Clearway Energy Group’s OneStream Journey with Finit –
Objectives, technical solution spotlights, and benefits
Clearway Energy Group’s transition to OneStream simplified their business processes, automated cash flow, decreased their close time, improved their account reconciliation process, automated their equity calculation, helped with people planning, enhanced reporting, all while bringing everything into a single platform. They accomplished all this and lowered their investment in technology. OneStream completely transformed how Clearway Energy does business.
Recently, Finit and Clearway held a panel discussion webinar in which Sarah Rubenstein, Ryan Maniscalki, Travis Rymon, and Tom Brown from Clearway, joined Finit’s Mary Chan, Cathy Lawton, and Angela McCabe.
This blog complements the webinar, outlines the business problems that Clearway experienced, and summarizes how OneStream and Finit built a new comprehensive CPM solution.
Clearway develops and upgrades renewable energy facilities. Clearway is one of the larger renewable energy generation companies in the U.S. that owns, operates, and develops renewable assets in more than 26 states across the nation. In addition to renewable generation, the company has a small number of conventional gas natural gas assets, including thermal cogeneration, as well as battery storage facilities for renewable assets. Clearway participates in every stage of the renewable lifecycle, from business development through commercial operations. The company currently has over 350 projects in operation, which are valued at over $9.3B, with annual revenues over $1.3B, and assets totaling over $12B. The public portion of Clearway, Clearway Energy, Inc. trades on the NYSE under ticker symbols CWEN and CWEN.A.
Clearway separated from NRG in August of 2018, when it was acquired by a private infrastructure company, Global Infrastructure Partners (GIP). Currently Clearway has over 600 employees, 5 corporate offices, and more than 350 renewable sites, and the company is growing nationwide. They partner with their customers in their communities to provide clean, competitive, and reliable renewable energy. Clearway avoids 8.8 million metric tons of CO2 emissions, which is the equivalent of taking 1.9 million cars off the road each year and powering over 1 million homes with clear, clean energy.
Why was Clearway looking for a new financial technology system?
Clearway’s initial objective was a temporary “lift and shift” of their finance applications, including the SAP ERP, HFM, and Hyperion Planning. They aimed to create a temporary EPM environment until they could pursue cloud-hosted systems of their own. They had a TSA with NRG for infrastructure support and a bridge license with Oracle for Hyperion Systems until early 2020, which was the deadline for implementation efforts.
Clearway’s previous state
Before the spin-off, Clearway considered a variety of EPM systems and had demos of all available options. They looked at BPC, FCCS, PBCS, as well as OneStream. They quickly recognized OneStream could meet their functional requirements while achieving the benefits of a single system.
In the original state, SAP was their ERP. HFM was used for consolidations and external reporting. Hyperion Planning was utilized for the planning analysis and internal reporting. FDM was used as the mapping tool that would take data files and load to HFM. As part of NRG, they utilized Trintech for account reconciliation and close management. When Clearway was spun off, the team moved to a manual process. In this state, there was data moving between many siloed solutions, creating a highly complex environment.
Clearway wanted a unified platform. “We definitely wanted a fully integrated platform like OneStream to eliminate all the issues, have a low cost of ownership, and eliminate multiple licenses,” stated Tom Brown.
Issues & Challenges
Clearway’s primary challenge was complexity. NRG had an extremely complex installation of Hyperion HFM and Planning. Most of this complexity was related to the renewable energy assets and structures. In HFM there were many legal entities, many standalone financial reporting requirements, complex ownership structures; and, there was a need for equity pickup (EPU). In the planning system, challenges included a long-duration budget/forecast process (extending 30 years), management reporting hierarchies by cost center, budget/forecast granularity – down to project/program level, bridge reporting for non-GAAP financial metrics, etc. In addition, metadata management across multiple platforms had been tedious, time-consuming, and high risk. There were significant efforts put in place to ensure metadata was synchronized.
Another of Clearway’s CPM systems evaluation considerations was potential automation. Clearway’s cash flow was performed manually in Excel and took a significant amount of time to prepare. Automation was previously pursued and was considered a high priority for the next EPM system.
As an organization, Clearway goes through a significant amount of common control asset sales from their development entity to their publicly traded entity. The common control sales require several manual reporting adjustments that are very burdensome. Automation for these areas was also a top priority for any future system.
From the user perspective, there was a lack of understanding as to how to pull necessary data and from where to pull it. Financial and operational data was stored in different applications. Clearway had actual data in HFM and budget/forecast data in planning, with both systems set up differently in terms of metadata and Excel add-in connections. There were significant data reconciliation efforts required to ensure actuals were appropriately transferred to Hyperion Planning. In addition, there were extensive manual processes that took place outside of the EPM system related to data analysis and the creation of management reporting metrics. Too much time was spent tying data between the systems. Clearway had a goal to eliminate data transfer complexity back and forth between all of the different products and to reduce time spent on data validation. The prior environments were set up differently and controlled by separate admins, and sometimes had even different management teams.
The final issue was system licensing. There was a dire need to implement a new EPM system before Oracle’s bridge license expired; otherwise, there would be a significant cost burden on Clearway. Cost reductions were gained due to reducing significant license costs across many applications. Clearway achieved synergies by moving four systems into one, and removing licensing and the administration costs of four systems. Overall, Clearway was enthusiastic for the idea of the simpler architecture and decreased costs.
Overall Solution Delivery
Finit helped Clearway with the implementation of OneStream to improve their financial close and consolidation, planning, reporting, and process automation. For close and consolidations, Clearway made several improvements using OneStream, including enabling automated eliminations. Previously manual calculations and entries for consolidation of wholly and partially owned subsidiaries equity and retained earning balances are now automated in the system. OneStream functionality and business rules were leveraged to automate initial calculations in preparation of GAAP Cash Flow. The Common Control Asset Solution provided a method for automation of complex reporting requirements. Clearway developed structure for GAAP and non-GAAP reporting, which allowed users to get reporting using different views using the same data set. EPU, on-demand rules, as well as rollforwards, were incorporated into the new consolidation solution. OneStream also utilized the Account Reconciliations MarketPlace Solution to automate reconciliations, which helped streamline the whole close process and save time by eliminating manual work. Task Manager from the MarketPlace further provided a consolidated view of close steps across all locations to better track progress and decrease close time.
In FP&A, Clearway improved expense planning to now include 30 years of budgeting and forecasting. (This includes OneStream agreeing to increase the year limit). The People Planning Marketplace Solution that was implemented has detailed calculations for all employees for two years, and calculations for cost centers (entity dimension) with the inflation factor applied for remaining 28 years. It provides accurate total cost-per-employee, including its complex calculation ability and improved expense planning. OneStream handles Clearway’s workforce expenses automatically. For instance, there are 28 “by employee” allocation methods including salary/wage and merit increases (union and non-union), bonuses, headcount, taxes, 401k, medical, overtime, as well as specialized bonus calculations. Complex calculations for bonuses include accrual and cash activities to show the spread by period and cash payout period.
The OneStream FP&A solution accounts for accurate budget/forecast by project/program and geography. Overall, there is an improved process with the leveraged existing FP&A workflow that now incorporates People Planning as part of budget/forecast workflow, with added security to disclose salary data to designated users only. Another task that had historically been done outside of the system was automating non-GAAP metrics. Clearway was never able to achieve these in prior systems, so it was a high priority for their future CPM system.
OneStream streamlined Clearway Energy’s business processes for a much-improved solution. Tom Brown stated, “Your implementation partner is key to dealing with challenges…with others you get one option, with Finit we get 7 different options and best practices.”
“Your implementation partner is key to dealing with challenges…with others you get one option; with Finit we get 7 different options and best practices.”
Technical Solution Spotlight #1: Cash Flow Automation
There were several challenges in Clearway’s original system. This included the existing HFM-based cash flow solution which did not work and did not meet Clearway requirements. There were manual processes required to produce the cash flow statement. Clearway had a requirement to bridge GAAP cash flow (External Reporting) to cash available for distribution (CAFD) for Reg-G tie-out.
This new solution leveraged an audit-friendly 3D cash flow approach for automated GAAP cash flow design for all entities. It automated CAFD calculation, GAAP cash flow, eliminated a manual spreadsheet process, and developed a complete solution requiring minimal maintenance. Benefits to this technical solution include a greatly improved cash flow process and CAFD metric analysis through automation and elimination of manual processes/spreadsheets. It also provided additional transparency into the data and bridge between GAAP cash flow and CAFD, and Reg-G tie-out.
Technical Solution Spotlight #2: Equity Pickup
Clearway had highly complex/cascading legal ownership structure and reporting/accounting requirements. The Equity Pickup (EPU) solution needed to satisfy requirements for approximately 70 different standalone reporting requirements and 600 business relationships to provide a fair picture of the portfolio value at each legal entity level.
Clearway was very up front with their consolidation complexity in all their evaluations. After evaluating FCCS, they were unable to do EPU and that tool had a fair amount of user-defined dimensions. Clearway had used all four dimensions in HFM; and FCCS only had two at the time of the evaluation. They reached the conclusion that Oracle tools could not handle their data, which was also too large for what FCCS could handle. Clearway even requested to contact references that were implementing FCCS and they couldn’t find a good example of a company that was similar in size or complexity.
The new OneStream solution automated a majority of EPU processes. It leveraged sibling consolidation pass functionality to ensure all ownership between sibling entities consolidated accurately. It utilized a combination of entity, account and UD4 dimensions to facilitate complex calculations and business rules to calculate and store percent ownership for each entity/relationship. Clearway developed a process for updating and maintaining ownership and sibling consolidation pass for proper consolidation sequence, as well as confirmation rules and threshold to validate the accuracy of the ownerships (e.g., prevention control if ownership exceeds 100%).
The main benefit to Clearway is the significant process improvement. They now have an automated solution that reduced manual effort and improved efficiency of the EPU process. This really improved the month-end process by providing consolidated results with EPU earlier in the close process.
Technical Solution Spotlight #3: Account Reconciliation
For Clearway Energy, account reconciliations were a decentralized, manual, Excel-based process. It lacked adequate visibility into key account controls for internal financial reporting. Moreover, this caused quality and potential control issues in the original system.
Utilizing OneStream’s Account Reconciliations Marketplace Solution, they developed auto-reconciliation rules based on Clearway’s accounting policy (including thresholds based on SAP transaction counts). These custom rules extract all audit packages simultaneously. The dashboard now provides visibility to completion status for end-users and admins to monitor the process.
The new system has improved the overall account reconciliation process through automation, enhanced visibility, transparency, and preventative controls. It has enabled and ensured timely completion and accuracy of account reconciliations.
Why did Clearway Choose OneStream?
Per Ryan Maniscalki, “Since OneStream provided 100% transparency and allowed us to talk to many different references, that is why we don’t mind being on the other side of it now, to speak about our experience with the solution.”
Once the decision for a new CPM solution was made, Clearway had to go through an investment review by their sponsor company, who really pushed them to examine all potential alternatives, and then to really focus on customer references. Ultimately, they found that they really could not find a solution that could compete with OneStream that would meet all the requirements in one application. Every single customer reference Clearway called gave glowing reviews, so Clearway felt very confident in their decision to select OneStream.
Clearway sited several synergies as reasons why they selected the OneStream platform.
Early in the webinar Tom Brown shared a funny story about how Clearway first was introduced to Finit. Clearway was having issues with their initial implementation of HFM (which was not built by Finit). They had asked several consulting companies to come and review the issues in preparation for a Phase 2 of the project. Each company had 3-4 people in suits who gave presentations off their laptops. The fourth company to participate was Finit. In that meeting was just one person, Rob Cybulski, who is Finit’s founder and CEO, and who was not in a suit. He sat down and listened while Clearway explained their issues. Rob then went up to the whiteboard and, as Tom said, “He draws some stuff out and solved our first problem right there on the whiteboard. We started receiving some emails back and forth and he went on and solved three more of our problems, even before we engaged him. So, at that point it was no-brainer. He just basically knocked our socks off.”
Clearway described how Finit has established a proven partnership with their team time and time again. They love Finit’s focus on the importance of design and art of the possible. Clearway has shared that Finit has “phenomenal understanding of requirements and overall vision.”
They went on to talk about Finit’s internal collaboration with the Finit forum, where they basically had access to feedback from all Finit’s consultants, not just their project team. Tom summed it up by saying, “Even if a particular consultant didn’t know something, they asked the Finit community and someone always had experience.”
Clearway gave further recommendations for Finit training with custom classes throughout the project with excellent user feedback. Finit Answers, the pay-as-you-go post-implementation support, with quick response time and no retainer fee or minimum hours, was also highly recommended. Clearway couldn’t say enough awesome things about Finit, including, “Success falls with the implementation partner…we were never over budget; and [completed] in line with estimates. Finit was A+ quality the whole way.” This was just one more example of how Finit delivers unmatched experiences.
Contact Finit today to learn how you can get transparency into your CPM processes.
For more information, please see the recorded presentation: