Scottish & Newcastle Retail has launched into a major systemsrites John Stokdyk. overhaul, which will take changes in the licensing laws, rather than the year 2000, as its driving factor.
The brewer’s Northampton-based pub wing is in the middle of a phased, 18-month implementation programme to replace its bespoke IBM mainframe-based financial systems with financials and human resource software from US supplier PeopleSoft.
Under the 1989 Beer Orders, breweries are limited to the number of pubs they can own. S&N Retail’s tied estate is limited to 2,500 pubs, so when it acquired 310 houses from the Grand Pub Company in April, it had to sell an equal number of pubs to comply with the law.
One hundred pubs were sold to different suppliers, and a further 200 tied pubs were freed from their tenancy.
The new PeopleSoft system, running on a Unix-driven Sun Ultrasparc 4000 server, will help the company handle similar transactions in the future, explained financial systems manager Ian Teague.
PeopleSoft Financials is currently used at the Northampton finance department, and is connected to a remote server at S&N Enterprises in Edinburgh by Citrix Winframe software. According to Teague, PeopleSoft was chosen over SAP and Lawson as it had the best functional fit for the company – something confirmed after consultation with the staff who now use it.
‘From a system point of view,’ Teague added, ‘the PeopleSoft toolkit was far superior.’ The reporting tools allow S&N to customise their own monthly profit & loss forms and workflow controls are used within the finance department to clear journals.
The changeover also provided S&N Retail with the opportunity to restructure its chart of accounts. ‘We were able to make them more specific to a retail business rather than the group as a whole,’ Teague explained.
The new system inevitably had teething problems, for example, in how accounts receivable and billing modules handled VAT. But once these glitches were ironed out, with help from PeopleSoft’s services group, the company began to see the benefits.
‘Immediately we put in the accounts receivable and billing, debt recovery was speeded up, mainly through producing dunning letters automatically.
We were quite surprised by the debt we had outstanding.’
Management accounting has also benefited. When it sells a pub, S&N is still required to provide statutory accounts, even though it no longer runs the pub. The PeopleSoft Envision module has been programmed to generate spreadsheet files that can be converted into p&l accounts for 3,000 houses.
The run is carried out overnight, twice a period. ‘That gives us much more visibility of what’s happening in the pubs,’ said Teague.
Teague and his team are currently introducing a budgeting module and plan to upgrade to version 7.5 by the end of the year, which will allow S&N to cope with euro transactions.
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