Australian Finance Group doubles its capacity to innovate

Founded in 1994, Australian Finance Group (AFG) is Australia’s largest mortgage broker service provider with access to over 40 leading lenders and 2,400 brokers nationwide. In addition to home loan products, AFG also offers commercial finance, AFG-branded securitized products, and insurance products.

The company wanted to migrate to a cloud environment to ensure high-performance and availability for business-critical systems such as financials and incentive compensation, and minimize risk.

It needed to drive innovative services, such as brokers’ marketing programs, to enhance AFG’s competitive edge in the financial services industry.

The company also wanted to automate financial processes, such as calculating broker fees and monthly commissions, to retain the firm’s reputation for prompt broker payment and enable finance staff to focus on business improvement rather than operational tasks.

The CFO and senior managers needed timely insight into business performance, such as home-loan profit margins, and support strategic planning.

Finally, the company hoped to shift IT resources away from systems management to more value-added projects and reduce costs.

AFG was using multiple on-premise Oracle applications, including financials, incentive compensation, planning, business intelligence, document management, and Siebel’s customer relationship management (CRM). With the rapid growth and a changing business environment, such as new legislation in the financial services industry, the legacy infrastructure became inefficient and costly for AFG to drive innovation and fulfill business demands, such as delivering new services to brokers. Processing critical broker commission payments and fees was also time-consuming, posing risk to the company’s reputation. Moreover, AFG wanted to move IT resources away from systems management to focus on new initiatives, and improve business insight to support management decisions.

By migrating on-premise applications to Oracle Cloud ERP, Oracle CX Sales, Oracle Planning and Budgeting, and Oracle Documents Cloud Service, AFG doubled its capacity to innovate and deliver faster new services to brokers. With automated financial processes, AFG can process 600,000 monthly commission payments 5x faster and create broker fees 6x faster. In addition, senior management gained quick access to insight into business performance and supported faster decisions. It also enhanced collaboration by rapidly sharing information with brokers and lenders.

Processes 600,000 Monthly Commission Payments 5x Faster, Enhances Competitive Edge

For the past decade, AFG had been using on-premise Oracle applications to support its critical financial processes, such as broker-commission payment, cash management, reconciliation, and month-end closing. Limited back-office automation made it cumbersome for finance staff to produce financial reports and process broker payments and fees. With 5x business growth over the last 10 years and increased regulatory requirements, AFG needed to transform its business model and technology platform to sustain its leading market position.

By integrating Oracle Financials Cloud Service and Oracle Fusion Incentive Compensation Cloud Service with on-premise Oracle’s Siebel CRM, AFG automatically collected daily mortgage-sales transactions and commissions data from lenders and calculated the required broker payments. As a result, the company can process 600,000 monthly commission payments 5x faster—in just two hours instead of 10 hours—and ensured timely broker payment. Brokers can also view real-time commission payments via the CRM system, increasing their satisfaction.

“Our reputation depends on prompt payment, which is a key differentiator for our business. Thanks to Oracle ERP Cloud and Oracle Sales Cloud, we can rapidly calculate a large volume of complex broker-incentive plans and meet payment deadlines, enhancing our competitive edge,” said Andrew McGee, IT manager, Australian Finance Group Ltd.

The automation also enabled AFG to simply assign a single employee to process both commission payments and fees instead of using two employees to manage the tasks separately. “With Oracle Cloud, we have transitioned from distributed and duplicated responsibilities to a centralized role, maximizing resources and increasing productivity,” McGee said.

Automates Financial Processes and Doubles Capacity to Innovate

Before migrating to Oracle ERP Cloud, AFG’s finance staff needed to extract data from the financial system and manually consolidate the information, such as general ledger entries, into spreadsheets and upload them back to the systems. It was a time-consuming process that made it difficult to meet ad-hoc requests from management. AFG also wanted to increase the capacity of its back-office staff, particularly senior managers, enabling them to focus on new initiatives rather than business-as-usual operations.

Oracle Financials Cloud Service supports extensive spreadsheet integration across multiple finance functions, including general ledger, payables, receivables, asset and expense management, eliminating the time finance staff spent for high-volume data entry. Oracle Financials Cloud Service also provides complete visibility into and centralized control over subledger-closing status, enabling AFG to rapidly resolve issues and process month-end closes faster. Further, it automates the labor-intensive reconciliation process by identifying discrepant sales transactions and entries. As such, AFG creates broker-fees invoices 6x faster—in half-a-day rather than taking up to three days. Finance staff can also produce quicker and more accurate intercompany and tax reports, meeting legislative requirements.

“Thanks to Oracle Cloud, we have doubled our capacity to innovate—from 24% to 48%—by enabling staff members to move away from operational tasks and focus on digital, mobile and data initiatives, such as smart marketing campaigns for brokers, and improve staff satisfaction and engagement,” McGee said.

As a result, in 2015, AFG won The Australian Broking Awards’ Technology Platform of the Year and Broker Marketing Platform of the Year titles for its effective use of technology in driving business development and client retention.

Finally, Oracle Financials Cloud Service provides an intuitive self-service reporting feature, enabling management to easily view real-time financial reports, such as profit and loss statements, via the dashboard, and exports the reports to Microsoft Excel or PowerPoint with a single click. Now, with immediate insight into business performance, the CFO and senior managers make faster decisions, such as revising home loan product margins.

Reduces System Management Costs by 29%, Increases Business Opportunities

The migration to Oracle Cloud also provides an integrated and scalable IT infrastructure to support AFG business growth. It reduced time-consuming, system-administration tasks, such as deploying patches and upgrades, increasing IT-staff productivity. Consequently, AFG no longer needed to hire contract database administrators and redeployed three resources from the IT-infrastructure team to more value-added business areas.

“Using Oracle Cloud-enabled us to avoid disruptive system-upgrade projects, such as refreshing our servers every three to four years, and cut system management costs by 29% and hardware and disaster recovery costs by 19%,” McGee said. “We gained the ability to differentiate our business through innovation and strengthen our brand, attracting more brokers, and increasing business opportunities.”

Supports Strategic Planning, Enhances Collaboration Across Broker Network

By integrating Oracle Financials Cloud Service with Oracle Planning and Budgeting Cloud Service, AFG supports strategic planning and annual budget forecasting, enabling the company to respond rapidly to changes in the financial services industry, such as revising home loan interest rates. It also uses what-if analysis to accurately assess the impact of new services on business performance, such as calculating margins for discounted fees to new brokers.

AFG also needed to regularly share invoices and receipts with its 2,400 broker members. By adopting Oracle Documents Cloud Service, it provides a centralized document-management system and enables the company to store 15,000 monthly invoices, including broker payments and fees, generated from Oracle Financials Cloud Service, and up to 300 broker contracts per month. This new environment enables AFG to rapidly share and collaborate business-critical content across the nationwide broker network.

• Doubled capacity to innovate—from 24% to 48%—and delivered new services to brokers by migrating multiple on-premise applications to Oracle Cloud and redirecting resources to focus on new initiatives rather than business-as-usual operations
• Ensured timely broker payment and enhanced competitive edge by integrating Oracle ERP Cloud and Oracle Sales Cloud with Oracle’s Siebel CRM system, enabling the company to process 600,000 monthly commissions 5x faster
• Created broker fee-invoices 6x faster and executed month-end closes quicker, thanks to Oracle Financials Cloud Service’s extensive spreadsheet integration across multiple finance functions
• Reduced system-management costs by 29% and cut hardware and disaster recovery costs by 19% by moving to Oracle Cloud and minimizing hardware and additional resource requirements
• Increased finance-staff productivity and satisfaction by using Oracle ERP Cloud to automate financial processes and eliminate labor-intensive tasks, such as data entry and verification, allowing staff to focus on business improvement
• Gained immediate insight into business performance, such as mortgage-sales profitability, through real-time executive dashboards
• Supported faster decisions by using Oracle Planning and Budgeting Cloud Service’s scenario modeling feature to accurately analyze the impact of new services on business performance
• Improved strategic-planning efficiency by integrating Oracle Financials Cloud Service with Oracle Planning and Budgeting Cloud Service and enabling the company to respond faster to a changing business environment
• Streamlined document-management process by using Oracle Documents Cloud Service to store 15,000 monthly invoices, including broker payment and fees, and up to 300 contracts per month
• Enhanced collaboration by gaining the ability to rapidly share business content, such as fees invoices, with external brokers

AFG had worked with Oracle Partner, Ufusion Pty on other business solutions and engaged the firm to provide technical support for system configuration and data migration to Oracle Cloud. Ufusion also delivered training to AFG’s IT team to improve its knowledge and skill with Oracle Cloud solutions.

“With Ufusion’s expertise in Oracle Cloud and deep understanding of our business requirements, we were confident that we could migrate to the new platform smoothly and improve operating efficiency,” McGee said.