Published on 07-Jul-2009
Validated on 17 Feb 2011
"It used to take us weeks of hard work to update our budget, and now with the IBM Cognos TM1 system, we could do it in a day or two if we were really pressed for time. So we’re saving at least a week, which is great." - Jessica White, Operations/Financial Analyst, CiCi’s Enterprises
IBM Business Partner:
CiCi’s chose the IBM® Cognos® solution so that finance and operational managers – including the Chief Financial Officer – could access important and fast-changing business data in real time, and help drive better business and operational decisions across the organization at a cost that was effective for CiCi’s.
Create reliable, easily readable budgets and forecasts using affordable and scalable analytics and reporting applications.
An IBM Cognos TM1 system, which provides timely, accurate, real-time financial reporting and supports forecasting and complex financial analytics.
Highly reliable reports generated quickly from various data sources; budgeting tasks accomplished in minutes, rather than days; forecast estimates achieved in a fraction of the previous time; freeing of business analysts and executives from mundane tasks; rapid adoption due to ease of use.
Based in Coppell, Texas, CiCi’s Enterprises, LP, operates 650 restaurants in 30 states and expects continued aggressive growth. Each CiCi’s location provides its customers with the ultimate pizza experience through a gourmet buffet of pastas, salads, desserts and 16 kinds of fresh-from-the-oven pizzas. CiCi’s supplies its franchisees through its JMC Restaurant Distribution unit, which provides purchasing and distribution services solely for CiCi’s. This means all locations receive exactly what they order 99.99 percent of the time, a rarity in the restaurant business.
Since opening its first restaurant in Plano, Texas in 1985, CiCi’s has grown to become the eighth-largest pizza chain in the US, and is well known for its all-you-can-eat buffets. The company was ranked among the Top 25 Franchises in 2005 by the Wall Street Journal and number one for sales and unit growth in the pizza chain category for the past three years by Nation’s Restaurant News.
CiCi’s needed to access its data in a quicker and more structured manner so that everyone from human resources to finance and operational managers could make better-informed decisions on a wide range of issues, including purchasing and development, distribution of food supplies, sales and marketing, and even fraud. Also, CiCi’s immediate need was to increase the accuracy of its marketing budgets so that it could better align budgeting goals with company objectives for increased marketing and operational efficiency.
The quick-service restaurant chain needed to improve performance management with a tool that could be accessed by a broad set of users. Since it does business in an industry where sales and data from franchises change daily, CiCi’s must be continuously agile. The need for reliable, accurate up-to-the-minute data is constant, and without it, financial analysts and directors are operating at a disadvantage. What’s more, this data needs to be easily accessible, no matter when it’s needed.
“Having all of our data in one place from all of the different departments and companies is key, because it allows us to integrate them in ways that we wouldn’t have thought of doing on our own before,” says Jessica White, Operations/Financial Analyst, CiCi’s Enterprises.
Also of note, managers wanted a solution that enabled the organization to view the company’s revenue and operations figures in a variety of ways, such as over time or by geography.
CiCi’s evaluated several vendors including Hyperion Essbase before ultimately selecting the Applix TM1 system, which became IBM Cognos TM1 when Cognos bought Applix. Thanks to support from Cortell Group, the IBM Cognos business intelligence (BI) and performance management consultants and implementation partners, the solution was implemented quickly to meet the expectation of supporting performance reporting with the organization’s vision and strategy.
Once implemented, IBM Cognos TM1 first addressed an area of need in accounting. CiCi’s was able to dramatically reduce the potential for manual errors, and make accounting more efficient within several areas, such as reporting on franchisee royalties and marketing fees. The solution helped make these processes much more efficient, and, as a result, CiCi’s could maximize revenue by gaining more insight into these areas far quicker than before. CiCi’s was so impressed with the increased insight and the capabilities displayed with this first step, that it decided to use the solution for even more complex projects, including creating budgets based on store sales, distribution centers and new store openings. Using IBM Cognos TM1, CiCi’s was able to increase visibility and streamline data that was housed previously in hundreds of different reports.
“We’ve been able to import data that tracks where we are in the process of opening new stores, to get a better idea whether we’re on target and how many we can expect to have open,” White adds. “And, of course, this all affects our budget. If we’re not on target, we’re able to identify where we’re stuck and be able to talk to various departments to solve the problem.”
Now, CiCi’s executives are able to see at any given time - in one single report - how the development of each and every new restaurant is progressing before their scheduled openings. Reports on store development are usually generated once a week for informational purposes, and they are also used to drive accountability. Executives can see which phase each and every store is at in the process, giving them far more insight than they had previously. When new CiCi’s stores open on schedule, they start generating revenue more quickly, whereas delays can be costly and affect forecasts.
Benchmarks in IBM Cognos TM1 can be compared to actual progress, and this initiative has helped keep new openings on track according to growth plans. CiCi’s aims for its stores to open in just under one year from the time development plans start. Whether it’s with development of new locations, or other areas of the company, the overarching goal is to move to a real-time environment wherein executives are able to obtain more financial and operational insight whenever it is needed, according to White.
Another area of success for CiCi’s IBM Cognos TM1 system is its JMC Restaurant distribution unit. Management has turned its attention to gaining more financial effectiveness in expense management, and is now focused on getting financial reports ready to track profitability more accurately. For example, if margins on some of CiCi’s food products change, budget analysts can use IBM Cognos TM1 to pull up an array of information on specific stores and look at the last invoice imported into TM1 to double-check on factors such as pricing structure to make sure everything is accurate, without having to go out to all of the different data sources and generate reports.
By using the IBM Cognos TM1 solution in so many different ways, CiCi’s has been able to provide more accurate, timely budgets and forecasting, all in less time. By implementing a new system with comprehensive checks and balances to prevent errors, and automation to consolidate plan data, analysts who once worked on charts for almost half their work week are now free to do other more value-added tasks. Executives who used to spend time consolidating data can now use IBM Cognos TM1 to create pivot tables for analysis quickly and easily.
For example, analysts can now determine more accurately how much food supplies are being used at specific stores in certain timeframes. For instance, CiCi’s tracks item usage and average “tray cost” as they test a redesigned buffet to include a hybrid salad bar and updated stations to reduce waste and increase profits for stores. Using IBM Cognos TM1, they can determine if trends in usage are making this change a profitable one. White says, “We can now run through a few “what-if” budget scenarios in a day, and be prepared for questions we think management and investors will ask.”
CiCi’s system users now include the chief financial officer, human resources and sales and marketing teams touching IBM Cognos TM1 on a daily basis. In terms of speed, specific budgeting tasks that once took several hours are now completed in a few minutes.
“They literally used to spend four days a week, among all of the people on the marketing team, doing their reports manually, and now it’s done in minutes, probably in most cases within 10 minutes,” says White.
To get the first budget pass, it used to take CiCi’s a couple of months, including the time to round up data - new store openings, closing, forecast store sales growth and so on. Now, with IBM Cognos TM1, the first pass is usually completed in a month or less. White explains, “It’s hard to quantify and compare, since the bulk of the time is spent getting input from the departments, but revisions to the budget that used to take up to two weeks can now be done in a day.”
As further evidence of the success of the financial analytics platform, CiCi’s has recently upgraded to the latest version of IBM Cognos TM1, and finance managers are so confident in the system that they are planning to roll out IBM Cognos TM1 Web dashboards for regional managers. Such a move will enable even more executives to see firsthand how efficiently the company is being run, how it can be further improved, and just how the many complex, detailed financial reports can be delivered so quickly.
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.
For further information or to reach a representative: www.ibm.com/cognos
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IBM products and services that were used in this case study.
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