Steinhoff Asia Pacific

Enabling Steinhoff to focus on implementing company strategies, rather than planning for them

Steinhoff Asia Pacific operates a number of furniture and lifestyle stores in Australia, including Freedom, Snooze, Bay Leather Republic and Andersons Furniture.

The company is a subsidiary of South Africa-based Steinhoff International Group.

Challenge

In the past, Steinhoff’s budgets were completed centrally by its finance team, but the company wanted business managers to be more directly responsible.

“We wanted ownership of the numbers to be with the relevant managers to make them accountable for their targets and responsible for their results,” says Louise Cooper, Group Accounting Manager, Steinhoff.

To support this approach, Steinhoff required a new budgeting, forecasting and planning solution that could collect a wide range of operational and financial data.

The system had to include advanced business rules (including franchise calculations) that the company could apply when developing planning scenarios.

Other considerations included the transparency of calculations and the ability to consolidate data so that it reflects both company and brand results. Steinhoff also wanted to minimise the learning curve for managers.

The Cortell solution

Cortell developed a system using the Cognos TM1 Financial Performance Management solution, with templates constructed in Microsoft Excel. Steinhoff can now deploy models within Excel but still retain traceable, central business rules.

Any adjustments to the templates can than on every template. As a result, the company has achieved significant time savings as staff no longer need to work on multiple templates to ensure they add and consolidate correctly.

Greater transparency

Much of the intelligence at Steinhoff sits with a number of key personnel, but the Cognos TM1 system has made business rules more transparent across the organisation.

Staff simply right-click on a figure and its rule is easily audited in plain English – it’s calculated as it’s written.

This ease of use has enabled Steinhoff to cut its planning cycle from four months to four weeks.

“The model is simple and can be easily adapted when we add more stores to our plans,” says Cooper. “The level of expertise to drive Cognos TM1 is a lot less than other planning applications I’ve used and I can make my own changes without having to call IT.”

Easier forecasting

In the past, when Steinhoff’s budget cycle took months to complete, the company gave little thought to forecasting. However, the Cognos solution was developed so that Steinhoff can use data from the budget scenarios and apply it to forecasts.

Business rules pull in the actual data and pre-populate the revised forecast (using the previous month’s plan), allowing managers to simply update the values based on events or changes for that period.

The company can now complete regular monthly or ad hoc forecasts with minimal effort.

“Ultimately the Cognos TM1 application has enabled Steinhoff to focus on implementing company strategies, rather than planning for them,” says Cooper.