One of the largest Caterpillar dealers in the world launched the budgeting and reporting system based on IBM Cognos TM1 and IBM Cognos BI. The implementation was supported by the specialists of Odyssey Consulting Group consulting company. "Vostochnaya Technica" is the largest Caterpillar dealer territory in the world: it has 29 branches in Russia, including the head office in Novosibirsk. Now the company employs about 900 people. "Vostochnaya Technica" actively develops the domestic market: the dealer also provides comprehensive services for rental, maintenance and repair of Caterpillar equipment.
Over the past few years, "Vostochnaya Technica" has been experiencing rapid growth, which is also reflected in the organization's IT strategy. The previous corporate planning and reporting system was not effective enough and the dealer's management decided to upgrade it with the help of IBM Cognos TM1 and IBM Cognos BI solutions. The project was partnered by Odyssey Consulting Group, an international consulting company. IBM Cognos product line implementation pursued several objectives. "Vostochnaya Technica" launched the new automated system in order to study in detail the data on its activities in different analytical sections, to increase the accuracy of business planning system and to simplify the preparation of corporate reports for the parent company. The planning and financial reporting system that the distributor had been using previously had become too heavy-handed and difficult to manage over the years. In addition, it did not take into account some of the local planning of the organization. The preparation of budgets was delayed and employees often did not comply with existing regulations.
The choice of the solution and the partner was not accidental: "Vostochnaya Technica" and Odyssey Consulting Group have been cooperating for more than 8 years in terms of automation projects.
Odyssey Consulting Group team once again proved that they are interested in us as a customer and are ready to organize project management under all our conditions. In addition, this international organization with subsidiaries in several countries proved to be a reliable partner on several occasions. Odyssey Consulting Group consultants speak English and prepare project documents in English, which is very important for us, said Roman Davydov, IT Manager, "Vostochnaya Technica"
The system is currently in commercial operation. Budgets are made for all the key areas of ""Vostochnaya Technica": sale of new and used machinery, sale of spare parts, rental services, repair and maintenance. "Vostochnaya Technica" uses the created solution to plan in detail the company's revenues, expenses and balance sheet.
We plan functional budgets for service and spare parts revenue for each individual piece of equipment based on predicted repairs, depending on the machine's current operating hours and operating conditions. The new system helps us to understand if the company meets its sales targets, if it is ready to provide profitability with the existing costs and vice versa, to monitor if our costs cover the current income of the company
Roman Davydov, IT manager, "Vostochnaya Technica"
The integrated management system based on IBM Cognos solutions has increased transparency and quality of planning process at"Vostochnaya Technica" company.
The employees of financial department track at what stage of budgeting the company is, what branches in what region have submitted budgets and what branches have notin the real time mode. According to the "Vostochnaya Technica" representatives, before IBM Cognos TM1 implementation the planning cycle was one month, now budget preparation takes not more than two weeks. The annual budget is reviewed every quarter, the five-year budget - annually. Nowadays about 80 people are involved in the planning cycle - basically they are employees of the financial subdivisions of the headquarters and regional branches.
The advantage of the new budgeting system is in the fact that now we know exactly how the annual income of our company will change depending on the sales volume in the current period of one or another machine model, availability of orders for spare parts, service maintenance contracts says Roman Davydov, IT Manager, "Vostochnaya Technica"
IBM Cognos BI ensures operational and accurate data collection about the company activities from different sources: ERP-system, payroll and personnel accounting system, Caterpillar systems for planning of machines sales, spare parts and services. All this data is fed into a repository based on MS SQL Server and converted into the required format. They form the basis for budgeting the company, performing plan-fact analysis, building consolidated financial statements (PnL, balance sheet), preparing various reports and multidimensional cubes for detailed analysis of distributor's income, expenses and balances. IBM Cognos BI also generates a number of internal reports regulated for Eastern Europe, which managers use for the operational analysis of the current situation.
Before the introduction of the automated system the financial department used to compare planned and actual indicators of the company only during the preparation of monthly reports. Now plan-fact analysis can be done on a daily basis, which noticeably increases the efficiency of budget execution control. Corporate financial statements are also submitted once a month, but thanks to the BI system the time required for their preparation has been cut in half.
The BI system has helped us solve several problems. First of all, we have reduced the time to prepare and check corporate reports. Previously this process took 10 days, now it takes only 5. Secondly, we have improved the quality of data in the accounting systems. Roman Davydov, IT manager, "Vostochnaya Technica" comments.
At the moment the company has already made three planning cycles in IBM Cognos TM1 and fully switched to the corporate reporting based on IBM Cognos BI. Now the project team of ""Vostochnaya Technica" and Odyssey Consulting Group is finalizing the integration of the solutions with the Caterpillar systems. In addition, the company plans to implement a new procurement planning system taking into account sales data and delivery conditions.
