The ChallengeStanding up operations in four months
Algenist was part of the biotechnology firm TerraVia until August 2016, when Tengram Capital acquired a majority stake in the business and made Algenist a standalone brand.
Algenist needed to set up its own finance and accounting function and enterprise resource planning (ERP) platform—services previously provided by the parent company. Algenist wanted the ERP platform to:
- Rationalize and automate business processes to support current operations while also enabling the business to double in size
- Improve visibility into operating cost, sales, and other data—allowing the company to improve profitability
- Reduce the hours required to perform and the potential for error associated with standard business operations and financial processes
Under the terms of the transition services agreement (TSA), Algenist had less than six months to implement new systems. In addition, the management team wanted to start its new fiscal year with the new ERP system in place for reporting purposes.
West Monroe Partners provided valuable carve-out expertise, including experience implementing proper technology infrastructure and back-office systems, that enabled Algenist to address both the business and technology aspects of its carve out. This would enable Algenist to accelerate the implementation timeline and meet the terms of its TSA.
The SolutionSupport from selection to standalone operations
West Monroe Partners conducted a fit gap analysis software selection process based on Algenist’s needs and business model, comparing multiple solutions and employing knowledge of ERP systems from previous carve-out projects to make an informed and economical recommendation.
To support Algenist’s objectives of enhancing insight into financial and operational data and improving efficiency, the project team designed new systems and processes based on business requirements and recommended other improvements to existing processes.
West Monroe Partners then led the core ERP implementation and integrated it with eight systems to enable operations on the new platform at the start of Algenist’s fiscal year. West Monroe also managed deployment of new ancillary business applications (SPS EDI, AvidXchange Invoice Management, AvidXchange Vendor Payments, and Expensify). These steps were critical to independent business operations, as EDI transactions account for 80 percent of revenue transactions, and AvidXchange processes all vendor payments.
Finally, West Monroe created more than 80 customized reports to support operations and provide new business analytics. This allows Algenist to access and analyze its operational and financial data without the need for IT developers.
The ImpactLower costs, greater efficiency, faster reporting
With West Monroe Partners’ support in selecting and implementing new integrated back-office systems, Algenist saved $375,000 in costs. Moreover, West Monroe helped negotiate an ERP license discount that, in combination with the cloud-based solution that reduces the need for IT staff, lowers ongoing ERP operating costs by 65 percent. The project produced additional benefits:
- Creates new and independent supply chain, order management, and finance and accounting functions
- Transforms business processes, enabling Algenist to target a reduction in the month-end closing process from 15 days to 5 days
- Enables functions to create customized reports
- Provides flexibility to adapt to future changes in the company’s business model and its planned growth