Case Study: Targeted PetCare

Facing needs in both sales and finance, TPC found a single solution for consolidation, reporting, analytics and data accessibility.

Organization Information

• Multinational company formed through the merger of five middle-market pet care brands. 
• TPC is a PE-backed company with complex reporting requirements from its lenders.
• International operations in the United States and Canada. 
• TPC has many diverse sales channels and customers, transacting in multiple 

Problems Identified:

• All five operating companies were running on different ERP systems, making it slow and laborious to get a consolidated view of the business.
• The sales team had difficulty accessing the data required for analytics, and lacked tools for efficient analysis of metrics such as customer and item profitability.
• An ERP change was an option, but it would have been slow, expensive and would require a significant time investment from each op-co.

Solutions Implemented:

• Implemented Catalyst by EBM Software, sparing the company from an ERP change and providing a consolidated view of all the businesses. 
• Catalyst created new efficiencies by eliminating time spent waiting for and fielding data requests, saving hundreds of cumulative manhours. 
• Utilized Catalyst’s Financial and Profitability cubes to make critical information more accessible. 

Benefits Realized:

• 5 COMPANIES in 1 consolidated view 
• 80% REDUCTION in time spent on month-end close tasks 
• 3-5X FASTER than an ERP implementation 
• 360° SOLUTION for financial and sales analysis 
• TTM ANALYSIS for lender reporting 
• 1 SOURCE of truth for data 

Growing Pains

Over the course of a year, Targeted PetCare went from an idea to a multinational portfolio company. The fledgling PE owned company was assembled through rapid acquisitions of five petcare businesses: U.S.-based Targeted Pet Treats, Wheat Scoop and BVP Environmental, along with Canadian companies Pestell Pet and VersaPet. Naturally, with such rapid growth came some growing pains. With five different operating companies under the new umbrella, they now had five distinctly different business structures running on five different ERPs. This led to a two-headed problem, as both finance and sales had to jump through an endless number of hoops to get the data they needed. Department leaders from both sides began searching for a solution. “Basically, there was no way for a single person to get access to all five operating companies at the same time to analyze the data. Consolidation was a nightmare and on top of it, we had foreign exchange between the U.S. businesses and Canadian businesses,” says CFO Deepak Chichili. For the sales team, even getting access to the data was a burdensome process.

“Nobody could just go pull the data that they needed. They had to reach out to the individual op-co and either request access to their native system or ask them a lot of questions,” says Director of Sales Donna Schmidt. “You couldn’t go just and look for yourself. It was dependent on the individual to be extremely resourceful.”

The team began evaluating their options. Option one was to implement an ERP change – a costly and time-consuming option most companies would prefer to avoid at all costs. The other option was to find a tool that could sit on top of the 5 ERPs and do the consolidation, and then bring in additional tools to provide sales analytics such as SKU-level and customer-level insights.

“We hadn’t ruled out an ERP implementation and were pretty far along looking at other solutions and then Catalyst came through at the last minute. It is a place where one can get a full picture of Targeted PetCare. One source of truth,” says CFO Deepak Chichili. “It has all the trial balance data. It allows us to create a uniform P&L across all the operating companies, but also leave them in their native structure, so each op-co can run the business the way they want to.”

“The second part that really sold me,” Chichili continued, “Is that it’s financial, but Catalyst also has cubes like profitability cubes, which allow you to drill down to the customers and the SKUs. That can be very useful for the commercial team and operations.” 

Instant Impact

The EBM Software team began working with Targeted PetCare on an implementation of the Catalyst FP&A software suite. While typical Catalyst implementations run 8-12 weeks, the EBM team worked with TPC to scope a more conservative 3-6 month phased rollout plan, to accommodate some unique challenges on the client side. 

“I was extremely skeptical of that timeframe,” says Vice President of FP&A Eric Zamora. “I’ve, frankly, never seen a system get up and running that fast. If you were to take any of my experiences before, I’d say 6 months was extremely fast, and they actually slowed it way down for us. But I got more comfortable with it as time went on and I saw the questions they were asking and how they were onboarding the companies and the financial statements. I told Deepak, I’ll be surprised if they hit the 6 months, and I’m eating my words. So, I’m very impressed from that standpoint.”

With the system in place, TPC joined the experts from the EBM Software team for a 3-day training session to learn their new tool from top to bottom.

“The first thing that really struck me, and really got us off to a good start, is that I could tell Catalyst was built by finance people,” says Zamora. “The team figured out all the good things that finance people require, whether it’s FP&A or accounting, and then figured out how to build it into a tech stack. Whereas, when we talk about some of the other systems I’ve used, I’m not sure finance was their forte. They were these big companies that built big databases, and finance was one of those things they just kind of, for lack of a better term, tacked on. It wasn’t their reason for being.”

The team took the knowledge acquired at the training and ran with it, using the tool to gain new efficiencies in everything from month-end close to ad-hoc requests.

“What we have done for month-end reporting – it used to take days to create those reports, and now it’s probably less than an hour. All the reports come in like rate/volume/mix analysis, what’s the budget, the prior year, top line, bottom line, etc.,” says CFO Deepak Chichili. “Whatever you need, Catalyst makes it easier to get the KPIs. Once you set it up, it’s extremely easy to do on an ongoing basis.”

Finding More Value

Over on the sales side, Director of Sales Donna Schmidt had been leading a search for a sales analytics solution. After attending the Catalyst training session, however, she realized the software’s applications could reach beyond the finance department in what she describes as an ‘aha’ moment.

“We were working with another third party trying to solve for similar things,” says Schmidt. “And then once I got exposed to Catalyst, it was like, ‘Wow, we don’t need to be working with this other vendor, they’re just answering one piece of the puzzle, whereas Catalyst is giving us a 360-degree solution. They’re giving us the financial reporting, but they’re also giving us all the sales analytics we could possibly need.’” 

The Catalyst platform provided immediate efficiency gains for the sales team on multiple fronts. Not only did it provide the visibility they were looking for with each operating company, but it also opened up new possibilities for the team on how to see the data.

“We were so used to looking at the data op-co by op-co, but now with Catalyst, we can be looking at it customer-by-customer. If I’m trying to figure out why a customer is down, now I can quickly compare current year vs. prior year without having to reach out to people and request information,” Schmidt said. “Catalyst also makes it really easy to cut the data by channel, which would have been very difficult in the old world. Prior to Catalyst, it would have been really manual and not nearly as accurate.”

But the benefits weren’t just limited to sales and finance. Teams from the individual operating companies were now becoming curious about how they could access Catalyst and get the analytics they needed for their roles. Since Catalyst offers an unlimited number of users under a single license and role-based security, it could fill an additional role as a single source of truth to democratize data across the organization.

“I was talking to a GM from one of our operating companies today who wanted to see some Catalyst reporting features he had heard about,” says Vice President of FP&A Eric Zamora. “They have limited time and don’t want to spend hours looking at spreadsheets. They just want to find the numbers they need quickly. There are reports that are catered to them. It’s clean and easy. They’re not clicking a million buttons to get what they want. With Catalyst, it becomes, literally, one push of a button.” 

While Zamora sees tremendous time savings on his individual FP&A tasks, he says the true benefit is the cumulative effect of making the data anyone needs accessible at any time.

“The huge benefit and savings here is that every time someone asks me for something – whether it’s a month-end close number or it’s the profitability of an item – it’s the cumulative amount of time I’ve saved once we implemented Catalyst that’s really the benefit,” Zamora says. “Instead of someone taking 10 minutes to write me an email, then I take 10 minutes to hunt down the data and then 10 more minutes to explain it to them – you condense that 30-minute exercise to maybe 5 minutes total. This happens over and over across multiple projects and multiple teams, and it’s a snowball effect. Over time you’re getting hundreds and thousands of manhours back.”

External Audiences

While improving the FP&A and sales tools was a matter of extreme importance, as a PE-owned business, Targeted PetCare also had important external audiences to consider: the PE firm and the lenders.

In this case, TPC’s lenders wanted to see the trailing 12 months on a quarterly basis. Prior to the implementation of Catalyst, this was a particularly difficult ask, requiring heavy manual labor in Excel and two to three weeks of time investment every quarter.

“We have a lot of lenders and debt covenant requirements for a PE-backed company. We have to report to them every quarter, which is usually a time-consuming process, if you have one operating company. With five operating companies and five ERP systems, that’s where Catalyst is essential,” says Chichili. “The lenders want the TTM, and most systems won’t do that. They’ll give you last year, or this year, but not the trailing 12-months. With Catalyst, you can do that.”

When reflecting on the decision to move forward with Catalyst, instead of opting to go right to an ERP change, CFO Deepak Chichili is confident TPC made the right call.

“The challenge for the PE firm is investing this heavy capital and 10-18 months to roll out a new ERP, and there are a lot of challenges along the way. Catalyst is less investment, less capital expenditure, and the operating companies can concentrate more on driving the top-line, rather than spending all the energy and bandwidth rolling out complicated ERP systems. In the end, they still get exactly what they’re looking for, but with less tax on the organizational bandwidth, compared to an ERP rollout.”