Effective reporting in SAP: Help your CFO make more timely decisions and sharpen your company’s competitive edge

Help your CFO make more timely decisions and sharpen your company‘s competitive edge

Martin Smith and Andrew Marshall – ABB UK

© ABB Group October 25, 2010 | Slide 1


Agenda

Brief overview of ABB

ABB UK SAP Transition experience

ERP Landscape

Implementation process overview

Challenges

Tangible benefits

What does this mean for the CFO?

Critical success factors

What would we do differently?

Single item generating most improvement


Power and productivity for a better worldABB’s vision

As one of the world’s leading engineering companies, we help our customers to use electrical power efficiently, to increase industrial productivity and to lower environmental impact in a sustainable way.

www.abb.com


Introduction

Martin Smith

FI/CO System Architect, ABB UK

4 years with ABB

SAP Project Responsible for:

Roles and Authorisations,

SOX,

UAT

Andrew Marshall

General Manager, Shared Accounting Services, ABB UK

14 years with ABB

SAP Project Responsible for

Single sets of Master Data

Compliant and reconciled transition of legacy financials

Member of “One Simple ABB” concept team

© ABB Group October 25, 2010 | Slide 5© ABB Group October 25, 2010 | Slide 5

Power and automation are all around usYou will find ABB technology…

crossing oceans and on the sea bed,

orbiting the earth and working beneath it,

on the trains we ride and in the facilities that process our water,

in the fields that grow our crops and packing the food we eat,

in the plants that generate our power and in our homes, offices and factories


ABB UK and Ireland Overview

Part of ABB Group

>$32Bn Revenues

100 countries / 117,000 employees

12 main locations across the UK and Ireland

>5,000 Customers

2,200 employees

£650m revenue in 2009

Over 5,000 customers

Head offices: Daresbury and Dublin

Currently 2 shared service centres

Moving to 1 centre from Jan 2011

SAP in UK

BaaN in IE (current transition to SAP)


Some ABB Customers


ABB UK SAP Transition Experience


UK ERP Landscape – 2006

Supported Age IssuesLP PA DM PS PP Revs % of System

Oracle 32% 10 Yrs Totally unsupportedVax Mfg 10% 26 Yrs Bespoke (1 expert)JD Edwards 7% 10 Yrs Old AS400Agresso 8% 7 YrsSanderson Mfg 5% 4 Yrs UnstableBaan 32% 8 Yrs Old Version (4c4)Vixen 5% 16 Yrs Limited support

One Simple ABB Project

Revs %LP PA DM PS PP

SAP 100%

2006

2008


Ceridian

Ceridian

Ceridian

PWABaan

ExcelJD EdwardsOracle

GB ERP and F&A – Pre SAPFinance Operations HR Payroll

CeridianOracleVaxOpen Accs

ErnieExcelSanderson

PayritePWAVixen

CeridianAgressoComp SCOT

Open Uptime

AMF

Credica

ABACUS

EXCEL SPREADSHEET ACCOUNTING


GB ERP and F&A – To be

CeridianMySAP

Finance Operations HR Payroll

Comp SCOT

BASWARE

Credica

ABACUS


Implementation Process Overview

NOT Finance or IS lead project

Designed as business-wide project

Each business was stakeholder – full engagement

UK Management team (board) = STECO

Defined and dedicated team for UK

Plus business support teams

1:1 relationships with SAP consultants

Module by module

Ring-fenced project – entirely divorced from day to day operations

Series of “gates” and checkpoints at critical phases

Phased (separate business “types”) implementation over 9 months


Implementation Process Overview

This approach enabled

Business buy-in

Senior management involvement (STECO) gave project priority / gravitas it needed to succeed

SAP project as a “single function” (separate accounting/separate management) enabled critical FOCUS

Modular approach gave full, in depth understanding of each element at a module level

Downsides to this approach

Team pulled in different directions by own businesses

Inevitably added time to project

Modular focus reduced overview – increased “Silo” mentality

Made dependencies less visible


Breaking the spreadsheet culture

Building confidence in the SAP numbers

Despite the CFO having confidence, we probably spent the first 6 months after go live “proving” to businesses that the information in SAP was correct

Reducing the number of journals

We found that our Business Controllers were having to complete/correct the actions (or lack of them !) of the business

The wider business had to learn that our SAP isn’t just a finance system

Accounting during the month, not just at month end, in particular dealing with Results Analysis & Settlement errors

Challenges


Tangible Benefits

Single ERP system (from 7 disparate)

Significant improvement in availability, completeness and accuracy of first run numbers

Final reporting maintained at 5 days (group requirement) but…

Quality vastly improved

Availability of numbers much sooner

Belief in numbers significantly greater

Analysis/reconciliation time more available

Now believe 3 day reporting is a real possibility when required

Reduced costs

Shared Accounting Services 50% size of pre-SAP

50% reduction in Overdues

Better visibility of debt, improved debtor reporting etc


Tangible Benefits

Purchase order compliance

Vastly improved and standardised supply chain process

Helped increase PO coverage from about 50% (records difficult to obtain!!!)

To 100% compliant under SAP (fully measurable!)

Vast improvement in Matching rates

From about <20% (records difficult to obtain !!!)

To 65% and growing

Faster payment – now above industry average at 86% - 90% paid to terms

Reduced SOX controls from 800 to 300

Standardised

More easily defined, operated and tested

lower cost


What does this mean for the CFO

PRE SAPMultiple communications from various sources

Significant effort to achieve degree of confidence in numbers

Delayed finalisation of numbers

CFO forced to perform extra activity

POST SAPOne communication source directly from SAP

One version of the truth

Flash result achievable sooner direct from SAP

More time for CFO to review and analyse –instead of creating


Critical Success Factors

Business led approach

Dedicated team

We did not aim to “Save the World”

Being flexible to change approaches as SAP mist lifted


What would we do differently?

Despite vast improvements (eg)

Quicker, more visible, greater accuracy, consistency, reduced cost, more credible etc …

…the knowledge that we have gleaned whilst using SAP has prompted us to question why we did not “do more” (eg):

(Ironically) Better reporting

Order to Cash / Procure to Pay cycles well catered for

Further standardisation through more restricted practices

Less scope creep allowed during project


Single item generating most improvement

Steering Committee being represented by UK Board

Committed

Informed

Strong

Supportive


SAP Project in Summary

Providing

Right

Information

Delivering

Excellence
