Access to clean water is essential for the survival and growth of humans, animals and crops. Water technology companies worldwide provide innovative solutions to supply, conserve and protect water throughout the highly complex and technical water cycle of collection, treatment, distribution, reuse and disposal.
After a series of international acquisitions, a leading water technology company formed an Assessment Services division to provide water infrastructure services to their customers. Through the formation of this group, the Assessment Services division discovered multiple enterprise resource planning instances and payroll systems, a lack of standard reporting, and siloed budgeting and forecasting processes residing within a labyrinth of spreadsheets. It was chaotic.
These redundant manual processes slowed the organization and resulted in inaccuracies and lack of clarity around what data could be trusted enough to use. Internal and external stakeholders of the publicly traded company felt the impact via late and misguided profit and loss forecasts. As a result, the new department was under heavy pressure to produce timely and accurate financial reports and projections for stakeholders. They were also expected to improve and deliver upon earning targets.
How IBM and ActionKPI improved financial reporting and streamlined operations
The Assessment Services division turned to ActionKPI and IBM to help solve their massive data problems. First, the partnership developed an integrated business planning roadmap, including a comprehensive strategy to address data and organizational challenges. Once the partnership completed that work, IBM, ActionKPI and the Assessments Services team kicked off the first phase of their three-phase project.
The water company first needed to standardize its monthly financials and management reporting for the solution to work. This work involved creating a single set of definitions and procedures for collecting and reporting financial data. The water company also needed to develop reporting for a data warehouse, financial data integration and operations.
Once the partnership established a data warehouse, the water company had a central repository for the organization’s data. They could store financial data from every business unit and create reports showing the organization’s financial performance from those various business units.
The next step of this phase was to create a system for integrating financial data from different sources and automating financial operations, making it possible to collect and report financial data more quickly and accurately.
Phase One resulted in standardized financial definitions, procedures and reports, as well as a data warehouse and a system that allowed the organization to improve its financial reporting and make better decisions.
Phase Two focused on standardizing their budgeting and forecasting process, moving from a complicated, interwoven one-hundred-and-forty-tab Excel model into IBM Planning Analytics. Part of this process involved refining and creating new strategies to align with the CFO’s vision and to establish a monthly rolling forecast process owned by the business.
The partnership created several models to transition Excel business logic and calculations to IBM Planning Analytics. These models included employee-level workforce planning, high-level project forecasting and the organization’s driver-based and line-item detailed operating expenses, all integrated directly into the P&L to provide real-time forecast updates.
With the forecast model established, the next step was to integrate financial and payroll data into the forecasting model from the data warehouse. The partnership set up the data integration to update actuals from ERP to Datawarehouse to IBM Planning Analytics in near real time and on demand, which is critical for month-end reporting deadlines. This integration enabled the water technology company to reduce month-end reporting cycles, free up time to conduct better analysis and provide a well-thought-out forecast to the business, all within essential reporting timelines.
By centralizing actuals, budget and forecasting information in Planning Analytics, finance business partners could analyze the business faster, allowing the company to make decisions mid-month and influence month-end results (instead of just reporting results without any actionable recommendations) and moving decision making from hindsight to foresight.
As the finance teams began providing information analysis and insights, the whole organization started to see the value of their investment. Hitting this project goal was an essential milestone, and the momentum began to build and prepare the organization for the next phase.
Outcomes of this phase included a higher degree of transparency and forecast accuracy. In addition, they moved from being the last division to submit budgets and forecast results to corporate to the first.
Phase Three of the project involved transitioning core sales, operational processes and weekly forecast reporting from Excel to IBM Planning Analytics.
The new system required integrating data from multiple sources, such as Salesforce, ERP, Workday and Excel spreadsheets. In addition, a change management strategy was implemented to ensure everyone involved in the project was on board with the transformations.
Using IBM Planning Analytics and Cognos® Analytics, the team transformed the core workings of the Assessment Services division, bringing a sense of order and a single source of truth to multiple departments throughout the organization.
The Vice President of the water services company reports, “Integrated Business Planning has allowed us to dive in and signal risk … resulting in proactive action plans that steer our bottom line. We no longer debate who has the right information, because we operate on a single source of truth, instilling trust in our process and underlying data.”
Better decision-making through increased transparency and trust in data
The partnership’s resulting technology and process optimization improved forecast accuracy and reduced the time to forecast from 4 months to 1 week. Decision makers can now consider the potential risk and rewards of different options to make choices with the best chance of achieving their desired business outcome. Greater transparency and trust in data provide a central project management solution for project forecasting and P&L Reporting.
This process optimization also produced the following significant results:
A deeper understanding of the financial performance of projects and their associated project managers
Transparent quarterly targets and forecasts for sales reps to achieve
An easier way to set client and forecast risk expectations at the corporate level
A better way to determine resource capacity, risk and revenue backlog
An efficient method to guide sales efforts and client negotiations based on capacity and insight into margin details
By combining integrated business planning with smarter analytics, the water technology company was able to operate more efficiently and unlock profit potential, all while protecting one of the world’s most precious resources.