Formica Group accelerates financial analytics

Escaping from spreadsheets with an IBM Cognos TM1 solution from ICit

Published on 04-Feb-2011

"The great thing about IBM Cognos TM1 is that now we have laid the groundwork, we can re-use a lot of our existing structures to build new reports quickly and easily. We look forward to continuing to work with ICit to extend and develop the solution and deliver further value to the whole business." - Paul Foreman, European Director for Business Development, Formica Group

Customer:
Formica Group

Industry:
Industrial Products

Deployment country:
United Kingdom

Solution:
BA - Business Analytics, Business Integration, Business Performance Transformation, BA - Performance Management, Information On Demand, Leveraging Information

IBM Business Partner:
ICit

Overview

Formica Group has a long and distinguished history of product and design innovation in surfacing materials for commercial and residential construction and furniture markets. A global organisation, Formica Group has manufacturing facilities and commercial teams throughout Europe, North America and Asia, as well as holding one of the most instantly recognised and iconic brands in the market. The company employs around 3,000 people.

Business need:
Formica Group is a global enterprise, consisting of over 50 separate legal entities across three continents. The company handled its financial management processes using a complex set of spreadsheets, which was time-consuming and prone to errors and inconsistencies.

Solution:
Formica Group worked with ICit, an IBM Business Partner, to replace its spreadsheet-based processes with a centralised business intelligence solution based on IBM Cognos TM1. The solution provides a single system for financial consolidation, planning and cost-to-serve analysis, and can easily be extended to meet new business requirements.

Benefits:
Creates a single, reliable source of financial data, providing an accurate basis for business decision-making. Automates financial consolidation, saving at least eight days of manual spreadsheet-based work per month. Accelerates the consolidation element of the month-end close processes taking out approximately one day’s work. Allows the instant visibility of management data on completion of the trial balance for each entity at month end.

Case Study

Formica Group has a long and distinguished history of product and design innovation in surfacing materials for commercial and residential construction and furniture markets. A global organisation, Formica Group has manufacturing facilities and commercial teams throughout Europe, North America and Asia, as well as holding one of the most instantly recognised and iconic brands in the market. The company employs around 3,000 people.

As a result of its multinational status, Formica Group has a relatively complex organisational structure, consisting of several separate legal entities across three continents. Each entity has its own financial accounts, which need to be consolidated into a group-wide financial report on a monthly basis to help the company’s senior management make the right decisions to foster business development.

The trouble with spreadsheets
“The financial consolidation process and the majority of our other financial reporting processes, were being managed by an array of spreadsheets,” explains Paul Foreman, European Director for Business Development at Formica Group. “Each of the entities had its own 21-tab workbook, and just getting all the data together for the consolidation was practically a full-time job for one of our analysts. The month-end close was a complex process as well: it took five days to get the reports ready for management.
“In general, the time we spent on financial reporting was 80 percent data collection and validation, and only about 20 percent actual analysis. We wanted to find a better, more reliable and faster way to handle these important processes and provide data to analysts and managers across the business.”

Finding a new way forward
Formica Group considered various approaches, and following a review of the business analytics software available at the time, became interested in IBM Cognos TM1 – an ‘in-memory’ analytical server that provides the extremely rapid and scalable multidimensional analysis required by enterprises like Formica Group. The company approached ICit, an IBM Business Partner and one of the largest and most experienced TM1 specialists in the UK, and asked for a demonstration of the software’s capabilities.
“ICit came in and created a proof-of-concept for the solution in a matter of hours,” says Foreman. “They used a small subset of our actual production data and showed us the kinds of analysis we could do – for example, breaking down sales by size and profit margin in different countries, in real time. As soon as we saw the demonstration, it sparked a full-scale management meeting – we immediately recognised how valuable IBM Cognos TM1 could be for our business, and started thinking of ways we could use it to give us greater insight into our finances and operations.”
Mark Bodger, Business Development Director at ICit, adds: “Formica Group’s management team had a clear focus on what they wanted to achieve. The proof of concept model we created helped them understand the power of the solution and how they could use it to help them make better decisions based on a trusted data source.”

Building a partnership
The ICit and Formica Group teams worked together to create a project plan for the implementation of IBM Cognos TM1, prioritising the most critical reporting requirements: consolidation, planning and budgeting, and cost-to-serve analysis. The ICit team helped to integrate the Cognos software with Formica Group’s Infor BPCS ERP system, and create the large multidimensional data cubes required. The team also began training users at various levels – from those who would just view the reports through to the analysts who would create and edit them.
“We now have just one source of data, and one system that can handle everything from consolidation and reporting through to budgeting and forecasting,” comments Foreman. “The most important benefit of this is transparency: there is now a single version for everyone in the company, and everyone is making decisions based on up-to-date information.”

Helping users help themselves
“It has been heartening to see how many people in the company have really engaged with the project: they really appreciate the fact that they don’t need to spend their time collecting data, as it’s there for them to analyse whenever they want,” says Foreman. “As a result, they can get more information without spending nearly as much time and effort. To take a couple of examples, the whole consolidation process can be completed in a day, and we have reduced the month-end financial close from five days to just three.”
With the key reports already in place, Formica Group is now considering how to extend the solution to offer additional insight.
“A lot of users are suggesting new areas that they’d like us to investigate, such as headcount for the HR department, open orders for the logistics team, and inventory for the manufacturing and logistics side of the business,” concludes Foreman. “The great thing about IBM Cognos TM1 is that now we have laid the groundwork, we can re-use a lot of our existing structures to build new reports quickly and easily. We look forward to continuing to work with ICit to extend and develop the solution and deliver further value to the whole business.”

About ICit
ICit has grown rapidly to become one of the leading IBM Cognos TM1 solution providers in the UK, with more than 100 person-years experience across the company. ICit provides customers with complete end-to-end service including software sales, hardware procurement, consultancy, training, support and financing. Its people are highly experienced and knowledgeable, with expertise in finance, information technology and business performance management. The team consists of qualified accountants (ACMA, FCA) and technical experts (BSc, Masters). ICit consultants are located across the UK and offer a friendly and professional service.

About IBM Business Analytics
IBM Business Analytics 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 Business Analytics 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 Business Analytics solutions.

Products and services used

IBM products and services that were used in this case study.

Software:
Cognos TM1

Legal Information

© Copyright IBM Corporation 2011 IBM United Kingdom Limited PO Box 41 North Harbour Portsmouth Hampshire PO6 3AU Produced in the United Kingdom January 2011 All Rights Reserved IBM, the IBM logo, ibm.com and Cognos are trademarks of International Business Machines Corporation, registered in many jurisdictions worldwide. A current list of other IBM trademarks is available on the Web at “Copyright and trademark information” at: ibm.com/legal/copytrade.shtml. IBM and ICit are separate companies and each is responsible for its own products. Neither IBM nor ICit makes any warranties, express or implied, concerning the other’s products. References in this publication to IBM products, programs or services do not imply that IBM intends to make these available in all countries in which IBM operates. Any reference to an IBM product, program or service is not intended to imply that only IBM’s product, program or service may be used. Any functionally equivalent product, program or service may be used instead. All customer examples cited represent how some customers have used IBM products and the results they may have achieved. Actual environmental costs and performance characteristics will vary depending on individual customer configurations and conditions. IBM hardware products are manufactured from new parts, or new and used parts. In some cases, the hardware product may not be new and may have been previously installed. Regardless, IBM warranty terms apply. This publication is for general guidance only. Photographs may show design models. Formica and the Formica Anvil Device are registered trademarks of The Diller Corporation. © 2011 The Diller Corporation. A Fletcher Building company.