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Selection & implementation of a Planning & Budgeting solution

This case study will explain element61's crucial role in the preparation, tool selection, implementation and delivery process for an enterprise-wide Planning and Budgeting solution. It will first discuss the business and technical challenges faced by the customer and then present the approach that was taken to deliver the business results.

 

The Customer

The customer is De Lijn, the organisation that is responsible for the preparation, planning and execution of all public transport in Flanders by bus or tram. It employs approximately 7.000 employees and is organised in five operational entities and one central HQ. Each local entity is relatively autonomous in the sense that they have their own operating budget that they manage according to policy restrictions and in line with the strategic planning cycle. De Lijn's total annual budget exceeds € 800 million, of which employee costs and bus operations subcontracting are the biggest components.

The Challenges

The Financial management team found that the existing Excel-based budgeting process was inadequate for a number of reasons, both business and technical. They were experiencing the following:
  • Inefficient and time-consuming workflow based on the e-mailing of excel sheets between budget owners and central controlling department.
  • Difficult to get a correct and comprehensive view on the global budget for the entire organisation at any point in time.
  • Hard to track budget preparation progress and follow-up budget owner responsibilities.

    Cumbersome integration with strategic planning processes.Budgets for departments and regional entities not always based on objective drivers and parameters. Detailed information of how the budget is built up is not available to Finance department in HQ.

A phased approach to a solution

It was quickly realized that the solution to the identified issues would have to be more than a spreadsheet system and also that custom development would be unable to address them. From the central department that is responsible for the budgeting cycle on the one hand and all Business Intelligence initiatives on the other hand, a project roadmap was designed. First stage was the selection of the appropriate software tool to support the Planning and Budgeting process. This selection process was done in collaboration with element61 and took approximately three months.

The different steps in the software selection process included: Request for Information, product demonstrations, reference calls and finally an on-site Proof-of-Concept with relevant customer data. The results of each step were evaluated by a cross-functional team. These steps and the substantial investment they represent allowed the customer to finally make a very well founded and objective choice for the best tool for the job. Cognos Planning was ultimately a clear winner, as it scored best in all categories of criteria, namely security, workflow, user interface, system interfaces, reporting, analysis, technical aspects, support, documentation and training.

After the choice for the tool had been made, executive management made a first delivery of a budgeting model a top priority. The scope of this pilot phase was set to replace the existing spreadsheet based budgeting for the operational entities by a more robust solution in Cognos Planning. Purpose was not only to provide a quick win and therefore ROI, but also to build up the necessary skills with the tool. element61 assumed a central role in the timely delivery of this project by providing the project management as well as the Cognos Planning expertise. This first phase, including technical installation and training, took less than three months from start to finish.

In the next phases, the budgeting for the different departments is gradually being worked out in more detail. This means that the departmental budget is built up based on a set of objective drivers and parameters, rather than being left at the discretion of the current high-level budget owner. This also implies that the concept of budget ownership will be spread out much further through the organisation than currently is the case. The customer plans to push budget ownership down to the level of the local bus depots. Together with the people in the various departments, this implies a potential user community of 300+ people.

In the design and delivery of these next phases, element61 is not only in charge of project management but also responsible for the overall architecture of the solution. Crucial in this new architecture is the central position of the data warehouse. This data warehouse is not only the source for historic data and reporting but will also be used to store information entered via the budgeting application. This will ensure that both past and future information is stored in a similar way on a uniform platform and can therefore easily be used for e.g. budget vs actual calculations and variance reporting. Furthermore, drill-through to underlying details is easily performed through the data warehouse integration. Budgets in the future will be built up from driver-based planning information in the data warehouse that is combined with cost parameters in order to derive a financial budget. This will support a quick and efficient preparation of the budget process but more importantly also ensure maximum objectiveness of the budget figures.

Results

Even if the project is currently still under way, a number of the target benefits have already been achieved by implementing the first two phases. By replacing a spreadsheet based system, the control by the HQ over the budgeting process has increased substantially. Furthermore, the margin for errors has been reduced and overall budget figures are more readily available.

All of this has made the budgeting cycle a less time-consuming and labour-intensive process, for the business users as well as for the central budgeting department. It is also less error-prone which has increased the confidence of all involved in the budgeting process and the resulting financial indicators.

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