Published on 14-Oct-2010
"The finance team was using IBM Cognos TM1 the day after we went live. The install went very smoothly, with the entire project coming in on time and under budget." - Ben Murray, Director of Financial Planning and Analysis Pinnacle Airlines
Travel & Transportation
Business Analytics, Business Integration, Business Performance Transformation, Performance Management
IBM Business Partner:
Pinnacle chose the IBM Cognos TM1 solution because of its powerful analysis capabilities ability to be implemented very quickly.
The company needed to replace a slow and labor-intensive process that involved extracting financial data in batches from its GL application, then importing the data into multiple Excel files. This means of managing financial information left their financial planning and analysis staff little time to analyze the information.
Pinnacle selected Revelwood to design a BPM solution comprised of Revelwood’s BPM Suite and IBM Cognos TM1 to automate their data collection process and provide powerful analysis capabilities.
The benefits afforded by the Revelwood-IBM Cognos solution included the automation of their data collection process, improved data quality, ad hoc analysis capabilities, the ability to drill down into GL transaction-level data and reduced man-hours for monthly close.
Pinnacle Airlines Corp. (NASDAQ: PNCL), an airline holding company, is the parent company of Pinnacle Airlines, Inc. and Colgan Air, Inc. Pinnacle Airlines, Inc. operates a fleet of 142 regional jets under Delta brands in the United States, Canada, the Bahamas, Mexico, U.S. Virgin Islands, and Turks and Caicos Islands. Colgan Air, Inc. operates a fleet of 48 regional turboprops as Continental Connection, United Express and US Airways Express. Pinnacle Airlines Corp. transports 13 million passengers per year and is the employer of more than 4,300 proud Pinnacle people.
Pinnacle Airlines, based in Memphis, Tennessee, has a tremendous passion for serving the needs of the airline industry. Pinnacle’s success in an extremely competitive industry is a result of the company empowering its people to operate a safe, reliable and cost-effective airline. The company began operations in 1985 as Republic Express and now operates 190 regional aircraft and flies more than 1,280 flights daily to 152 cities and towns in North America.
To be a cost-effective airline, Pinnacle needed to truly understand its financials. This was very difficult with the company’s existing financial process. The airline had a manual process, where it needed a business performance management (BPM) solution.
Pinnacle’s finance team had to download raw data from its general ledger (GL) system, Lawson, and export that data into multiple Microsoft™ Excel spreadsheets. As part of the monthly close process, this manual approach to collecting financial data had to be done each month.
The finance team of eight people, led by Ben Murray, director of financial planning and analysis, had no way to automate the data collection process. As a result, many man-hours a year went into data collection and manipulation.
Not only did Murray’s team have to go through this monthly process for Pinnacle, but the team also had to manage the financials for the airline’s two subsidiaries. In total, the monthly closing process took seven to ten days to complete. Just the importing and aggregation of data took at least one
hour per day.
The amount of time dedicated to extracting information from the GL and then compiling it in Excel left little time for actual financial analysis. And, by keeping the data in spreadsheets, the finance team was limited in how they could analyze and consolidate the information. Essentially, there was no way to drill-down into details, look at data in different ways or do any type of ad-hoc analysis.
After selecting IBM® Cognos® TM1® as its BPM platform, Pinnacle evaluated several leading BPM implementation providers. Pinnacle had two key criteria: experience working with Lawson, and the amount of time and resources the implementation would take. Based on these factors, Pinnacle selected Revelwood to implement the airline’s new financial system based on TM1.
“Not only did Revelwood deliver the shortest implementation cycle, but they also offered a number of pre-packaged implementation accelerators including templates, reports and data management tools in the Revelwood BPM Suite™,” said Murray. “Revelwood’s experience and pre-packaged BPM modules played a significant role in meeting our aggressive implementation schedule.”
During that process Revelwood worked with the Pinnacle team on a regular basis. Revelwood’s approach included holding meetings with Pinnacle every two weeks. These meetings resulted in Pinnacle always knowing the status of the implementation. Additionally, Revelwood offered Pinnacle the flexibility to have the Revelwood team work on site at Pinnacle, or remotely.
Pinnacle’s BPM application went live after slightly more than three months.
“The finance team was using IBM Cognos TM1 the day after we went live,” stated Murray. “The install went very smoothly, with the entire project coming in on time and under budget.” Revelwood provided Pinnacle with analysis and design services, pre-packaged modules, IBM Cognos TM1 formulas to automate data collection from Lawson and TM1 training. Revelwood’s approach included a six-step project implementation methodology and intensive analysis and design scoping sessions.
Pinnacle is using IBM Cognos TM1 with Revelwood-built components for Wage & Benefits and Capital Expenditure models. The Wage & Benefits model allows Pinnacle to easily budget wage-related expenses and analyze employee compensation costs on a monthly basis. The capital model allows detailed project data entry, which integrates the resulting depreciation expense into the budget. The data presented allows Pinnacle to accurately assess personnel and capital expenditures and make appropriate resource allocation decisions. In this tight economy, that translates into efficiency, savings, and financial transparency.
Moving forward, Murray and his team plan to use IBM Cognos TM1 for detailed profitability analysis and more. Murray adds, “The BPM system will enable us to discover issues. We can now drill-down into GL-level transaction detail and analyze the numbers faster. This level of data will empower our team to be more pro-active and offer better customer service.”
IBM Cognos TM1 gives Pinnacle’s team access to data that they previously didn’t have. For example, Pinnacle can now pull near real-time data out of Lawson and perform ad-hoc analysis on that data. Just one use of this is to analyze flight crew hotel costs, enabling the airline to make swift decisions to save expenses on variable costs.
“We are receiving tangible benefits from IBM Cognos TM1 with Revelwood’s BPM Suite—from time savings to better quality data,” said Murray. “The intangible benefit is that the system has improved the morale of the finance team. By reducing the labor-intensive process, we’ve made the work lives of our financial analysts a lot easier. We’ve received compliments for IBM Cognos TM1 from the team.”
“With TM1 and Revelwood’s BPM Suite, we were able to shorten the budgeting cycle from three months to two months,” commented Murray. “Perhaps more important than the time savings is the increase in the quality of financial data we now get from IBM Cognos TM1. The end result is we have better data faster, leaving us valuable time to perform complex analysis and to deliver accurate and relevant data to the management team. And that enables us to remain a cost-effective airline.”
Revelwood provides performance management solutions to Fortune 1000 and mid-market companies. Our business performance management (BPM) solutions help businesses strategize, plan, execute and take corrective action—at all levels across the organization, on a continual basis, in real time. Offering products, implementation services, training and support, our performance management solutions bring ease, speed and flexibility to enterprise planning, reporting and analytics.
An IBM Premier Business Partner and Beyond Budgeting Partner, Revelwood has been recognized among the most reputable performance management solution providers in North America. Our BPM solutions extend performance management beyond the office of finance into operations and other key business areas. http://www.revelwood.com/
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