SPIRIT GROUP CASE STUDY

Knowing the company 

Under well-known brands such as Chef & Brewer, Flaming Grill and Fayre & Square, Spirit Pub Company’s 803 managed pubs and 549 leased pubs are some of Britain’s most profitable. This is in large part due to an unwavering focus on being ‘the UK’s best pub company’, which drives Spirit to continuously reshape itself in response to changes in market conditions and consumer expectations.

In its most recent reincarnation, in August 2011 Spirit demerged from parent company Punch Taverns.

Defining the strategy

This move threw up some tough challenges for the newly independent organisation, whose existing systems were designed to support only its managed pubs, not its leased. As part of the demerger agreement, Punch continued operating Spirit’s leased pubs for six months. However, by the end of this grace period, Spirit needed the ability to manage the two core income streams of its leased division – rent from its lessee partners, and wet sales – itself.

This demanded the ability to:

  • capture orders quickly
  • communicate seamlessly with its distributor
  • automate invoicing
  • tightly control its stock, prices, promotions and credit.

Given the intense time pressures, Spirit determined that its best course would be to install a proven IT solution designed specifically for the leased pub sector that would support its operation straight out of the box.

Choosing the solution

After reviewing the market, Spirit opted for the solution for Leased Pub Companies; based on Microsoft Dynamics NAV, this ERP and advanced back-office system has been tightly tailored to the needs of leased pub estates by the team at Ocean Dynamics.

Paul McCarney, Spirit’s Head of Projects & Services, said, ‘it was the obvious choice. Based on an extensively proven product with open technology and a strong roadmap, the solution also incorporates industry-best processes. This gave us the structure and control we needed to be competitive from day one.’

‘The calibre of the consultants was also a significant factor in our decision: their evident sector expertise meant they immediately understood what we needed to achieve, and their can-do attitude really helped us to hit the ground running.’

The solution was easy to integrate with both Spirit’s and its distributor’s order capture systems. This created a robust business platform for the pub company that not only facilitates swift order fulfilment, but enables tight coordination of sales and inventory – which, in turn, helps Spirit manage cash-flow effectively.

Spirit is impressed with the solution’s pricing and promotions controls, too. Mr McCarney said, ‘we can now respond to changes in wholesale pricing or tax regimes really swiftly and consistently, which is critical for protecting our margins. We can also support both broad and targeted promotions easily from head office, and – importantly – manage and analyse them closely, which helps safeguard our profits as well as our reputation with partners and customers.’

The division’s rental income is equally well controlled through the solution. The system’s strong credit control and debt collection functions pool data about each partner’s rent history, interest and other contractual agreements on an intuitive dashboard. This, along with advanced reporting and analytical tools, gives Spirit the insight and power needed to minimise overheads and optimise cash flow.

Achieving return on investment

Mr McCarney said, ‘given the scale of this project, and our catalogue of requirements, it was fantastic how quickly the team at Ocean Dynamics got us up and running. In the early days after go live of a major ERP project, most companies are fire‑fighting or at least ironing out bumps. But, by underpinning our operation with a robust and fully-integrated platform that incorporates sectorbest processes and dynamic workflows, we only needed minimal customisation. This removed a lot of the usual headaches, and we’ve been humming along nicely since the outset.’

‘This has given us the confidence to set and drive towards some very challenging sale and profit targets already.’