The AEG Power Solutions Group is a global provider of power electronic systems and solutions for industrial energy supplies. The company offers a comprehensive product and service portfolio in the area of power conversion and power controlling, and employs around 1,650 people in more than 17 subsidiaries worldwide.
Clever Planning, Budgeting, and Forecasting
Headquartered in Zwanenburg (Netherlands), AEG Power Solutions Group is the sole subsidiary of the holding company 3W Power S.A., and follows a long-term corporate growth strategy. An important foundation for this strategy is up-to-date, precise, and meaningful information concerning the financial status of the Group and group-wide performance levels. This data is now managed via the SAP BusinessObjects Planning and Consolidation application, which was recently implemented as the central platform for the Group’s financial planning, budgeting and forecasting, consolidated analytics, and standardized group reporting.
“We now have a clear overview of all financial data and company performance, because the new IT solution enabled us to align our budget planning with the consolidation processes and group reporting,” explains Roger de Vries, Group Accounting Manager at AEG Power Solutions. In other words, the financial data recorded decentrally in the global subsidiaries flows immediately to central controlling, which then consolidates that data, manages it consistently, and prepares it for reporting purposes.
Based on the detailed analysis reports generated from these figures, the management team can then make well-founded strategic investment decisions and help steer the company’s growth in a forward-looking manner.
Preliminary Reports Possible in Flash Format
The spectrum of evaluations and reports is extensive. It ranges from analyses of changes in order backlog for each subsidiary, product line, and strategic business unit, to analyses of variable and fixed costs according to origin and function for each product line. Plus, there are reports on profit and loss accounts and balance sheets, and analyses of sales from the order backlog.
Management can use preliminary reports in Flash format to get at-a-glance information about orders, revenue, and company results, including the expenditures for research and development and management fees. Finally, actual-planned comparisons and forecast comparisons provide a detailed picture of whether revenue, profit margins, and company results are developing as expected.
A centralized and integrated planning and consolidation platform offers not only strategic benefits, but operational benefits as well. For example, the IT can support, standardize, and thus noticeably streamline all group consolidation processes. “Our reconciliation process used to be very time-consuming, as it involved sending around e-mails with Excel files and follow-up telephone calls; this is now passé. Now we can complete all of our tasks in two days instead of a week or more,” notes de Vries.
Consolidation in Two Days
This is all possible because the IT solution enables related subsidiaries to compare and validate internal account balances, such as assets and liabilities, practically in real time when reconciling intercompany accounts. It automatically calculates eliminations between consolidated companies, differences in currency conversions, and default values for budgeting according to predefined business rules.
Customized access profiles and automated background processes ensure that each subsidiary can only access the financial data of their respective partner companies. The solution also checks the plausibility and validity of financial figures upon their entry in the system, which increases the data quality.
There are currently around 30 users in 25 related Group affiliates and five key users in the central offices in Amsterdam and Paris. They all appreciate the benefits of this user-friendly, integrated solution: On the one hand, they work entirely on the trusted Microsoft Excel-based user interfaces when entering planning data, writing the reports, or doing the reporting.
IT Costs Must Go Down
On the other hand, the key users can easily customize the predefined entry screens, layouts, and dashboards for group reporting to meet individual requirements, all on their own and without much effort. If required, they can also configure validations, load processes, and even business rules such as for currency conversions, transfer postings, or balances carried forward.
“Because the expert users can now do these tasks themselves, this relieves our consulting and IT budget, which ultimately lowers running IT costs over the long term,” explains de Vries. The key users received all necessary training very early on in the project from consultants at the Group’s implementation partner ORBIS.
More Efficient Budget Process for 50 Cost Elements
As a next step, the Group intends to connect the newly-implemented SAP application for budgeting and consolidation with the existing SAP NetWeaver BusinessWarehouse solution. The goal is to make its financial planning – which is carried out for each product line, on the profit and loss accounts, and on nearly 50 cost elements – even more efficient. As a result, central controllers will be in a position to cross-check the figures entered decentrally by planning staff directly against budget allowances, and immediately identify and correct any discrepancies.