Magasin du Nord increases planning efficiency by 20 percent

Adding business value to the budgeting and forecasting process with Kapacity and IBM

Published on 23-May-2012

Validated on 12 Nov 2013

"Working with TM1, there are no surprises, and there’s no getting lost in the numbers – we have total clarity on our position at all times." - Peter Fabricius, Finance Director, Magasin du Nord

Customer:
Magasin du Nord

Industry:
Retail

Deployment country:
Denmark

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

IBM Business Partner:
Kapacity

Overview

Magasin du Nord is the largest department store in Denmark, employing around 1,600 people (1,000 FTEs). The company trades from six outlets across the country and also operates an online ecommerce website. It is owned by the Debenhams Group.

Business need:
Magasin du Nord had increased planning efficiency by 50 percent when it moved from a spreadsheet-based process to IBM® Cognos® Planning software. The company wanted to build on the success of this project and enable analysts to gain valuable business insights.

Solution:
Magasin du Nord engaged IBM Business Partner Kapacity to implement IBM Cognos TM1® and connect the software to its business intelligence application.

Results:
Increases planning efficiency by a further 20 percent.

Benefits:
Provides a single solution for analysing data from multiple sources. Frees analysts from data collection and number-crunching, giving them more time to gain valuable new insights.

Case Study

To read a Danish-language version of this case study, click here.

Magasin du Nord is the largest department store in Denmark, employing around 1,600 people (1,000 FTEs). The company trades from six outlets across the country and also operates an online ecommerce website. It is owned by the Debenhams Group.

Getting twice the speed of spreadsheets
In the past, Magasin du Nord used spreadsheets to support its annual budgeting process, but several years ago, the company switched to IBM Cognos Planning to streamline the process.

As Peter Fabricius, Finance Director at Magasin du Nord, explains: “True business value comes from understanding the details, and spreadsheets are not designed offer businesses the necessary level of visibility. By implementing IBM Cognos Planning, we were immediately able to complete our budgeting processes 50 percent faster than we could with our legacy spreadsheet application, and we gained insights that added real value to our business.”

Magasin du Nord used IBM Cognos Planning to automatically generate sales targets for each of its department stores. These targets are based on the financial data of the preceding year, and are drilled down to the level of individual stores, departments and sales managers. Using data from days in previous years as a basis for its analysis, the company is able to predict increased consumer demand and adjust staffing levels accordingly to ensure an optimal balance between salaries and profit margin.

However, due to the enormous complexity of modelling the huge quantities of operational data that Magasin du Nord generates every day, these analyses needed to be performed via lengthy batch processes – making it difficult to get real-time insight or perform what-if analyses.

Adding greater value
With software solutions for planning continually improving, the company saw an opportunity to further increase the efficiency of its finance function.

“As experienced users of IBM Cognos software, we were already familiar with the benefits of improved transparency, efficiency and visibility that a professional business analytics solution could deliver,” says Peter Fabricius. “We wanted to build on the achievements of our existing IBM solution, and further streamline our planning process.”

Magasin du Nord wanted to augment the efficiency of its forecasting and budgeting to enable its analysts to spend more time analysing the data – adding additional value to the planning process. To achieve this, the company needed to find a suitable successor to its IBM Cognos Planning software.

Choosing the right solution
When IBM Cognos TM1 was introduced into the marketplace, Magasin du Nord’s IBM Advanced level Business Partner and external IT support provider Kapacity realised the positive impact it could have on Magasin du Nord’s business.

“Kapacity informed us about Cognos TM1, and invited us to a demonstration,” says Peter Fabricius. “We immediately recognised the potential business value of TM1, and engaged Kapacity to perform the installation.”

Working together with a local IBM team, Kapacity integrated IBM Cognos TM1 with Magasin du Nord’s existing business intelligence software.

“We’d worked with Kapacity on a previous upgrade project, so we knew that they were an excellent partner,” says Peter Fabricius. “The Kapacity team really took ownership of the process, and invested the time and effort required to ensure that the implementation was completed successfully.”

Boosting planning efficiency by 20 percent
Using IBM Cognos TM1, Magasin du Nord has achieved its goal of increasing the efficiency of its planning process.

“Owing to Kapacity’s excellent work, we’ve simplified the planning process even more,” says Peter Fabricius. “Because there’s no separation between the front- and back-ends of the new solution, financial data is available for processing in almost real time. Thanks to the new solution, we estimate that we’ve increased the efficiency of our financial planning by another 20 percent – freeing our analysts to find ways to get more business value out of our analytics data.”

In the past, the process of managing the company’s financial data was complex. Today, Magasin du Nord is able to collect and consolidate data not only from its transactional and financial systems, but also from other sources such as spreadsheets, and analyse it on multiple dimensions in IBM Cognos TM1. The final output is transferred to the company’s business intelligence systems, which package the data into daily reports.

Total clarity with TM1
“In some other companies, there’s a tendency to treat budgeting as a big annual event – a headache that has to be suffered, but can be ignored for the rest of the year. But for us, financial planning isn’t an annual chore – it’s a daily effort to add value to the business,” says Peter Fabricius. “Although our planning is a complex process, TM1 makes it easy to interact with and gives our analysts a simple way to view and drill down into data – helping us get the insights we need more quickly.”

Magasin du Nord remains confident that it made the right decision in choosing its new Cognos solution. “TM1 takes the stress out of all aspects of the budgeting process,” concludes Peter Fabricius. “With the new solution, we’ve achieved our aim of building a simpler, more secure planning process. TM1 has streamlined the planning workflow, helping us to increase the business value of the process and spend more time on quality control.

“Working with TM1, there are no surprises, and there’s no getting lost in the numbers – we have total clarity on our position at all times.”

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/business-analytics

Products and services used

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

Software:
Cognos TM1

Legal Information

© Copyright IBM Corporation 2012 IBM Danmark ApS Nymøllevej 91 2800 Kgs. Lyngby Denmark Produced in Denmark May 2012 IBM, the IBM logo, ibm.com, Cognos, and TM1 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. 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.