Project: development of budgeting system based on Cognos EP solution Field:  retail sale of household appliances and electronics

About the company:
Rembittekhnika is the largest distributor of household appliances and electronics in the Urals region. The company is engaged in selling of a broad assortment of household appliances and electronics, its delivery to customers, guarantee and post-guarantee maintenance and repair. Having taken a leading rank in Chelyabinsk, the company is acting to expand in the region by setting up its branches in other towns of the Urals and West Siberia and by constantly improving the quality of its services; it seeks to enter new markets and develops new areas of activities.

Customer’s tasks:
The project started with identification of demands and expectations of managers concerning the implementation of new budgeting system. In the course of the talks and study of the accepted practice the key goals of the project had been formulated, as well as general idea of the system that would satisfy both senior management and functional managers.

At the start of the project, the operating regulations of budget planning in the company envisaged data collection in the form of electronic tables, thereupon converted by the Financial department into resulting budgets. It was a typical situation when a new period started with unapproved budget, with the total company budget represented by a set of MS Excel electronic tables, rather complicated for further consolidation. In addition, the heads of departments could not monitor budget execution in real time.
Current situation required searching for new instruments to support the budgeting process that would involve both the remote branches and departments of the headquaters. It was important for the heads of the departments and branches that the target indicators of their activity and input normals would be plainly and correctly calculated, that the procedure of budget formation would be transparent, the progress in achieving projected values could be monitored on-line, individual planning of budget items assigned to them could be performed, as well as an option to consider several plan versions instead of one would be available.

In addition, the information system selected had to be easily scalable in order to provide for real-time involvement of new branches and sales stores to the budgeting process.
One of the most important tasks was the support for real-time consolidation of plans, which had taken much time in the work of economical department and had been a source of permanent errors and disagreement between the Financial department and budget holders – the heads of responsibility centers.

Solution
A new information system was bound to solve the above-listed problems, since it combines both the possibility of budgeting methodology implementation and active involvement into the process of managers and company owners as main participants.
As an instrument for solving these tasks, Cognos EP product was chosen, which is delivered by Cognos corporation, a world leader in the field of Corporate Perfomance Management software.

The core of the system is represented by financial model of the company, which describes all essential, in budgeting terms, company’s objects: financial structure, performance indicators, classifiers and reference books. The model also includes all budget and report formats, procedures of indicators calculation, as well as interrelations between them.

The teams of Nevskaya Consulting Company and IBS were invited as consultants for the project implementation. The group of St.Petersburg’s experts took upon themselves the works concerning the development of financial model, implementation and training. The IBS’s consultants carried out technologic support of implementation.
Results The project duration was 3 months. During this time the joint team of company employees and consultants has developed and implemented the system by putting it to commercial operation.

Success and operational efficiency of implementation were insured by expert approach to conducting the project on the part of both consultants and the customer. The company’s readiness to changes and coordination of operations among consultants and the company’s specialists have made it possible to carry out prompt and organic modification of budget process.

By the efforts of joint team of consultants and Rembittekhnika’s specialists, the information financial model was implemented in Cognos EP environment in just nine weeks after the works had started, and the system was put out to beta testing.
The process of budget formation in the new system began immediately after the start of beta testing. The time remaining to the project termination was devoted to the development of procedures concerning the collection of budget indicators and to performing the corresponding adjustments of the real-time accounting system.
The information analysis system developed as the project output allowed the company to drastically reduce the time for budget preparation. It takes the company several days to collect data for a quarter budget. In the result, the specialists can pay much more attention to the analysis and working out of different variants when developing plans, thus leading eventually to more accurate planning and budget formation that would be in accord with actual life of the company.

The information system is in full conformity with the company’s financial structure and with wide variety of budget forms used in the course of budget preparation. New calculation procedures, which it was impossible to realize correctly dealing with electronic tables, were implemented in the system.

The heads of departments have an on-line opportunity to monitor the budget execution and to introduce corrections to current activities in due time.
The project implementation caused the company to change the methodology itself of budget planning, having made it oriented to the solutions, which the company managers have to take.

Other IBS’s projects concerning implementation of Cognos solutions:

• SUEK
• Jackpot
• Alina (Kazakhstan)
• Comstar
• Johnson & Johnson

Other projects of Nevskaya Consulting Company concerning implementation of Cognos solutions:

• Omsk Chemical Company

IBS is the leader of the Russian information technology and consulting market. The company offers ideas, mechanisms, infrastructure and resources for the growth and gain in their customers’ performance as implementation consequence of advanced managerial and information technologies.

Nevskaya Consulting Company is specialized in managerial consulting, including setting up of budget planning and monitoring systems, economical simulation, design and implementation of automated solutions for budgeting.