Published on 19-Apr-2013
"Whereas before we had to carry out many hours of complicated manual work, now the entire planning process is centralised, totally transparent and much more accurate than it used to be. This means the company benefits from additional flexibility." - Roland Muff, Project Manager, KIBAG Group
Construction / Architecture / Engineering
BA - Business Analytics, Business Integration, Business Performance Transformation, Business Process Management (BPM), BA - Performance Management
IBM Business Partner:
The KIBAG Group is a leading Swiss corporate group that specialises in building materials and construction. The group was established in 1926 following the merger of two gravel and excavation companies. Today, KIBAG operates 13 gravel quarries, 22 concrete plants, 14 construction firms and four recycling and disposal companies. In total, the group has around 1,500 employees, primarily in its three business divisions of building materials, construction services, and recycling and disposal.
The KIBAG Group’s outdated IT infrastructure meant that tasks such as consolidated accounting, budget planning and reporting were complex, inflexible and took too much time. The company needed a central information system to use for group consolidation, business analysis and planning purposes.
KIBAG implemented IBM® Cognos® Controller and IBM Cognos TM1®, and also installed a data warehouse as a central company database. The IBM solutions prepare company-wide financial data for consolidated accounting and budget planning, as well as for reports and analyses.
Reduces the time taken to complete the process of consolidated accounting from over ten days to just a few by automating manual procedures.
Provides greater transparency and more precise investment controlling with clear, largely automated budget planning process. Standardised reports and flexible analyses provide the information needed to make decisions at the touch of a button.
To read a German version of this case study, click here.
The KIBAG Group is a leading Swiss corporate group that specialises in building materials and construction. The group was established in 1926 following the merger of two gravel and excavation companies. Today, KIBAG operates 13 gravel quarries, 22 concrete plants, 14 construction firms and four recycling and disposal companies. In total, the group has around 1,500 employees, primarily in its three business divisions of building materials, construction services, and recycling and disposal. Other services include laboratory services in the field of building materials, machinery maintenance and repair, and the management of land and real estate.
Inflexible, manual processes
The KIBAG Group’s structure covers numerous subsidiaries and business divisions, and it has been steadily expanding its operations over the years. The group’s IT infrastructure, however, was lagging behind and could not cope efficiently with the increasing requirements placed on it by the business.
In particular, KIBAG’s controlling department was finding it increasingly difficult to perform group accounting and budget planning and create performance reports, as many of these processes were based on time-consuming, manual procedures.
“For consolidation purposes, the individual financial statements of the subsidiaries were printed out, transferred into an Excel sheet by hand and combined to create group accounts,” explains Martin Kühn, Head of Finance and Controlling at the KIBAG Group. “Manual postings and settlements between the companies made the process prone to error. Plus, the amount of work involved was huge: group accounting took up more than ten man days each quarter.”
It was a similar story with the company’s existing reporting and planning system: budget plans were drawn up manually using Microsoft Excel. It was incredibly difficult for the managers who were responsible for controlling, because the only way they could obtain key business performance indicators was to extract them from the company systems and analyse them manually.
As this information forms the basis for strategic business decisions, whether relating to investments or the cost-effective purchasing of construction and other materials, it was critical for KIBAG to find a way to accelerate and simplify these processes.
At the end of 2008, KIBAG decided to modernise its group-wide information infrastructure. Martin Kühn states, “We needed a central, reliable database, as well as new solutions for consolidation, budget planning, reporting and business analyses.”
The objectives were outlined clearly, as Martin Kühn explains: “We wanted to automate the group accounting process in order to minimise the amount of work and errors involved. We also wanted to simplify budget planning, speed it up and make it more transparent. Last but not least, we needed detailed reports and analyses to give us a clearer picture of our business.”
Choosing the right software
KIBAG was looking for a solution that could support its aims of simplifying budget planning and consolidating the group’s information systems. The company evaluated several software solutions, and chose to implement IBM Cognos TM1 for budget planning and reporting and IBM Cognos Controller for the consolidation task.
IBM Cognos TM1 for planning and reporting
Roland Muff, Project Manager at the KIBAG Group, explains the reasons behind the decision: “The in-memory OLAP technology of IBM Cognos TM1 ensures high performance, and enables various processes and calculations for planning, reporting and analysis to be configured individually. On the user end, the Excel-like look and feel was the major benefit. Last but not least, we were impressed by the wide-ranging experience and expertise of our implementation partner Serwise AG.”
Selecting and implementing IBM Cognos Controller
KIBAG decided to implement IBM Cognos Controller, as the software impressed the team with its functions for financial consolidation: it would fully automate the process of creating group accounts and financial statements.
Working together with an IBM consultant, the project team then developed a functional and technical concept for the group accounting process. All financial figures – sales, costs, assets and liabilities – needed to be linked to the new solution from the group’s existing “xpertline” accounting system. This would enable these figures to be used as a basis for consolidating the individual financial statements of group companies and combining them into group accounts.
“The technical planning and implementation were completed in under two months. That alone proves that the IBM consultants really did have expert knowledge,” says a satisfied Martin Kühn. “The collaboration was pleasant and productive.”
One thing was clear: the two new solutions needed to reside on a single central database. To this end, KIBAG worked together with Serwise AG to put a data warehouse in place, including interfaces for importing data from its legacy system. The project team then configured interfaces and codes to link the data warehouse to the two IBM solutions. Finally, the team modelled multi-dimensional data cubes for reports and analyses with IBM Cognos TM1.
Centralised information system
In the autumn of 2009, the 2010 budget was created using TM1; by the start of 2010 the new information system was ready for use. All of the group’s financial data now converges in the data warehouse and is fed into the IBM Cognos Controller and IBM Cognos TM1 databases directly via automatic interfaces. The data is collected automatically, prepared for analysis and made available for group accounting, budget planning and reporting purposes. Four employees in the central finance departments use IBM Cognos Controller to prepare the group accounts once per quarter. More than 30 users from the finance and controlling departments use IBM Cognos TM1 for budget planning or for reports and ad-hoc analyses.
Faster, more accurate reporting
With its new IBM solutions, KIBAG now has a company-wide, standardised information system, which centralises information gathering and reporting. This brings enormous advantages when it comes to the group accounts that are drawn up on a quarterly basis. Using IBM Cognos Controller, KIBAG has largely automated this process.
“Whereas group accounting used to take over ten man-days, it is now done much faster,” notes Martin Kühn. “Automation and standardisation have reduced both the amount of time required and the risk of errors occurring.”
The solution even performs complicated calculations automatically, such as those needed for cash flow statements. Furthermore, various key indicators such as liquidity, networking capital, debt-equity ratio or equipment intensity are available immediately and can be presented in reports. This enables KIBAG to meet its legal reporting obligations without any major effort. In addition, IBM Cognos Controller provides management, as well as the supervisory board and company owners, with an easy-to-understand overview of the balance sheet and the financial situation of the group as a whole.
Information at the touch of a button
In addition to optimising the group accounting process, IBM Cognos TM1 also offers considerable improvements in terms of budget planning and reporting. The solution enables the annual budget plan to be drawn up quickly in a central application. Employees can then define investments and forecast costs and production volumes for the annual budget in a targeted manner. The overall plan can be divided into individual sub-plans (such as sales, HR or production plans) at the touch of a button.
With the help of variance analyses and target-actual comparisons, the controlling department can also check that the budget is being adhered to at any time using monthly, quarterly and annual financial statements. If it identifies deviations from the planned budget in certain sub-plans – for example, in the investments being made – it can adapt the budget and integrate it into the overall plan with just a few clicks.
“Whereas before we had to carry out many hours of complicated manual work, now the entire planning process is centralised, totally transparent and much more accurate than it used to be,” says Roland Muff. “This means the company benefits from additional flexibility.”
Detailed insights into daily business
IBM Cognos TM1 also increases transparency in daily operations. Specific key indicators are saved in the form of standardised reports. Controllers can update these reports at the touch of a button and make them available to the subsidiaries to use in managing their operations.
Managers or divisional heads can also navigate through the reports and answer specific questions, such as: how high are the average prices of concrete per region or type? What is the purchase price of gravel? What do the orders on hand look like for construction on a particular date? How are investments developing compared to operational cash flow? How high are costs per company, region or area of operation?
Thanks to its in-memory OLAP technology, IBM Cognos TM1 provides the required analyses practically in real time and thus helps senior management to make more informed business decisions every day.
Martin Kühn concludes, “The central information system has not just speeded up information gathering and eliminated the risk of errors occurring, it also gives managers and divisional heads the information they need on a daily basis, thus improving the performance of the entire company.”
The Serwise Group is an international business consultancy firm with offices in Winterthur and Dusseldorf. Serwise Ltd. has been operating successfully in Switzerland for the last 15 years, and the independent Serwise Deutschland GmbH began operating at the beginning of 2009.
The group employs more than 20 people and specialises in managing projects that require financial expertise coupled with a sound understanding of IT implementations. Serwise offers consultancy services ranging from strategy development, guidance on organisational structures and processes, and optimisation of controlling and accounting, all the way through to the evaluation, implementation, customisation and development of software solutions.
To learn more about products, services and solutions from Serwise, please visit www.serwise.com
About IBM Business Analytics
IBM Business Analytics software delivers data-driven insights that help organisations work smarter and outperform their peers. This comprehensive portfolio includes solutions for business intelligence, predictive analytics and decision management, performance management, and risk management.
Business Analytics solutions enable companies to identify and visualise trends and patterns in areas, such as customer analytics, that can have a profound effect on business performance. They can compare scenarios, anticipate potential threats and opportunities, better plan, budget and forecast resources, balance risks against expected returns and work to meet regulatory requirements. By making analytics widely available, organisations can align tactical and strategic decision-making to achieve business goals.
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Products and services used
© Copyright IBM Corporation 2013. IBM Deutschland GmbH, 71137 Ehningen, Deutschland. ibm.com/de. IBM Österreich, Obere Donaustrasse 95, 1020 Wien. ibm.com/at. IBM Schweiz, Vulkanstrasse 106, 8010 Zürich. ibm.com/ch. Produced in Germany. April 2013. IBM, the IBM logo, ibm.com, Cognos and TM1 are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the web at: www.ibm.com/legal/copytrade.shtml. IBM and Serwise are separate companies and each is responsible for its own products. Neither IBM nor Serwise makes any warranties, express or implied, concerning the other’s products. Microsoft, Windows, Windows NT, and the Windows logo are trademarks of Microsoft Corporation in the United States, other countries, or both. This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. The client examples cited are presented for illustrative purposes only. Actual performance results may vary depending on specific configurations and operating conditions. It is the user’s responsibility to evaluate and verify the operation of any other products or programs with IBM products and programs. THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided.