOS-based accounting software , Microsoft Great Plains easily integrates with a wide range of third party software. For example, EFCO’s HQ in the US now uses F9, a report writer application, to pull information from Microsoft Great Plains to prepare a variety of reports such as Balanced Scorecards. Indirectly, this has cut by 15 per cent the number of such reports EFCO Malaysia needed to prepare each month.

Previously, EFCO staff had to re-key in data into a spreadsheet to prepare reports on Balanced Scorecards as the old accounting system could not integrate with applications such as F9. “The irony of the situation was that such information was available in the previous accounting system but we didn’t have a program to access and process the data,” Lim laments.
Another convenience of the system is that EFCO Malaysia no longer needs to back up its accounting system. “Since the back up is now done at our HQ in the US. We used to spend 15 minutes each day backing up the files under the old accounting system,” he says.

Maximizing Business Value
The inherent flexibility of Microsoft Great Plains allows its value to be magnified through innovative customization by Microsoft business partners. In the case of Dynamic Business Solutions, it developed a collection workload report add-on which is now used by EFCO subsidiaries worldwide.

This feature allows the EFCO management to monitor the progress of collections on a weekly basis, and hence improve cash flow management. “Because all the relevant information is extracted directly from the account receivables database, we can print out the collections report at the click of a mouse,” explains Lim.

“In the past, we couldn’t import the information from the old accounting system to any spreadsheet or work program. So it had to be keyed into Microsoft Excel. It was very cumbersome and took about a day to complete the collection workload report,” he adds.

Though the collection workload report add-on was initially developed for EFCO Malaysia, it was quickly recognized as a highly useful tool by the EFCO HQ and rolled out to other subsidiaries around the world.

Dynamic Business Solutions is currently helping EFCO Malaysia to develop a commission add-on which will automatically calculate commissions for sales personnel.

“Our staff currently takes about two days to calculate the commissions for the salesmen. With the new functionality, the process will be automated and the commissions report can be printed at the touch of a button,” explains Lim.

He confirms that the efficiency and productivity gains spawned by the Microsoft Great Plains solution allows EFCO’s Finance team to concentrate on doing more value added tasks.

“We have cut down the back office transactional processing tasks. This allows us to focus on our core competencies to support the business operations,” Lim says.

Cross Border Collaboration
The deployment of Microsoft Great Plains has regional gains as EFCO Malaysia is the regional shared services centre for finance functions, providing accounting services to the Philippines and Taiwan subsidiaries.
The new solution has cut down on various manual processes and because Microsoft Great Plains is web-based, the EFCO subsidiaries have online access to financial information and reports.
EFCO Malaysia is also able to provide a helping hand to other subsidiaries outside of the Asian region. For example, it has provided accounting services to EFCO’s United Kingdom subsidiary during a period when they were short-handed.
“When EFCO’s senior financial administrator in the UK was on medical leave, we were able to support them by closing the UK accounts. With the old accounting system, we would not have been able to do it because it is not web-based,” Lim remarks.

Savings in Software Licensing Costs
By setting up its Microsoft Great Plains solution on a web-based platform, EFCO has been able to enjoy substantial savings in its software licensing costs. This meant that EFCO only needed to deploy the solution at its corporate office in US instead of 11 locations worldwide like what was done with the DOS-based accounting software.
EFCO needed to purchase only about 25 international client access licenses (CAL) to cater for its worldwide operations. And because of international time differences, these licenses can be shared by staff working in different parts of the world.
“This is so much more cost effective rather than buying and deploying the software locally in each the countries. Just one site is able to support the other 10 subsidiaries,” Lim explains.
Lim acknowledges that the Microsoft infrastructure platform it makes it possible for EFCO to operate in such a productive, efficient and cost-effective manner. “This is a key reason why the EFCO corporate office purchased the Microsoft Great Plains solution,” he adds.

About Microsoft® Business Solutions—Great Plains®
Microsoft Business Solutions—Great Plains (formerly Dynamics™ and eEnterprise™) is optimized for mid-market and corporate businesses. An enterprise-wide, integrated solution, Microsoft Great Plains provides functionality for financials, distribution, human resources and payroll, customer relationship management, project accounting, manufacturing and supply chain management. Microsoft Great Plains is available on Microsoft SQL Server™ database.