Billerud consolidates its reporting processes

Gaining a single version of the truth with help from IBM

Published on 06-Feb-2012

Validated on 16 Aug 2013

"By combining our legal and operational reporting, we’ve managed to construct a more accurate picture of the processes which govern our business outcomes, budgets and forecasts. We have also improved process efficiency and business flexibility." - Karin Svensson, Group Controller, Billerud

Customer:
Billerud

Industry:
Industrial Products

Deployment country:
Sweden

Solution:
BA - Business Analytics, BA - Business Intelligence, Information Integration, BA - Performance Management, Optimizing IT

Overview

Publicly traded company Billerud produces paper and materials for the packaging industry. The company has a long history, but the modern Billerud was created following the merger of two of Assi Domän’s and one of Stora Enso’s paper factories. The company has a turnover of around eight million SEK and employs around 2,300 employees across 10 countries. Billerud is run according to a matrix management strategy, with three business areas and four factories.

Business need:
Billerud performed most of its operational reporting and group consolidation in Microsoft Excel. There were many practical drawbacks to this approach, and the legal and operational reporting systems existed in two separate environments. The company needed a single, modern and professional solution for consolidation and reporting. Billerud also wanted to create its extensive quarterly reports on a monthly basis.

Solution:
Billerud created a reporting system called BLOCS, which now handles all operational and legal reporting. To provide a single platform for reporting, the existing consolidation solution was replaced with IBM® Cognos® Controller software. To increase the variety of reports that the system was capable of producing and offer more advanced reporting capability, the company also purchased IBM Cognos Business Intelligence and IBM Cognos Analysis for Microsoft Excel.

Benefits:
Billerud has achieved all of its business goals, as its consolidation and reporting processes have now been combined. Thanks to more accurate reporting and a more user-friendly online matching process, Billerud has saved a lot of time on internal reconciliations. Users can see what their counterparts at different factories have reported, and can correct any discrepancies immediately.

Case Study

Publicly traded company Billerud produces paper and materials for the packaging industry. The company has a long history, but the modern Billerud was created following the merger of two of Assi Domän’s and one of Stora Enso’s paper factories. The company has a turnover of around eight million SEK and employs around 2,300 employees across 10 countries. Billerud is run according to a matrix management strategy, with three business areas and four factories.

Challenge
Before the current project began, the company’s head office handled only legal reporting matters, with help from a consolidation solution and a legal reporting bundle linked to Microsoft Excel. Yearly budget reports were also managed with Excel.

By contrast, from an operational perspective, each of the company’s factories compiled individual operational reports together with budgets and forecasts. This process was done in Excel, as was the consolidation of these operational reports. However, the storage of operational information in Excel spreadsheets led to security concerns within the company.

There were many disadvantages to Billerud’s existing approach to reporting. The legal and operational reporting software existed in two separate environments, despite the fact that the basic information was, in many respects, the same. This meant there were many different versions of the truth, and differences between the two environments that were not supposed to exist.

Billerud needed a consolidated, modern solution for its legal and operational consolidation and reporting.

The goal: one system, one truth
In the summer of 2007, the BLOCS project (Billerud’s Legal and Operative Consolidation System) was initiated. The goal was to create one central system for both legal and operational reporting, which would provide a single version of the truth. Because to a certain extent the master data of both systems was the same, Billerud recognised the possibility of streamlining the reporting process and ensuring the quality of information with automatic cross-checking. In this way, Billerud aimed to increase visibility and decrease dependence on human processing. By adopting a single central reporting system, the company also wanted to encourage a more standardised way of working.

Billerud also wanted to increase the frequency of its financial reporting to a monthly model, in order to avoid the peaks caused by quarterly reporting and gain the ability to resolve discrepancies more quickly.

Finally, Billerud wanted to create a solution to visualise and analyse information in multiple dimensions, especially from a business area and service area perspective, in accordance with the company’s matrix organisational structure.

A powerful business intelligence solution
The Billerud team implemented IBM Cognos Controller software, connected to a SQL database mediated by a Citrix terminal. The solution is hosted on a single server which users can connect to. Today, Billerud’s employees work on one shared database in a centralised environment. Updates and changes to the data occur in one place, and need not be distributed out to other users, so they can dedicate themselves to the task of reporting.

No local installation of client software was required. Some users work on the local network, while others – for example, the sales office in Shanghai – are connected via a password-protected remote server. Temporary users can get access to the system via a code which is sent to their mobile phone.

To extend the analytical power of the system and provide more advanced reporting, the company purchased IBM Cognos Business Intelligence and Cognos Analysis for Microsoft Excel.

The decision to adopt the IBM Cognos software was made for a number of reasons. First and foremost, it satisfied Billerud’s basic needs. It was also important for the mid-sized company to be perceived as a reliable supplier, and the professional reputation of IBM aligned well with this goal. System development took place in Sweden, and therefore the system conforms to Swedish accounting regulations. In addition, IBM brought with it the industry experience and a broad product portfolio that helped to ensure the success of the project.

Getting there
Step one was to migrate the legal reporting system from the legacy consolidation solution to IBM Cognos Controller. All historical data since 2001 (when the company was founded) was transferred over to the new system, and the legal structure of the business was retained.

More rules for account processing were added so that the extensive quarterly reports could be created monthly. Despite the resulting increase in reporting, the migration went more smoothly than expected. Because IBM Cognos Controller has the same basic logic as the legacy consolidation solution, users found it easy to make the switch, and the set of reports that the new system produces was familiar to them.

Because IBM Cognos Controller is a web application, many people can be connected at the same time and see the same information. Through the Citrix remote desktop solution, the head office can support and guide users online, which made the process much easier in the implementation phase.

During the autumn of 2007 and the yearly closing process, the company’s reports were run in parallel by both the old system and the new Cognos solution, but in January 2008, the legacy consolidation solution was phased out.

In the summer of 2008 it was time for the second step – operational reporting – which was a tougher challenge. A completely new set of reports had to be created with increased levels of detail, and it was important that data on the company’s products was handled correctly. Historical data from December 2007 onwards would be fed into the new group management system, and new reports would be developed.

At the same time, the financial crisis struck with full force and the group found itself caught in the middle during that autumn’s budgeting exercise. Reporting was to be done in parallel in the old and new systems throughout the autumn, which carried with it extra work. As a publically traded company, it was especially important to assign roles and access rights, deciding who would have access to what data. Finally, these challenges were resolved, and from January 2009, all legal and operational reporting occurred in BLOCS.

The first two steps towards the BLOCS implementation focused on preparing the legal and operational data to feed in to the centralised reporting system, while the third and final step was focused on the analysis that Billerud wanted to get out of the system.

The rollout went smoothly overall. The Swedish units were given one day’s training, while foreign workers simply had instructions emailed to them; nothing more than this was necessary.

Today, BLOCS has 35 users, divided among the three factories in Sweden and one in England, nine sales offices across the whole world, and purchasing companies in Sweden, Lithuania, Latvia and Estonia, where its sister-company, Tenova Bioplastics, has its head office. The user base consists of accounting managers, CFOs, financial controllers and external accounting consultants.

The reporting flow has up to six reporting submission periods when legal information first arrives. After each period, the accounts are locked so that no figures can be changed afterwards. The head office gets a great deal of control over the process, as a view of the status of all reported units can be seen at all times. Only after this first step is complete does the consolidation process begin.

Using the IBM Cognos software, a management report is produced every month, which includes both legal and operational matters. The report contains all of the dimensions with clear summaries in the form of graphs and financial ratios showing cash flow, earnings, balances, products and staff levels. Reports can also be generated by factory or business area.

Results
Over the course of two years, Billerud has achieved all of its business goals. The reporting processes have been unified, with more accurate reporting and simpler online matching, and Billerud has saved a lot of time when it comes to the elimination of unsettled internal accounts. Users see what their counterparts have reported and can resolve any discrepancies immediately.

“Automatic reconciliation between the legal and operational reporting systems ensures the quality of the report data; likewise, the reporting workflow – in which figures are locked after entry – offers a more stringent way of working, with increased visibility and diminished dependence on manual processes,” says Karin Svensson, Group Controller at Billerud.

Looking to the future
With a modern platform for management of both legal and operational information, the goal for the immediate future is to coordinate BLOCS with the company’s other systems so that business area monitoring can be further developed. There are also plans to connect BLOCS to additional data sources.

More reports will be moved to the IBM Cognos platform, and Billerud also wants to educate users in analysis tools such as IBM Cognos Analysis for Microsoft Excel in order to increase its use at factory level.

About IBM Business Analytics
IBM Business Analytics software delivers actionable insights decision-makers need to achieve better business performance. IBM offers a comprehensive, unified portfolio of business intelligence, predictive and advanced analytics, financial performance and strategy management, governance, risk and compliance and analytic applications.

With IBM software, companies can spot trends, patterns and anomalies, compare “what if” scenarios, predict potential threats and opportunities, identify and manage key business risks and plan, budget and forecast resources. With these deep analytic capabilities our customers around the world can better understand, anticipate and shape business outcomes.

For more information
For further information or to reach a representative please visit ibm.com/analytics.

Request a call
To request a call or to ask a question, go to ibm.com/business-analytics/contactus. An IBM representative will respond to your inquiry within two business days.

Products and services used

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

Software:
Cognos Controller, Cognos Business Intelligence, Cognos Analysis for Microsoft Excel

Legal Information

© Copyright IBM Corporation 2012 IBM Svenska AB 164 92 Stockholm Sweden Produced in Sweden February 2012 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 www.ibm.com/legal/copytrade.shtml. Microsoft, Windows and Windows NT are trademarks of Microsoft Corporation in the United States, other countries, or both. Other company, product or service names may be trademarks, or service marks of others. 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.