Published on 01-Oct-2009
"This unified, automated system now allows us to trace the origins of our planning and accounting data. The procedure for introducing changes has been simplified—recalculating the budget to take account of ongoing adjustments can now be carried out practically in real time." - Sergey Fedorov, Deputy CEO Manager of the Sportmaster Group
IBM Business Partner:
Sportmaster Group needs transparency of business procedures
The plans for Russia’s Sportmaster Group’s further expansion meant that its existing solutions were struggling to cope with processing the increasing volumes of information. In addition, new demands from users – related to the speed and convenience of working with the information – were creating a need for extended budget data analysis capabilities.
Integrate the budget planning system based on IBM® Cognos® 8 Planning with external accounting systems
• Transparency of business procedures • Greater accuracy of budget data • Shortening of budget cycle • Simplification of procedure for making changes to budgets • Ability to recalculate budgets in real time • Greater reliability of business information • Ability to calculate budgets quickly for each division
The Sportmaster Group is a leading actor in the Russian sporting and leisure goods market. The Group includes the Sportmaster chain (the largest chain of sports shops in Eastern Europe), the Sportlandia and Columbia franchising chains, and the O’Stin chain of clothes stores.
In addition, the Sportmaster Group distributes more than 200 trademarks. The Group owns the exclusive rights to a range of brands within the Russian Federation and the CIS. The Sportmaster Group is also actively developing a line of own-label goods.
Automation tools are essential for organizing budget planning in large, geographically distributed companies. Historically, budget planning in the Sportmaster Group was carried out using applications developed in-house, and based mainly on MS Excel. However, the size of the Group’s business and its plans for further expansion, assuming annual growth of over 50%, led it to consider implementing a new, more powerful tool.
Sportmaster found that the existing solutions were struggling to cope with processing the increasing volumes of information. In addition, new demands from users— related to the speed and convenience of working with the information—gave rise to a need for extended budget-data analysis capabilities.
The Sportmaster Group’s management decided to improve the company’s budget-planning procedure by developing a new budgeting methodology and introducing an automated, industrial-scale system to support budgeting. Two of the key criteria in the selection of the automation tool were the ability to adjust the system flexibly to the customer’s business model, and the ability to implement changes to the system independently in response to changes in business processes. In view of these requirements, a solution from IBM was selected as the platform to implement the system.
Sportmaster invited IBS, a company with extensive experience in the implementation of budget planning systems on the IBM Cognos Planning platform, to develop the system. A Platinum Cognos Partner, IBS has a skilled team of consultants and an efficient methodology for carrying out information system projects at large Russian enterprises and divisions of international companies.
In the course of the project, IBS’s consultants worked with the customer’s employees to meet the following objectives:
- • to draw up a gross profit budget
• to draw up a budget for investment activity (such as opening new stores, capital investments)
• to draw up an operating-expenses budget for all of the Group’s divisions (more than 500 centers of responsibility) from the perspective of the consumer and the budget manager
• to agree on functional items of the operating expenses budget with the individuals responsible for these functional budgets
• to draw up a consolidated Revenue and Expenditure Budget, a Cash-Flow Budget, and a Balance Sheet of Payables and Receivables for the company
• to draw up a Revenue and Expenditure Budget for the divisions, taking into account internal turnover of goods and services
• to integrate the budget planning system based on IBM Cognos Planning with external accounting systems.
The project was launched on March 6, 2006. The first stage, top-down budgeting, was completed on April 15 of that year, and the second stage, bottom-up budgeting, on June 15, just two months later. Implementation of the entire project was complete by August 2006, and industrial operation of the system commenced.
“Following completion of the first phase of the automated system introduction, we were already seeing an increase in the transparency and accuracy of administrative data and a reduction in the time it took to draw up plans,” says Sergei Fyodorov, Deputy Manager of the Sportmaster Group. “This unified, automated system now allows us to trace the origins of our planning and accounting data. The procedure for introducing changes has been simplified— recalculating the budget to take account of ongoing adjustments can now be carried out practically in real time.”
The IBM Cognos solution supports a new budget planning and accounting system by ensuring the transparency of business procedures. Budget data is more accurate, and the duration of the budget cycle has been shortened.
The procedure for making changes to the budget has also been simplified. Calculating the consolidated budget after any adjustments were made used to be a very time¬consuming process. Changes can now be made, and the budget recalculated, practically in real time.
The main advantage of the new system has been the reliability of business information. The ability to carry out additional data analyses from numerous perspectives enables managers to make well-founded decisions based on more accurate and up-to-date information.
In the course of the project, which was completed in 2007, the budget model embedded in the budgeting system was expanded and developed, and the number of IBM Cognos Planning workstations has also been increased. This expansion has enabled the Group to calculate separate budgets for each division of the Sportmaster Group quickly and accurately.
About IBM Cognos BI and Performance Management
IBM Cognos business intelligence (BI) and performance management solutions deliver world-leading enterprise planning, consolidation and BI software, support and services to help companies plan, understand and manage financial and operational performance. IBM Cognos solutions bring together technology, analytical applications, best practices, and a broad network of partners to give customers an open, adaptive and complete performance solution. Over 23,000 customers in more than 135 countries around the world choose IBM Cognos solutions.
Products and services used
IBM products and services that were used in this case study.
Cognos 8 Planning
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