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Simplifying
Multi-Company Consolidation
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Solution
VISIBILITY
Advanced Multi-Entity Management
Solution Benefits
By taking advantage of VISIBILITY Multi-Entity
functionality the customer was able to:
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Act proactively both from within each business
entity, and across the enterprise based on the key
performance indicators suggested by each division
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Effectively define and manage business activities
between entities
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Deliver consolidated financial information on demand
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Customer Background
A Visibility client, located in the United Kingdom with
annual revenues of $50M, manufactures antennae for the
mobile telecommunications industry. The company is unique in
its ability to provide solutions on a global basis to
satisfy the wireless network infrastructure needs of the
cellular, telecommunications and broadcast markets
throughout the world. They were founded in the early 1970s
and have grown steadily, acquiring offices in Europe,
Africa, the United States, the Middle East and the Far East. |
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Key Challenges
The client must actively meet the changing demands of the
continually evolving broadcasting and telecommunications
industries while offering the most practical solutions. For
example, they developed a range of low environmental impact
wind efficient structures, covering roof mounts in urban
cities, to lattice towers and monopoles in the deserts of
the Middle East.
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Lengthy financial reporting
cycle at month end Poor analysis of departmental
performance
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No departmental accountability
or awareness of targets
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Business system unable to cope
with diversity and breadth of the business
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Detailed Challenges
The business
consists of a number of distinct areas of activity including
overseas sales operations, two project based business units
(large and small antennae projects) and a manufacturing
operation.
Prior to the implementation of VISIBILITY, the company could
only monitor business performance on a project-by-project
basis. This was a time-consuming process making month end
reporting slow and inadequate.
At the same time, the management of the company wanted to
make each of its divisions accountable and entirely
responsible for its own profitability. This would give the
division sales operations the freedom to purchase
manufactured assemblies from sub-contractors if a better
price could be obtained, and the manufacturing operation the
ability to work for third parties to maximize utilization of
their resources. The objectives were to maximize overall
profitability, ensure full utilization of resources,
introduce an element of competition into the company and
allow the divisions to focus on their core competencies.
With their existing information system, analysis of
divisional performance was impossible; therefore, management
reporting to support the new structure could not be
provided.
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Solution Details
Multi-Entity (ME) capability was used to provide a
framework to represent the new divisional organization
within the business system. With each division now being
represented as an entity in VISIBILITY, the ME functionality
gave them the ability to:
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Centralize the engineering
database in order to share common engineering data
across divisions
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Centralize (common to all
divisions) the general ledger coding structure so that
each division can use the same general ledger codes and
report their results in exactly the same way
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Centralize sales analysis codes
in order to provide common sales analysis reporting
across all divisions
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De-centralize (by division)
financial postings for each division providing the
ability to report profitability for each division
individually
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De-centralize operational data
providing divisional segregation of each division’s
inventory, purchase orders, sales orders and works
orders. Each division has a clear, un-cluttered view of
inventory data and order books.
Inter-Entity trading – Operationally, internal
divisions are able to trade with other divisions as trading
partners. Using ME capabilities, they can process these
inter-division transactions quickly and with minimal
overhead. The overseas sales division is able to raise
purchase orders on the project-delivery divisions for the
purchase of the design, build and installation of antennae
projects. VISIBILITY automatically converts these purchase
orders to sales orders within the appropriate division and
the appropriate financial transactions are created upon
shipment of the completed items. The divisions can trade as
a stand-alone business, each responsible for its own
profitability.
Financial consolidation of financial data – Business
Intelligence for Finance, a plug and play portal, is used to
provide a consolidated view for the overall company. With
the ME reporting option, the company’s management team is
able to see up-to-date financial performance by division, or
on a mouse-click, a consolidated view. The ME structure
makes it easy to provide side-by-side analysis of each
division’s performance using common analysis codes. With the
flexibility provided by the Finance cube, instant
re-configuration of the standard reports is possible
providing on-line analysis and answering ad-hoc queries.
The multi-entity business structure flexibility has resulted
in the company’s ability to act proactively based on the key
performance indicators suggested by each division. This
flexible view has made it easier for the company to focus on
business strategy and face the demands of their constant
evolving industry. This totally new view of the business
components has promoted a sense of competitive advantage. |
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