To set its business direction, Frasers Property requires insight into forecast costs, revenues and potential returns. It sought a fast, scalable solution to meet emerging business needs.
The company worked with Cornerstone to replace and enhance its existing forecasting platform, providing a detailed view of long-term revenue, cost and capital allocation across the business.
Enables20-year forecasts by supporting larger data sets and faster forecast refreshes
Enhancesscenario planning by factoring in market changes for smarter decision-making
Acceleratesovernight processing tasks, improving performance and maintainability
Business challenge story
The importance of forecasting
The property industry in Australia has seen heightened activity in recent times as the population of major cities like Sydney and Melbourne rises. As a cyclical business, Frasers Property aims to meet this demand with its award-winning apartments, houses, and industrial developments.
Andrew Brown, Project Manager at Frasers Property, begins: “Forecasting plays a central role in the success of our developments. For every development we embark on, we need to break down the likely costs, and the potential returns when we come to sell or rent our properties.
“Each mixed-use, masterplanned development can be highly complex, comprising land, houses and apartments as well as shopping centers. Our larger projects may take up to twenty years to complete – during which time, market conditions fluctuate. Different ownership types and funding arrangements also drive various accounting treatments, and commercial and industrial developments also have their complexities.
“Once we have dealt with the complexity at a project level, we need clear reporting of the financial view of our portfolio across the organization. This facilitates business decisions such as capital allocation to maximize return on investment.”
Previously, Frasers Property relied on an aging business planning system and spreadsheets for forecasting. As the performance of these tools began to dip, the company realized it needed a more scalable platform.
Sumeer Shoree, General Manager, IT, at Frasers Property Australia, explains: “Our existing forecasting systems were reaching the limits of their capacity. In some cases, we had to split individual projects across several models before we could run the forecasts, and processes were taking an increasingly long time to complete.
“Lengthy jobs such as calculating allocated costs, for example, were becoming a particular headache, and we struggled to add important new functionality. The time was right to start the search for a more stable, scalable tool.”
Laying the foundations for smarter forecasting
To accelerate its forecasting processes, Frasers Property decided to deploy IBM Planning Analytics software. The company worked with IBM Platinum Business Partner Cornerstone to implement the solution.
Andrew Brown elaborates on the selection process: “We conducted a thorough assessment of forecasting tools from several vendors, including running proof of concepts. Of the options we looked at, IBM Planning Analytics gave us the most confidence that it could meet our business needs and be delivered on time and within budget.
“We already had 200 users spread across Australia updating forecasts in the existing Cognos Planning system. The new IBM application delivered a like-for-like user interface that meant there was little need to invest in extra training, so our users could hit the ground running.”
The company manages many of its core business processes using a suite of SAP applications, including SAP ERP and SAP Customer Relationship Management. Cornerstone helped Frasers Property Australia integrate the new planning solution with the existing SAP application environment.
Sumeer Shoree continues: “IBM Planning Analytics utilizes in-memory analytics technology that gave us the confidence to extract more data from our core SAP applications for use in our planning processes. This in-memory capability also enabled us to add further automatic calculations to our models, and perform more detailed scenario planning.
“The level of integration with our SAP Customer Relationship Management solution is particularly pleasing. Formerly, the CRM system and the planning tool would generate slightly different sales forecasts, which made it difficult to be confident in the results. Now, we have a single source of truth that we can trust.”
Frasers Property has also moved its complex feasibility modeling for commercial and industrial developments from spreadsheets into IBM Planning Analytics. Sumeer Shoree adds: “The IBM platform is significantly more robust and scalable than our old approach, and adding new functions is much easier. As soon as we have more requirements, we’re confident the solution will cope.”
IBM Business Partner Cornerstone also added vital security to the new system, as Andrew Brown explains: “We have very complex security needs, and must ensure that only certain users have access to particular forecasts. Cornerstone engineered a very neat solution, so that only certified users can see certain data sets, with IBM Planning Analytics automatically managing the security setup.”
He adds: “Working with Cornerstone and IBM has been a highly rewarding experience. We have an excellent relationship with them, especially with the team at Cornerstone, who always go the extra mile for us. They understand the intricacies of our business model and have contributed to our ongoing success.”
Piers Wilson, Managing Director at Cornerstone, comments: “The project teams from both our organizations worked really well together, with the Cornerstone team comprised of consultants from offices across the Asia Pacific region working both on and off-shore during the engagement. We’ve delivered an elegant solution that was both within budget and on time.”
Gaining faster, deeper insights
With IBM Planning Analytics at the heart of its financial planning process, Frasers Property has gained significantly faster access to forecast data, along with deeper insights into project revenue and costs to keep development projects on track across Australia.
Sumeer Shoree comments: “Many of our forecasts are now completed more efficiently, allowing users to focus on analyzing forecast data. We have improved system availability as our end-of-year technical processes that used to take up to four days can now be completed in a matter of hours. Likewise, our overnight processes take 15 minutes, rather than three hours on our old system, and cost figures from our SAP systems are updated in just five minutes – more than 90 percent faster than before.”
IBM Planning Analytics is also helping Frasers Property gain a more accurate longer-term view of development costs and projected returns. Andrew Brown explains: “On our old platform, we could perform forecasts for five years on a month-by-month basis, then a further five years on a six-month cycle. With IBM Planning Analytics, we can now look ahead twice as long, for up to twenty years on a particular project.”
The IBM solution is also enhancing the company’s scenario modeling, enabling it to create and compare scenarios more efficiently.
Andrew Brown explains: “IBM Planning Analytics allows us to create multiple versions of a project forecast that factor in the different options available for the project’s future. This assists the decision-makers to evaluate various options by comparing their financial impact.”
Frasers Property draws together forecasts from across its entire business operations, providing a comprehensive picture of predicted business performance. “With the IBM solution, we can merge everything—our cost center forecasts, data on our investment property portfolio, and our residential and commercial developments—into consolidated balance sheets and profit and loss statements for the forecasted period.
“Our management team love having such an in-depth breakdown, and it provides crucial reassurance to our corporate investors that we are on the right path. Our company takes pride in its robust processes that deliver detailed forecasts for the entire business – and the capability provided by IBM Planning Analytics facilitates this.”
Previously, during the company’s quarterly re-forecasting process, merging forecast data from across the business operations required a process that lasted around 90 minutes. Now, with the IBM solution powering its financial consolidation, Frasers Property can review the figures in an instant, enabling further time savings.
Andrew Brown concludes: “Thanks to IBM and Cornerstone, we now have a robust financial planning platform that supports decision-making across our entire business.”
About Frasers Property Australia
Frasers Property Australia is one of Australia’s leading diversified property groups, and is the Australian division of Frasers Centrepoint Limited (FCL). The company has over 90 years’ heritage in Australia, and activities that cover the development of residential land, housing and apartments, commercial, retail and industrial properties, investment property ownership and management, and property management.
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Cornerstone Performance Management is an IBM Platinum Business Partner and a leading provider of performance management consultancy in Australia and Asia. Founded in 2007 and drawing on over 200 years of combined business experience, Cornerstone provides business management tools for strategic planning, budgeting, forecasting, and multi-dimensional analysis. For more information, please visit: cornerstone.com.au