Budgeting and natural planning system for the Pig Production Division of Miratorg agroindustrial holding
RAMAX Group in partnership with SAP implemented a large-scale project for automation of financial activities of Miratorg agro-holding division.
- Creating a single platform for all the business units of the division for entering plans and budgets, storing and processing planning and reporting information.
- Annual and long-term planning of natural and financial performance indicators.
- Data consolidation automation.
- Developing a clear general methodology and common population of budget books (items).
- Support of versioning and multiple corrections of the annual plan for making proper management decisions, including planning and calculating mechanisms for various combinations of the production and logistics program and scenario conditions (currency exchange rates, deflator index and so on).
- Bottom-upwards planning (from indicators and needs to company targets, consolidated financial budget) and top-bottom planning (budgeting on the basis of targets and limitations set at the executive level).
- Unifying plans and budgets at different planning horizons and standardizing payment terms.
- Consistency of information about Division’s operations: the information used for several plans and budgets is entered once and at one place, and calculated for other forms (interbudgetary recalculation or copying).
- Defining the content of budget items using the single budget classifier for normalizing the reference books.
- Security of all plans at all levels of the budgetary and natural planning system.
- Minimization of entities (planning and budgetary forms, analytical characters and budget indicators, budget items); uniform aggregation of entities.
Budgeting and natural planning methodology for a Miratorg agro-holding division was exclusively developed according to the Customer’s stated business requirements and real needs.
The model for natural planning of livestock for pig complexes (as a result – ‘livestock turnover’) is unique and was prepared exclusively for this Customer.
The Customer’s specialists who are well aware of the business, operations, and needs of the Division actively participated in the development of the methodology.
The solution was implemented using the following products:
1 . SAP BPC Embedded software package including:
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SAP BPC (Business Planning and Consolidation) platform for planning and budgeting and BPF tool for customizing the processes of plan and budget data reconciliation (Business WorkFlow);
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HANA hardware and software complex as the data base and tool for In-Memory calculations and interbudgetary recalculations;
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SAP BW platform including BI-IP functionality for customization of planning functions and flows as well as uploading reference books for the single budget classifier;
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SAP Analysis for MS Excel reporting tool for the development of planning and budgetary forms in the planning interface chosen by the Customer (MS Excel).
2 . SAP Business Objects BI Platform for implementation of consolidating information panels and consolidated plan/actual reporting.
- The following units have been automated:
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Natural planning unit for feed requirement (grain and non-grain feed);
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Expenses unit with regards to fixed costs;
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Purchases unit;
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Investment unit;
Financial unit (including Tax Budget, Miscellaneous income and expenses, Cash revenue and spending budget, Credit and loan budget, income and expenses budget, direct and indirect Cash Flow Budget, Budgeted balance sheet).
- The single sign-on for all users of Pig Production Division and AIH Miratorg for entering and controlling the planning and budgeting has been created.
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The roles and permissions system has been customized.
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The total number of budgetary forms to be filled out for getting necessary financial budgets and budget balance sheet has been reduced (due to unification and the principle of minimization of entities).
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Data quality has been improved and the time for data reconciliation has been decreased due to customized algorithms for interbudgetary recalculation and minimization of human errors.
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The time required for annual planning and budgeting has been reduced from several months to several weeks.
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The quality of the already used Division’s reference data systems has been improved (reference books of commodities and materials, fixed assets, contracts, etc.).
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Bottom-upwards and top-bottom planning methods have been implemented resulting in significant quality improvements.
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What-if analysis has been implemented. For instance, by manipulating general reference data (currency exchange rate forecasts, deflator indices, price indices, contract payment terms, etc.), it is possible to get different versions of final finance budgets, compare them, and choose the best option for approval as the final one.
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Logging of each modification of each budget item made each operator better understand their responsibility and let the management investigate overstatements of budget sums, which is often necessary.