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MITO pipes in cloud based FinOps transformation, streamlines business

Who hasn’t been there? That old piece of kit in a corner that keeps on keeping on – though everyone holds their breath when they walk past it.

In this case it was a desktop computer in a corner of the office with paper draped over it warning “Please, do not touch.” The risk was that if someone did touch it, the batch job might not run and the accounts would be out of sync.

It signalled to Shelley Ellis-Williams that it was time for an upgrade.

Ellis-Williams is a Management Accountant at Marubeni-Itochu Tubulars Oceania (MITO) – one of the largest suppliers of oil and gas steel tubulars in the region. It has a team of 50 people, across seven sites handling everything from sourcing product, to supply, logistics, storage, delivery, just-in-time and on location.

To meet demand it has around US$100 million worth of pipe on hand. Managing that stock is critically important as is stock traceability – customers want to know what pipe they have where, when and most importantly, where it came from.

MITO had relied on its on premise, heavily customised AX 2009 system. It worked still – but it was hard to update and if people wanted different sorts of reports there were all manner of contortions required.

As Ellis-Williams explains; “Our finance team is an information hub. We constantly had our ops team asking us for new information and new reports and we just didn’t have the ability to do that. It just wasn’t updated innovative information that we could get out. It was traditional reporting.

“It didn’t not work, but it was just hard to get anything new out of it. And we found that service providers that we were asking to write reports for us were finding it hard to sift through the old code and the customisations that were in there.”

The possibility to transition to a modern cloud-based platform was tantalising – not least because MITO had recently transitioned to Office 365, the operations team had moved the CRM into Dynamics 365, and the organisation was benefitting from the flexibility and functionality that the cloud-based solution delivered.

After a brief market scan it was clear that transitioning to Dynamics 365 for Finance and Operations would help transform the business, offer ease of integration with other systems already in use, make the business more responsive to employee and customer needs, streamline workflows, and remove the risk that one day that batch file simply would not run.

With resilient and responsive cloud foundations underpinning finance and operations, Ellis- Williams also understood the opportunity this would deliver in terms of being able to leverage technology to streamline cost management, HR and production. MITO is interested also in exploring how artificial intelligence and machine learning can improve demand forecasting.

Steady steps to success

MITO took things steady at the start – it wanted to get this right. Ellis-Williams explains; “We knew that we needed somebody that had the expertise and the product knowledge to be able to do what we wanted to do. What we do is easy, but we definitely had some different requirements, as far as traceability and our inventory management system.”

MITO learned that Microsoft partner Velrada had a strong track record with Dynamics 365 and the skills and experience it sought. “The only way the whole project was going to be a success is to have the right people on the job,” she adds.

“From a management point of view, they always want to know the ins and outs on why we’re spending so much money and what improvements is it going to make? Being able to show management the improvements that we could do, and the ease of being able to use the workflows and how much time it was going to free up and be able to show useful information was really important.”

In December 2017 the deal was signed and Velrada got to work

Brad Gaudoin Delivery Director for Velrada notes that: “From our side, a significant level of internal ownership, particularly on the finance side is a highly critical success factor.” That Ellis-Williams was committed to the project and had the backing of senior executives was a big plus.

To scope the program of work Velrada ran a series of workshops to understand MITO’s processes and requirements, and the opportunity for improvements along the way. Ellis-Williams says; “Velrada challenged us in the way we do things and why we do things, and I guess the other main aim of that was to reduce the amount of customisations we had in the system.”

After a hiatus to let the department concentrate on year end financials the deployment got underway and took several months to go live.

Workflow and workplace reform

Moving to the cloud and making use of Lifecycle Services for Dynamics 365 has streamlined the management of the system and reduced the burden on MITO’s IT team.

Meanwhile, for the 35 users of Dynamics 365 FinOps, it’s transformed the way they operate. There is end to end transparency about the US$100 million of tubing supplies across the business as it moves through the yards, into the warehouse, out to MITO’s specialist tubular threading facility and beyond. And, because the system is cloud based – that transparency can be achieved from any device when and where it’s needed, which is important for teams out on the road with customers and prospects.

“We’ve always got people traveling, whether they’re traveling overseas to inspect pipe or to observe loading or unloading onto a ship or a truck or wherever. And obviously, we’ve got management traveling, we’ve got operations, all the sales team constantly traveling, so from that point of view, it was a massive improvement for us,” Ellis-Williams says.

For customers, the ability to track real-time inventory movements and on hand balances, means MITO employees can provide much greater insight to customers about what stock is on hand and when they can expect an order to be delivered, enhancing the customer experience.

“Prior to Dynamics 365, we were doing a lot of things twice. And we had a lot of complaints from our operations team, because they were putting things into CRM, and then having to put them into AX as well,” says Ellis-Williams.

“Now, it’s a matter of doing things once and integrating that information,” with data from Dynamics 365 being fed into Azure Blob Storage, where it can be accessed by the CRM in Dynamics 365 and Tubestream TM .

MITO teams are also empowered to use Dynamics 365 and prepare their own purchase orders and approve invoices.

Ellis-Williams says; “Our managing director can approve a purchase order; it doesn’t matter where he is in the world, he can do that with his mobile phone.

“That was a big thing for us, because we could need a purchase order within hours to be sent to a mill to be in line for production. And with our MD traveling all the time, we couldn’t wait for him to be able to access the system to approve or be able to open an Excel spreadsheet or a PDF to put a signature on it to approve a purchase order. So that whole process has improved dramatically.”

Streamlining the way invoices are handled has reduced turnover time, positively impacted cashflow and provided visibility of real time inventory movements and on hand balances.

The digital transformation also meant that MITO was able to continue to grow the business without having to increase headcount.

From her vantage point in the finance department, Ellis-Williams says MITO now has significantly improved its reporting capability and is able to pull into the system external documents such as bank statements – a task which was previously tackled manually.

“It’s more innovative, and we’ve been able to move away from traditional reporting. They don’t want to see loads of data, they want to see graphs and pictures and progress,” which is being delivered through Power BI and its in-built visualisation capabilities.

“The biggest surprise for us was the ease of moving to a cloud-based system and knowing the biggest tech company in the world is looking after our data.” Ellis-Williams acknowledged also the role Velrada’s expertise, delivery discipline and training played to help with change management.