What was MRE looking to improve that led you to implement IBM Planning Analytics?
MRE UK was looking for a solution that would increase the speed and consistency of its financial planning and reporting functions, offer faster reporting and lower risk of data loss.
The energy sector deals in long-term projects with large-scale investments, and payback periods are typically measured in decades and years, not days and months. To steer its operations effectively, MRE UK has to maintain tight control over its budgets—and for many years, the company has used monthly profit and loss (P&L) and cashflow forecasts to accurately measure performance.
MRE UK relied on separate spreadsheet models for each of its generating stations as well as its Landfill Gas business, which its financial controllers prepared at the beginning of the month. This increased the risk of losing historical data if its spreadsheets were accidently deleted.
Through their Biomass Business, MRE UK own and operate a portfolio of five biomass fueled power stations based in the United Kingdom, with a total net installed capacity of 111 MW. Through their Landfill Gas Business, they own and operate methane-powered electricity generation assets at 23 landfill sites across the United Kingdom, representing 59 MW of installed capacity. Monthly forecasting is a valuable tool in the financial management of the business’.
“Our month-end process isn’t just a case of reporting our results against an annual budget – we report our monthly figures and re-forecast every single month. Accuracy is a key objective, and we are always looking to enhance the consistency and accuracy when forecasting earnings before interest, tax, depreciation and amortization [EBITDA] and cashflow.”
And what did you do?
We selected a financial performance management solution based on IBM Planning Analytics—an integrated, automated platform for planning, budgeting, forecasting and analysis that offers all the functionality of spreadsheets while eliminating the need for manual tasks.
“Of all the solutions we considered, we felt that IBM Planning Analytics was most comprehensive in its coverage of our financial processes. We were keen to automate as many of our planning processes as we could, and IBM Planning Analytics offered us the capabilities we were looking for.”
To help accelerate its deployment, we engaged IBM Gold Business Partner Aramar. Working together with Aramar, we implemented IBM Planning Analytics to deliver driver-based planning for P&L with automated cash flow and balance sheet reporting across monthly forecasts, budgets and the group’s long-term plan.
Did you get the improvements you expected?
Yes. Today, MRE UK uses IBM Planning Analytics to produce all its management accounts, forecasts and budgets—from the group level down to individual assets. By replacing its spreadsheet models with a central, enterprise-class platform, the company has increased the speed and consistency of its reporting.
In the past some of the monthly forecasting relied on time -consuming manual processes. This meant that when it came to the end of the year, a record needed to be made of all the costs which needed to be taken over into the next year’s spreadsheet.
Now we use IBM Planning Analytics, that’s all changed.
“We can now easily move costs into the next year, which helps ensure that all known costs are captured”.
The monthly forecasting process is also significantly faster and budget contributors can now complete their plans rapidly. And because the process is streamlined and accelerated, MRE UK can start their forecasts an entire week earlier in the month, which helps them to meet their reporting deadlines.
By building a single, consistent source of financial reporting data, MRE UK is opening up the possibility to perform what-if analyses that would previously have been time consuming and open to spreadsheet errors.
“During a recent annual budgeting exercise, we completed half a dozen what-if scenarios in just two hours—something that would have taken an entire day to complete before. Simpler, ad hoc requests are often faster still, and we can complete some requests in minutes.”
What was it like working with Aramar?
Working with Aramar to deploy IBM Planning Analytics has had a significant impact on the financial reporting capabilities of the MRE UK. The IBM solution delivers consistent and accurate forecasts across the group, even when significant changes are made to the underlying business drivers.
“Aramar really took the time to understand how our business works, and that perspective certainly contributed to creating a solution that met our specific operational needs.”
One of the key successes of MRE UK’s project was adopting Aramar’s train and mentor approach. Although training a team of five—rather than a single superuser—added some time to the start of the project, it reduced the company’s reliance on a single subject-matter expert and helped to minimize risk. By building its IBM Planning Analytics knowledge as a team, MRE UK can now resolve the majority of technical questions without external support
“We were incredibly impressed by Aramar’s commitment to create a solution that could pass P&L data into cash reporting and balance sheet in a seamless way so quickly”
What‘s next for MRE UK?
We are now developing a new culture of analytics throughout the finance team—and we see great potential to use IBM Planning Analytics to improve more of our processes.