254 spreadsheets into one model
Ballance Agri-Nutrients is one of New Zealand’s leading fertiliser specialists, with manufacturing plants in Whangarei, Mount Maunganui and Invercargill.
The company owns New Zealand only ammonia-urea manufacturing plant at Kapuni in Taranaki; a farm nutrient company Altum, and agricultural aviation company, Super Air. Ballance also has majority ownership of a national animal feed company and a farm technology company.
Ballance is a farmer-owned co-operative with 700 employees and more than 18,000 shareholders. Ballance is one of New Zealand’s ‘Top 50′ businesses, and in 2012 company turnover exceeded $900 million.
Ballance Agri-Nutrients used to base its budgeting and forecasting on an Excel spreadsheet system. With 254 interconnected spreadsheets, this system was becoming increasingly unreliable, says Ballance Agri-Nutrients’ financial planning and analyst manager, Bruce Harris.“It gave us a result we really didn’t know the integrity of,” he says.
The company had rolled out an SAP ERP system in 2009, and the plan was to add a budgeting and forecasting module a bit further down the track. When that time came around, Ballance investigated SAP’s forecasting solution, BPC, and got as far as developing a comprehensive blueprint for the system. However, unable to reach an agreement on price with SAP and concerns over the maturity of their product, Harris decided to bring in Ernst & Young to review Ballance’s requirements. Ernst & Young came back with two options – BPC or TM1, says Harris, and that was when he got in touch with Mindfull.
“Mindfull came in very late in the process,” he says. “What swung us over were the user-friendliness of the TM1 product; the capability of it; and, more than anything, the people.”
The fact that Mindfull was New Zealand-based, and had a 10-year track record of implementations, was reassuring, he adds.
“Cortell gave us numerous reference sites here in New Zealand,” says Harris. “We took advantage of that and everywhere we went people couldn’t speak highly enough about the TM1 product.”
Simply put, the TM1 solution rolled all 254 spreadsheets into one model. “This model has given us a much more robust process,” Harris says. The solution consists of a number of modules, including HR; Sales; Inventory; Balance sheet; Profit and Loss; Cashflow; and Capex, with Inventory being the core component.
One of the top benefits of the solution is the integration with the SAP ERP system, Harris says. “We can take our demand forecast and production planning forecast directly out of that module.” We are now able to give a financial face to our S&OP process which significantly enhances the decision making on the businesses critical path
Integrity of the data is also high on the benefits list.
“We know that we have integrity of the data,” he says. “That’s one thing that you don’t get with spreadsheets.” In the past, there were always some doubts around the budget – that is not the case anymore, he says. The solution is also very user-friendly, he says. The system was initially rolled out to 45 managers to do their budget uploads. “They were cringing and thinking, ‘not another system that we don’t know how to use’,” Harris says. “But after the training, they were very complimentary of it.”
Another strong benefit is the ability to do reliable forecasting for the future. In the past, forecasting was haphazard, he says. “We’ve got the ability now to routinely forecast going forward by changing assumptions, such as changes in exchange rates and supplier prices. We just let it flow through and see what the impacts are.”
The new solution will also help save time. The yearly budget round usually takes six weeks end-to-end – Harris expects it will take around two weeks with the TM1 solution in place.
“Cortell has been amazing,” Harris says. “They are incredibly obliging people. Nothing is ever too much for them. Whatever we have asked for, they have delivered.”
Ballance is now about to embark on phase two of the project, which involves bringing two further companies onto the system. These Waikato-based companies will be able to remotely change their assumptions and drive their own budget processes, Harris says.
Integration with ERP system
IBM Cognos TM1
IBM Cognos Executive Viewer
Integrity of data
Easy to use
Reliable regular Financial Forecasting
Significantly shortened budgeting process
Support the Business S&OP process