Although the European market remains the priority for the Selena Group, the company strengthens its own global position at the same time. Currently, the holding operates 30 companies in 18 countries all over the world, including as far away as Brazil, Korea or China. The dynamic development of product offer and the expansion to foreign markets is one of the main strategic objectives of the Selena Group.
Many IT solutions are applied at Selena, mainly due to the evolutionary nature of the Group and fast pace of development resulting from the acquisition of new entities that used different systems.In addition, the scale of business – and thus – the number of business operations and their complexity was rather small, which encouraged selecting simplified and more cost-effective IT solutions at the local entities and applying different ERP systems.
The Selena FM SA company is a superior unit within the Selena Group. In the Wrocław office there, financial results of particular entities from all over the world are gathered and analysed; development plans are created and strategic decisions are made.
Distributed company structure, both organizationally and geographically, extended information flow chains (business processes may comprise several countries and entities), as well as a huge number of data necessary for tracing the financial effectiveness all are a run-of-the-mill situation for the financial and controlling departments of the international corporate groups. The same occurs at Selena.Within such a structure, an efficient data warehouse and system for managerial information management is a basic tool in the workshop of financial analytics and managers responsible for the current company management and development.
All companies in SAP BI
In order to efficiently collect and manage the financial data from all Group’s entities, and to ensure their smooth distribution, Selena’s management board decided to implement the SAP BI solutions. In this project, BCC (snow All for One Poland) was the implementation partner.
SAP BI is a system that allows consolidation for the needs of stock exchange reporting and the analysis of the sales and financial results of the group. In addition to the presentation of the financial results and sales reporting, SAP BI system offers solutions that support the simplified margin management and the effective cost analysis in the entire capital group. Owing to the simultaneous optimization of the infrastructure in the headquarters in Wrocław and in the key foreign companies, the system provides an access to the online data that enables the management of the company from any place in the world.
The implementation project was divided into three stages at Selena. In the first place, in June 2010, the tools for sales reporting were implemented and launched. At the end of the same year, controlling functionalities were launched.
The consolidation of the group financial results and the stock exchange report for investors for the first quarter 2011 were performed partially in the consolidation module of SAP SEM-BCS data warehouse.
First of all – consistent reporting data
SAP BW data warehouse standardizes the rules for data storing and the interface for reporting in the entire Group. The system identifies, integrates and analyses the business data coming from different sources, including different IT systems (also ERP). This is essential because the system landscape in the Selena Group is very diverse.The consolidation process of ERP systems used in Selena was started in 2009.
The number of systems from which the SAP BW will collect data is significant; despite the fact that since the beginning of this year the firm has introduced a single consistent platform for five companies, it has still different data sources. Currently, the Group uses among others Impuls, Axapt, and 1C.
Before the data from so many different sources gets to the warehouse and can be aggregated and used for the consolidation of the financial results, it needs to be assigned a uniform structure and format.In order to achieve that, following a detailed analysis, the management board of the Group decided to implement tools for a uniform presentation of data for the entire Group, after the recommendation of the IT department. This application has both systematized the way of data reporting by the trading and manufacturing companies and has become the main source of data for SAP BW warehouse.
The tool prepared internally by Selena organized, among others, such dimensions as: chart of accounts, cost centers, business units and product groups. It was a joint work of finance, controlling and sales departments. The integration between the monthly and quarterly reported data for the needs of the stock exchange consolidation was introduced. Due to the size of the Group and a large number of data sources, the implementation of this tool proved to be a big challenge, but with the support of the board management the implementation went smoothly.
SAP BI replaced the reporting system that had been used earlier at Selena. Apart from the limited capabilities of data processing, also other shortcomings of the previous tool were identified. Generating subsequent reports each time required to engage the persons from the IT department which extended the time of reaching the analysis and significantly increased the costs of processing. Also, there was neither clear distribution nor access to data policy. The reporting system was based mainly on the reports prepared by means of MS Excel, therefore creating a new data presentation was often too time-consuming or even impossible.
Better control, better security
At the strengths of SAP solutions are the functionalities facilitating the establishment of a clear authorization and data distribution system. Therefore, data security and access control were significantly improved at Selena. It is worth noting that the system enables the users to use only this information to which they are authorized to. The authorizations are defined at the level of cost centers, company and product group (e.g. polyurethane foams, adhesives, tapes and foils).
The authorization system made it possible to significantly decrease the number of reports used in the company. For example, one profit and loss account report that is common for all companies is used in the Group.
Currently, the Group headquarters uses the data warehouse to the greatest extent, but particular reports are used in the companies’ finance and sales departments. On account of the established authorization policy, the users, using the same report, see only the data (e.g. referring to the results of the selected company) they need to perform tasks related to their business duties. This guarantees that all employees use the same, current data. Also, the distribution and change management is easier. Data authorization administration has been maximally simplified and is now performed by means of literally one button.
Support of the development, improvement of the effectiveness
The implementation of SAP BI system has improved the reporting capabilities of the company. It is easier to access the data, while the analysis that in the past were more labour-consuming are now executed in a faster way. This project is the base for establishing one, universal source of data for the company that shall be used by its many departments.The implementation of this system was undoubtedly a step in a right direction, but we are at the beginning of the road to achieve all goals that we want to achieve. This system will surely support the development and expansion of the Group, it also optimizes the effectiveness of the processes at the Selena Group.
Kazimierz Przełomski, Vice President, Selena FM SA
Sales reporting
As it has been mentioned before, as part of Business Intelligence project, solutions were worked out that facilitate the unification of sales result reporting and controlling at the level of headquarters.
The current data on the volume and value of sales, margin and execution of the budget are the basic managerial information. The tools for sales reporting in SAP BI enable Selena to report the performance (on the basis of the sales data), budget and forecast data. The data is provided to the system every week on account of the prepared application for data import. The company has reliable information on sales volume, with reference to both the particular product groups and the division into the domestic markets.
In a capital group where production, trading and intermediary companies operate participating in the distribution chain, the calculation of the real product margin achieved by the Group is a big challenge. In Selena, the currently consolidated average margin including the intermediary margins in the internal settlements, is also easily available in SAP BI.
The view into the price deviation possible in the system that is the comparison of the actual sales prices from the invoices with the price lists imported into the system makes it possible to trace information e.g. on the size of the granted rebates, and to correct the results in consideration of the differences in currency exchange rates.
As a global company operating on many markets and settling with counterparties and customers in many currencies, Selena needed an efficient tool for the presentation of financial data that would not only cope with currency conversions, but would be able to take the exchange rate volatility into account.
BCC worked out a solution in SAP BI, which by taking into account the selected exchange rates (e.g. daily rate, the average exchange rate from a month, budget exchange rate) makes it possible to report in any currency, regardless of the local currency. Currently, it is possible to automatically convert the results of, for example, a Russian company and to present them in rubles, euros, dollars or zlotys in accordance with the selected exchange rate.
Such a solution makes it possible to summarize the results for different companies through their conversion into one currency. Therefore, it is possible to analyse the sales results consistently and to analyse the execution of the budget in an easier way. The deviations in the execution of the budget are calculated on account of the comparison of the actual data (taking into consideration the changes of currency exchange rates) with the budget data, planned according to the specified exchange rate.
This tool also facilitates the analysis of the influence of the currency exchange rates sensitivity on the operating income of the Group.
SEM-BCS (Strategic Enterprise Management – Business Consolidation System) is one of available tools offered by SAP for meeting reporting requirements in a systemic way set out by the law for companies with decentralized legal structure. In addition to BCS, SAP offers also such products as BPC (BusinessObjects Planning and Consolidation) and FC (BusinessObjects Financial Consolidation).However, in this group, BCS holds a special position due to close integration of this tool with SAP ECC, which stands for the consideration of consolidation requirements already within the same business processes (e.g. depreciation postings or intracompany sales).Such penetration of consolidation requirements through the business processes allows of gaining a high level of automation of consolidated statements’ preparation.
In particular, the benefits from the implementation of such a solution make it possible for analysts to focus their time and energy on the appropriate analysis of data instead of focusing on the technical aspects of work (focusing on the preparation of data) As a result, decision processes are optimized.
However, the integration with SAP ECC is not the only strength of SEM-BCS. It is worth mentioning that the system is also ready to process the data not originating from SAP systems. Quite often some data is prepared from non-SAP source systems. Then, not only ready templates for manual entry of data or in a form of a file are available in BCS, but also methods for validation of this data already during its import, that is checking its correctness with regard to the content (balancing the account balances or more complex rules of data validation).
In a further stage of data processing, that is at the level of executing the so called consolidation tasks (such as currency conversion or elimination of intracompany transactions), BCS is distinguished by the fact that the significant part of its functionality is already provided by SAP and does not require any complicated development works. Additionally, since the data is stored in the structures of SAP BW data warehouse, it is possible for the analysts to create the reports themselves , without the necessity to engage the developers.
Controlling in SAP BI
Creating the tools for handling the controlling processes, it was decided to apply a simple controlling model comparing the actual data with the budget data and the forecast.
The balance sheet data and result data (balance sheet, profit and loss account divided into CC) are reported in the system. The data may be reported divided into product groups and particular companies.
Previous reporting tools were based on MS Excel files and they did not enable users to access the financial data in the required sections easily and quickly.
The comparison of the actual data with the budget (of course taking into consideration the differences in currency exchange rates) makes it possible to calculate the deviation and keep the budget real on a current basis.
Additionally, apart from the actual data, the information on the intracompany settlements is imported to the system. The evaluation of these results allows to carry out a simple consolidation for internal managerial needs. This allows to generate a profit and loss account report both divided into companies and for the entire capital group.
With reference to the controlling tools, the biggest challenge for the Group was to systematize the report dimensions (that is the product groups, accounting account, cost centers). Currently, a tool for consistent reporting developed by Selena’s IT department in collaboration with the controlling and finance department is used for this purpose.
As part of the project, a mechanism for the financial forecast of the profit and loss account was implemented. Three variants of forecasting are possible, depending on the type of information that is forecast:
- Sales: Comparison of the actual data for the given period (e.g. the first quarter of the settlement period, the first half-year) with the budget assumptions facilitates making the budgets real and forecasting the results for next periods.It is possible at the level of particular companies, product groups and distribution channels.
- Sales costs: Calculated on the basis of planned sales values decreased by an average margin achieved in the previous months.
- Other costs (e.g. remuneration costs): Forecast costs for the given month are calculated on the basis of average costs for the previous months.
Such forecasting provides the means for making the budgets real almost in an online mode. As part of the project, BCC consultants prepared also a set of reports, allowing of tracing the results and verifying the plans on a current basis.
For the needs of investors and stock exchange
Not only is SAP BI system used for managerial purposes within the organization, but it is also usedcfor providing the status information for shareholders and external entities.As part of the last stage of the project, SAP SEM-BCS tools were implemented, facilitating the consolidation of the Group’s financial results and preparation of the stock exchange reports according to the law regulations and WSE requirements.
The biggest challenge referring to the implementation of the consolidation module lied in providing consistent data compliant with the reports from the previous periods when the consolidation was carried out without the support of the state-of-the-art solutions. The next difficult process was the preparation of a uniform tool which is the source of the consolidation data. The tool was integrated with the controlling package.
The usage of SAP SEM-BCS tool made it possible to automate the consolidation processes and to verify the unit data errors of the companies prior to the start of consolidation tasks.
New directions
The Selena Group develops organically and through acquisition of subsequent companies, which allows the group to consistently increase their share in the global markets.Only over the last four years, the Group was joined by companies from Turkey, Russia and Spain .At the beginning of 2012, the production in the new plant in China was launched.In the next years, the equally dynamic development and acquisition of new markets is planned.
SAP BW system allows to analyze the managerial information in different dimensions; through the warehouse capabilities, virtually unlimited possibilities of data presentation were provided. Having reliable, comparable and online accessible information on the financial results and forecasts, it is possible to analyse the companies’ results on particular markets and to make decisions from there on directions of further expansion.