This European open-access train operating company operates standard routes as well as buses to connect routes, has a network of over 50 stations in 48 cities, 116 connections a day, and employs over 14,000 people. This operator is a successful model for market liberalisation for other nations embarking on this route.
Our client needed to improve the visibility of its long-range plan so that investors could see returns on investment over the long term, in this case, 30 years. Clarity over expected revenue, costs, and profitability was needed to give investors visibility of forecast dividends over the 30-year long-range plan.
Annual planning and quarterly forecasting processes were heavily dependent on spreadsheets. Finance recognised that processes were taking too long, and were too difficult to manage. Production of P&L was disconnected from the Balance Sheet and Cash Flow reports, and too much time was being spent collecting data in multiple connected spreadsheet models and checking for errors across all processes.
Planning, budgeting, and forecasting were completed using a complex set of spreadsheet models that were becoming even more complex over time. The annual budget and plan were compiled via a bottom-up process. Finance extracted and prepared actuals from the previous year from ERP, as the basis for business units to compile plans and forecasts of revenue and cost for the next financial year, and to forecast on a quarterly basis. Data is collected from 20 business unit contributors in spreadsheets and was very unstructured. As a result, Finance spent too much time consolidating data into the central plan.
At the start of the annual budget process, 20 business units prepared a detailed three-month forecast plus nine months of data to complete the year. Data collection involved lots of re-iteration between business units and Finance, involving multiple submissions and reviews before plans were approved. This was difficult to manage in the absence of any formal workflow to control and manage the process.
Monthly reporting was time-consuming and inefficient in spreadsheets and the business wanted to automate this process and enable scenario analysis. Both objectives were too complicated for spreadsheets.
Profit& helped our client to replace spreadsheet applications for Budgeting, Long-Range Planning, Forecasting, and Finance Reporting with the Anaplan cloud-based solution. This included automated data integration with ERP, workflow to manage and control processes, and a single source of data for all planning and reporting. All of this resulted in greater efficiency, speed, and accuracy across all of these processes.
Automated Data Integration
Import of actual revenue, costs, and sales KPIs for the previous year or quarter was automated, eliminating the work of preparing actuals for the annual planning and quarterly forecasting processes.
Annual planning and quarterly forecasting are now managed and controlled by a Workflow Dashboard in Anaplan. The Workflow Dashboard provides a clear view of where they are in the process, which business unit plans have been submitted, are in review and approved, and at any point in time. Automatic reminders are issued that prompt planners to work on their part of the process, work that Planning and Control previously spent a lot of time doing manually.
Integrated P&L, Cash Flow & Balance Sheet Statements
Once plans and budgets are approved, this data automatically feeds the integrated P&L, Cash Flow, and Balance Sheet statements. Where these reports feed each other, the data is automatically updated without any manual intervention.
30-Year Long-Range Planning
After the consolidated P&L is completed, this is used to project another 4 years using one driver for revenue, and one driver for cost, to spread the annual figures across the months to create a 5-year plan by month. With 5 years in place, Finance can project the 5-year plan to create a final 30-year P&L, Cash Flow, and Balance Sheet by month. Having visibility into these financial statements over the long range determines cash in the bank to pay dividends over a longer term than was feasible using spreadsheets.
The business has streamlined Financial Planning and Analysis processes with automated data integration and workflow. A single source of data the has improved insight, accuracy, and reliability of reporting for shareholders. The ability to manage large datasets for performance management and long-range planning has delivered improved shareholder confidence in the business.
““The solution delivered by the Profit& team has dramatically transformed Finance processes. Our team can focus on managing the performance of our network, rather than worrying about spreadsheet errors and meeting reporting obligations.””Network Finance Manager
“Our ability to produce a reliable long-range plan based on reliable data has transformed our ability to set and manage shareholder expectations.”CFO