Financial Performance Management

IBM Cognos TM1 Streamlines Finance Activities at Rayonier

July 30, 2017 by Lisa Minneci Leave a Comment

IBM Cognos TM1 streamlines finance activities for our client, Rayonier, when they transitioned from traditional, spreadsheet-based financial planning and reporting processes. But the company also realized some unexpected benefits of using TM1.

Rayonier is a real estate investment trust (REIT) and one of the largest private landowners in the U.S. The company owns, leases or manages approximately 2.7 million acres of timberlands in the U.S. South, U.S. Pacific Northwest and New Zealand, supplying timber to a wide variety of markets, including pulp, paper, lumber, renewable energy production and other wood products.

In 2014 the company spun off its manufacturing business, which marked a perfect opportunity for the finance group to consolidate the multiple budgeting, planning and reporting systems it had acquired over many decades in business. The company also decided to overhaul its entire chart of accounts. These changes set the stage for the organization to move off of various systems and consolidate its financials onto TM1.

Today, Rayonier relies on TM1 for many different aspects of its financial planning and reporting processes. The company sees many benefits from using TM1, including:

Streamlined processes with faster and more efficient close processes
Greater visibility, increased participation and more ownership of numbers
Significant hard and soft financial savings

“We now have a much more streamlined process than before,” said Bill Tan, senior accounting manager, Rayonier. “We’re no longer maintaining multiple systems. We estimate we’ve reduced our close process by 15%.”

It’s the soft financial savings that are the unexpected benefits of using IBM Cognos TM1. Moving off of multiple systems onto one universal solution has significantly reduced the amount of training new employees need to go through. “Activities that used to take several days can now be done in less than a day,” said Tan. “We have much more visibility, and we’ve pushed planning down to more individuals. People are now much closer to the process. And overall, people are much more productive.”

Another key benefit of moving to TM1 was that, according to Keith Tucker, senior accountant at Rayonier, “retiring legacy systems saved licensing costs and server costs.”

Read the full case study on how Rayonier is using TM1 for financial planning and reporting.

IBM Cognos TM1 for Capacity Planning in Manufacturing

June 28, 2017 by Dan Bernatchez Leave a Comment

We recently blogged about capacity planning in the oil & gas industry using IBM Cognos TM1. In short, by using TM1 for capacity planning, a business can better understand how to maximize the capacity it has on hand, how to plan for expected increases and decreases in supply and demand, and how to capitalize on market opportunities to increase physical capacity at the most optimal times.

One of our clients, one of the nation’s largest manufacturers of roofing materials, with nearly 30 plants and a large variety of products created from different materials, wanted to optimize and create efficiencies for the products it manufacturers. They specifically wanted a capacity planning model that incorporates each plant, the multiple lines each plant runs, the products per line and per hour, and the shifts in the plant, and the length of those shifts.

With TM1, the manufacturer can now reallocate back in time if the data reports that a plant’s capacity has been exceeded. It can also report if a plant is currently exceeding capacity, or if a plant is performing under capacity. The capacity planning model provides red flags when it sees plants underperforming, enabling management to make decisions around whether they need to add additional shifts to those lines, or to move manufacturing of a specific product to a different plant.

Read about capacity planning in the manufacturing industry.

Using IBM Cognos TM1 for Capacity Planning in the Oil & Gas Industry

June 20, 2017 by Dan Bernatchez Leave a Comment

Capacity planning is the process of determining the production capacity needed by an organization to meet changing demands for its products. Most people think of IBM Cognos TM1 and automatically think just of financial planning. They think of how organizations of all types and kinds use TM1 for budgeting, planning, reporting and various other office of finance activities. But as we have learned in our decades of experience in working with TM1, there are many other ways companies can use TM1.

Just one of these ways is capacity planning. In short, by using TM1 for capacity planning, a business can better understand how to maximize the capacity it has on hand, how to plan for expected increases and decreases in supply and demand, and how to capitalize on market opportunities to increase physical capacity at the most optimal times.

One of our clients who needed a capacity planning solution is in the oil & gas industry. We built a solution for them that uses TM1 for operational performance management data on their storage of oil and gas. The company has contracts with its customers to store petroleum products to be transported. By having greater visibility into its tank utilization, the company can both be more efficient, and be more proactive by driving more revenue when there is spare capacity available.

Read about capacity planning in the oil & gas industry.

IBM Cognos TM1 for Demand Planning in Manufacturing

June 14, 2017 by Dan Bernatchez Leave a Comment

Demand planning can guide businesses to improve the accuracy of revenue forecasts, align inventory levels with peaks and troughs in demand, and enhance profitability for a given channel or product. Many of our clients who rely on IBM Cognos TM1 for financial planning, reporting and analysis have asked us to help them design and develop TM1-based demand planning applications.

We recently blogged about two examples of using IBM Cognos TM1 for demand planning. One was demand planning in the food and beverage industry and the other was in professional services. Another client of who asked us to use TM1 for demand planning is a roofing materials company in the manufacturing industry.

They tasked us with creating a solution that would deliver comprehensive functionality for operational planning and analysis to help them optimize and create efficiencies for the products it manufactures and the associated shipping costs and resources required to get the products to the customers.

One aspect of this system is a volume and demand planning model that collects and analyzes data by product, by region and by customer. This gives the business the visibility needed to make decisions based on what to manufacture and where to manufacture it.

IBM Cognos TM1 for Demand Planning in Professional Services

June 8, 2017 by Dan Bernatchez Leave a Comment

We recently shared a use case on how a client is using IBM Cognos TM1 for demand planning in the food and beverage industry. We also have a client in professional services who is using TM1 for demand planning. They are a market-leading business support solutions and services company that serves the majority of the top 100 global communication service providers.

Like most professional services firms, they make their money based on the number of billable hours its consultants service its clients. After we worked with them to build an IBM Cognos TM1-based financial planning and reporting application, they asked us if we could help us with demand planning, which would need to integrate with the overall financial planning application.

We built a demand planning application that enables the team to analyze demand by role, project, geography and status. Now, with this TM1-based demand planning application, the company’s line of business managers and senior executives can optimize staffing resources to better serve their clients.

IBM Cognos TM1 for Demand Planning in the Food and Beverage Industry

June 1, 2017 by Dan Bernatchez Leave a Comment

Here’s an example of how we used TM1 for demand planning in the food and beverage industry. In particular, we built this application for a craft brewery.

On one hand, what could be more fun than performing demand planning for the craft beer and cider industry? On the other hand, what could be more challenging? Beer distribution is not a simple model. Instead, the brewer distributes its products to a wholesaler, who sells the products to a retailer (a store, bar or restaurant). This particular brewer has an added complexity in that they issue their products with a “sell by” date, meaning any product remaining with the retailer or wholesaler after the “sell by” date needs to be returned to the brewer.

We worked with this craft brewer to design and develop a demand and sales planning solution using IBM Cognos TM1 integrated with IBM Cognos BI. We developed specific cubes that enable the brewer to track and analyze distribution, sales, depletions and returns by wholesaler. The system first tracks shipments to each wholesaler, then it records depletions (the products by wholesaler that have gone out to retail outlets). Lastly, the system tracks returns from the retailer to the wholesaler, and then back to the brewer.

Now, the brewer can make strategic decisions on where to invest marketing and sales support by wholesaler, identify top performers and develop strategies to keep them there.

Ovum: “Majority of CFOs aren’t happy with quality of financial planning and analysis”

May 10, 2017 by Brian Combs Leave a Comment

According to an Ovum report, a “majority of CFOs aren’t happy with the quality of financial planning and analysis and are looking for ways to make finance a more ‘inclusive’ and ‘insightful’ function.” And while the report discusses why traditional planning processes are broken and why certain trends gaining traction in analytics are set to disrupt these entrenched practices, it is not all doom and gloom about the office of finance and its practices.

In fact, in “Breaking the Barriers to Financial Planning with Exploratory Analytics,” Ovum declares that there’s an “ongoing evolution in data analytics infrastructure, processes, and techniques [that] has created a perfect storm that is disrupting the way the office of finance thinks about (and engages in) enterprise performance management.” The report also goes on to say that its analysts believe that “financial planning and analysis (FP&A) will be one of the first areas to be on the path to transformation with the emergence and adoption of cloud and exploratory analytics—that will not only help users explore new frontiers in performance management, but also make planning and analysis, ‘viral.’”

Here at Revelwood we think this report touches on a theme we’re seeing emerge quietly in several places. The theme that finance is starting to transform from just a mere accounting function, to one of equal business leadership, one that is the most advanced and well-versed in analytics, and one that is best positioned to be a disruptor in its organization. One that, if interested in rising to the challenge, can transform its organization.

The Role of Finance Reimagined: A Manifesto

April 12, 2017 by Brian Combs Leave a Comment

Our world is in the midst of a transformative technological revolution that is impacting every nation, industry, enterprise and human being on this planet. It is a revolution because it is radical and happening so fast. It is transformative because it is so pervasive and fundamentally changing the way we live.

We’re seeing changes in business and technology never before imagined. For example:

Ten years ago, the Internet of Things (IoT) consisted of approximately 500 million connected devices. Today that number is 9 billion. At the end of this decade that number is projected to be 50 billion. And, not long after that? One trillion.
Self-driving cars are no longer a dream. They’re real and very close to becoming the standard. Did you ever consider Google a car company? It is projected that the soon-to-arrive proliferation of self-driving cars will increase the capacity of our roads and highways by a factor of 10-15 times. Imagine the impact on safety, quality of life… even real estate prices.
Crowdfunding means that institutional investors are no longer needed to fund startups. In fact, you can now validate new products without even creating them yet.
The largest hotel company in the world—Airbnb—doesn’t own a single hotel room. It has disrupted the business model by reducing both the cost of demand and supply to next-to-nothing.
50% of all business ground transportation costs in the U.S. are paid to Uber. And, it doesn’t own a single vehicle.
Jeff Immelt, CEO of GE, said in a recent interview with McKinsey and Company, “We can’t be an industrial company anymore. We need to be more like Oracle. We need to be more like Microsoft.”

Given these changes—and those to come—what role must the Office of Finance play as organizations change? How can it best support corporate strategy and operational effectiveness? How can Finance be viewed as a strategic partner to the business in its quest to disrupt itself and transform organizational behavior?

We explore how the Office of Finance is changing in our Manifesto. We invite you to download it, consider how your organization is changing, and how the Office of Finance needs to transform to facilitate that change.

Consider what Charles Darwin told us, “It is not the strongest or the most intelligent who will survive but those who can best manage change.” Does your Office of Finance have a strategy for managing today’s—and tomorrow’s—changes?

IBM Cognos TM1 Streamlines Finance Activities at Rayonier

Read more about how IBM Cognos TM1 is used by REITs:

IBM Cognos TM1 for Capacity Planning in the REIT Industry