The Client
This Isosceles client is a digital services company. They have received significant scale-up investment over the last few years and have grown to a £50m+ company with over 200 employees.
The Financial Modelling Requirement
A transformation project within this client created the need for system migration. This migration had a high financial impact and affected a significant percentage of their client base. They needed financial modelling to help them understand the underlying costs and risks and how to navigate the most effective route.
Having initially turned to a ‘Big 4’ firm to undertake this financial modelling work, they found the resulting models were too complex for their team to use and lacked flexibility. They decided to source a different level of support to build a new financial model with the following attributes:
- The model should be straightforward, easy to use and intuitive
- Their staff should be able to easily update this without needing to understand complex Excel formula
- The financial model should allow for scenario analysis to assess ‘what-if’ situations
- Their team should be able to verify the outputs and remove the guesswork
Additionally, they needed access to hands-on support if they needed it.
Why Isosceles?
Isosceles has supported this company for many years with various projects: talent acquisition, accountancy support, payroll, HR services and FD support. So, a high level of trust existed between the two companies.
Isosceles had FP&A resources familiar with this type of financial modelling. FP&A experts could provide more hands-on service than a ‘Big 4’ consultancy at a reduced cost.
The Solution
Step 1: The first step was to review the existing Excel models with the client stakeholders (the Finance Director and project managers) to check for gaps and identify areas that could be simplified. This revealed that some material costs were missing from the existing model within the assumptions.
Step 2: Isosceles’ FP&A expert then recreated the cost model using the project’s original brief and the existing cost model in three phases:
- They discussed the required outputs with the stakeholders and agreed on a layout that best suited their needs.
- From this discussion, they then determined the best format for the source data, assumptions and inputs.
- Finally, they built and tested the model to ensure it worked correctly.
Step 3: When completed, the model was reviewed with the stakeholders to ensure every input and assumption was correct and included in the workings. A series of checks were also included throughout the model, referring to the known outputs.
Step 4: Various scenarios were then worked through to ensure the outputs aligned with expectations. The financial model was built as a priority with a tight deadline so scenario testing could begin and the project would progress.
Step 5: Once the model was finalised, the expert became part of the project team and supported the decision-making discussions for the project.
The project spanned two months.
The result
The migration was completed on time and for significantly less than the original estimate.
The Isosceles team received praise for the immediacy of their impact and for communicating the model in straightforward and understandable terms. “Everyone needs a Dominic”, commented the client’s Finance Director.
This is an ongoing and evolving relationship. Isosceles is now this client’s partner for all financial modelling services. Experts are available as and when required to help with existing models and develop new models.
Isosceles has been involved in two further projects :
- The team improved cost analysis and internal reporting by replacing a manual expense review tool with an automated PowerBI model.
- They developed a budget template for departmental heads to use, which is then consolidated to provide a company budget.