In addition to managing pumping stations, waterways, and water treatment plants, dike maintenance and reinforcement—due to rising sea levels—are therefore important tasks for this equally young water board —which emerged from a merger finalized in 2000 between the Noordoostpolder Water Board and the Fleverwaard Water Board, both established in 1986. “A water board has a governing body just like the mayor and aldermen of a municipality,” explains Arjan Kraster, who leads the water board’s 14-member Finance team. “In a water board, the mayor is called a dike reeve, and the aldermen are called water commissioners. Our general board, in turn, is comparable to a municipal council, with elections held every four years, concurrently with those for the Provincial Council.”

“By then, we knew what we wanted to do with FP&A, and 4CEE guided us through the process of configuring and building the application. Thanks to their financial expertise, it turned out exceptionally well.”

Supporting policy proposals

For the water board’s Finance team, providing financial advice to the board and management is the focus of their work. To carry out this role even more effectively, the team began exploring the possibilities of FP&A in mid-2023. “We started by brushing up on our basic knowledge of this software and began thinking about how we wanted to work with it,” Kraster explains. “Once we had some ideas, we worked them out in detail with UNIT4.”

Gradually, Kraster and his team realized that for further implementation, they needed consultants who, in addition to knowledge of the software, also had experience with financial processes within organizations. After a brief search, Kraster found 4CEE, one of UNIT4’s resellers in the Netherlands. “By then, we knew what we wanted to do with FP&A, and 4CEE guided us through configuring and building the application. Thanks to their financial expertise, it turned out exceptionally well.”

The FP&A application is like a construction set

Kraster explains that the FP&A application can be compared to a building set and that 4CEE implemented the functional blueprint—consisting of requirements and objectives—previously developed by the water board, both technically and in terms of content. “We sketched the house, after which 4CEE first acted as the architect who said: ‘We still need a support beam here, and we have to use these specific bricks,’ and then acted as the construction company that actually built the house,” he says, clarifying the comparison with the building set. “The FP&A application as it is currently in use supports our team in planning all the investments the water board intends to make over the coming decades.”

Mapping out long-term investments

Kraster emphasizes that this is only the beginning of the calculations for long-term investments, because the water authority also wants to know the expected costs—ranging from, for example, the construction of a wastewater treatment plant to the renovation and maintenance costs throughout its lifespan. “Using the application, we calculate the capital costs of all plans for, say, the next thirty years,” he says. “And of course, this involves enormous sums of money, which we as a water authority must be able to account for properly because we work with taxpayers’ money.”

He explains that the costs of, for example, a renovation 25 years from now of the water treatment plant yet to be built are initially quite imprecise, but that as “the hour of truth” approaches, the investment figures become increasingly accurate, down to the last detail. “In practice, this means that we update our investments that are far in the future once every few years, and those within a timeframe of three to five years about twice a year. After that, we fine-tune the details and know exactly where we stand.”

Collaboration tool for better process management

According to Kraster, that level of precision wasn’t possible before the water board started using the FP&A application. He explains that before that, all this work was still done using spreadsheets—a world of difference, in his view. “We’re an organization with 400 people. Now we can grant departments—each responsible for a part of our operations—access to the FP&A application, so they can provide input over a period of time on pre-assigned areas. Those contributions ensure that we stay informed about new technologies and other current developments, which we can then incorporate into our reports.

The application is therefore also a collaboration tool that enables us to manage our processes more effectively. That’s not possible with a spreadsheet, because we sometimes had eight people working on it simultaneously, with everyone able to view and edit everything. With FP&A, we’ve organized things much more clearly by assigning permissions and roles.”

Those reports are also much faster to prepare and easier to define, he explains. “By applying filtering techniques, we can generate any report we want—from a report on all investment projections for the next thirty years to a report covering the next three years. In addition, we can drill down—for example: what are the total expected investments for a specific department in the coming year, or, more specifically, the investments in pumping station X over the next five years?”

“That’s where the application’s flexibility comes into play again—as mentioned, it was developed as a modular system. Together with 4CEE, we then select a new element and add to it.”

More flexibility, less prone to errors

Another advantage he cites is that the FP&A application is much less prone to errors, because it is fully controllable and can be configured as desired. “In yet another way that minimizes the risk of errors, it’s possible to create various scenario analyses for an investment, incorporating a number of changes,” says Kraster. “We then present our findings to the board so they can make an informed decision about the investments.” He adds that if a particular aspect cannot yet be calculated within the FP&A application, it is relatively easy to add this missing functionality to the software. “That’s where the application’s flexibility comes into play again—as mentioned, it was developed as a modular system. We then work with 4CEE to select a new element and integrate it.”

Labor cost application as a forecasting tool

A second capability of the “building block” FP&A system that the Zuiderzeeland Water Authority has now implemented is an application for labor cost management. The reason for implementing this part of the application is that the water board’s management wants greater control and oversight over total personnel expenses—including both internal employees and hired external specialists—data that, according to Kraster, standard HR and financial systems are not equipped to handle.

He explains that this information on labor costs is essential for government agencies such as the water board. “As part of the government, we work with pre-determined budgets for labor costs. Changes are constantly occurring within our departments—not only the hiring and departure of employees but also modifications to existing contracts. With this application, we can now track and manage these developments much more effectively.” The payroll application also records all contracts for internal employees and external specialists, including the contract duration, the number of hours per week, and the salary or hourly rate. This makes it possible to use the application to forecast payroll costs for the current year as well as for future years, says Kraster. “The payroll costs application serves two purposes for us: on the one hand, it gives us insight into our payroll costs for the current month, and on the other hand, it helps us forecast the future.”

Insight, overview, and control

Both the FP&A applications for long-term investments and the labor cost application provide Kraster and his team with insight and an overview to manage and gain control over the cost components within the dynamic world of the water board. “As you automate more, you also start doing more with the data,” he explains, highlighting the benefits of using the two applications. “We’ve actually become much more efficient, which means we as a team can deliver more and better information. After all, everything goes much faster.”

“Getting the FP&A applications to work properly is different from simply converting a spreadsheet. But if you do it the right way, the possibilities are limitless.”

Application for multi-year budgets

For this reason, the water board’s Finance team wants to start using a third application of the FP&A software: an application for multi-year forecasts that includes future annual operating and payroll costs. “We currently do this using spreadsheets.”

Kraster also plans to use the multi-year forecasting application to run through various scenarios—partly to inform the water board’s board of directors even better and faster about developments and their effects on the budgets, and partly to keep the impact on water board tax rates under control. “So we use these applications to improve our processes. It requires thorough preparation and close collaboration with the software developer—in our case, 4CEE. What I’ve definitely noticed is that getting FP&A applications to work properly is different from simply converting a spreadsheet. But if you do it the right way, the possibilities are limitless,” Kraste concludes.