About the business
A theater company sought out a new ERP solution for its chain of luxury movie theaters and associated operations, including bowling alleys, catering services and restaurants. It recently expanded by purchasing a new theater located outside its historical territory. The organization has a history of striving for technological advancement in its operations. It holds the distinction of being the first theater group to install a digital projector in the state of Michigan and the first to convert its entire operation to digital cinema, among others.
“The biggest challenge facing the chain overall was a lack of integrated systems.”
The business challenges faced
The biggest challenge facing the chain was a lack of integrated systems across its operations. Separate systems utilized included Hollywood Payments, a ticketing software for patrons and associated management for required payments to film studios, which was managed manually. The theater chain used QuickBooks to handle accounts payable and many other bookkeeping concerns as well as separate software platforms to manage the point of sale for concessions, with different programs used at their locations. Similar issues existed with multiple catering management, employee expense and payroll systems in place across the company.
The missing integration meant a large amount of work in terms of manually re-entering information across separated systems into QuickBooks to generate checks and financial information. A lack of reconciliation was also a major concern, as information remained disparate and couldn’t easily be used to verify bank balances and similar financial concerns.
A move toward more cohesive and successful ERP solution
With an eye on growth, the company reached out to a consulting firm to help it streamline and improve operations in advance of plans for expansion. The many manual processes in place were identified as a major hindrance to growth, especially as the company didn’t want to compensate by simply hiring more staff. The theater chain decided to work with The TM Group because of the advanced solutions and support it offers. Specifically, the chance to integrate systems instead of continuing to deal with disconnected software was a major motivator. With Microsoft Dynamics GP as the base, The TM Group crafted a highly functional and efficient ERP solution.
Modules used in Dynamics GP include General Ledger and Accounts Payable. Add-ons included Mekorma MICR to generate MICR checks with an automated signature and Nolan Advanced Bank Reconciliation, which lets the business efficiently manage the separate bank accounts used by each location. The TM Group also added Binary Stream Multi-Entity Management to give the company ease of use and better insight over its many locations through a single multi-company interface. This was especially important because each theater has a separate groups of investors but a single management structure.
“The theater chain decided to work with The TM Group because of the advanced solutions and support it offers.”
Multi-Entity Management was especially helpful in dealing with gift certificates, which previously required a large amount of work. The TM Group built standard financial reports such as balance sheets, income statements and cash flow and allowed them to be either consolidated or segregated based on the type of analysis required. This means one, some or all theaters can be analyzed. Training on Management Reporter was also provided. The organization currently uses built-in reports and expects to create custom ones in the near future. For example, statistical information from theaters can be passed through to the ERP system and included on financial statements, to determine important metrics like revenue and cost per visit.
The TM Group utilized eOne SmartConnect to provide the many integrations. The TM Group also trained the client’s staff to build integrations, meaning the company is writing many of its own integrations. After The TM Group completed the companywide integration for the Vista point-of-sale system, the most widely used software for the business, the client’s developers started developing their own integrations to other systems.
With all the different bank accounts that need to be separately reconciled through the Nolan ABR system, The TM Group wrote integrations to import the monthly statements using the BAI 2 format provided by the banks. This major improvement to efficiency is a significant change, as bank reconciliations previously had to take place offline through spreadsheet software.
Improvement of royalty management for paying film studios for showcasing their movies was another positive development. The theater chain writes 32 checks on a biweekly basis for this purpose. Before the Microsoft Dynamics GP project, the labor required of staff performing this duty was intense. The process took a single employee two full work days, twice a month, to complete. Manually totaling sales, determining commission payments and wiring the funds, as well as reconciling the transactions with accounts after the fact, all took a significant amount of time.
Working with the theaters’ consulting firm, The TM Group revamped the company’s chart of account structure used to further increase efficiency. Its previous format was disorganized and didn’t allow for segregation based on the different entities that make up the company and lacked commonality across those different units. Now, the reporting is much more flexible and effective. The TM Group also added a line of business element, essential to determining specific revenue from the theaters, restaurants, bowling alleys and catering services. Now, the company can drill down into revenue and costs at the line of business level to analyze individual aspects of the organization.
“With a new ERP system in place, the theater group is positioned to expand effectively.”
A hardware change also provided some major efficiency benefits. The theater chain decided to use a centralized server system and put all locations on the same network. Instead of needing to maintain individual computers and servers, the company now only has to deal with a single hosting provider. From a reporting and data-flow standpoint, this approach consolidates and eliminates many issues around information gathering, completeness and quality.
Better equipped for development and growth
With a new, customizable and powerful ERP system in place, the theater group is positioned to expand effectively. With so much busywork and data entry eliminated and drastically increased visibility into operations, the organization is in great shape to take advantage of the improvements and follow through on expansion.