Our client needed assistance with implementing an enterprise performance management (EPM) system on top of its SAP and production application systems. They were seeking the ability to:

1. Evaluate production costs and margins for different products and services provided.
2. Evaluate the efficiency of their production plants.
3. Evaluate and compare options during the price determination phase and make-or-buy decisions.

The client identified SAP Business Warehouse (BW) as the solution on which to develop their EPM system and requested that Protiviti deliver the pilot implementation before committing to the full implementation.

Protiviti organized an integrated team consisting of experts on EPM and business intelligence solutions, as well as a local partner skilled in SAP BW development.  After meeting with our client, the team developed an approach to:

1. Create an EPM implementation model that analyzed the criteria to be used to allocate costs and revenues on plants, products and clients.
2. Implement the model in SAP BW, with the consolidation of data generated by SAP Enterprise Resource Planning (ERP), production application systems and user-generated spreadsheets.

As a result of Protiviti’s assistance, the pilot implementation was delivered on time and provided management with meaningful and reliable data.

Following this, the company’s CEO launched several strategic initiatives to improve production efficiency and requested Protiviti implement the full EPM system. This process led to the following insights into their business. 

1. The discovery that outsourcing costs were about 2.5 times internal costs, in spite of the production managers’ belief they were closely aligned. The company is now working to define a more effective outsourcing strategy.
2. Internal production costs were almost half the cost production managers had estimated through a bottom-up model, which proved to be based on outdated data. The company has begun recovery actions on opportunities lost due to a higher price compared to competitors.
3. Some plants exhibited production costs higher than those of other plants. Production managers initiated further analysis to identify other inefficiencies.
4. Production volumes were not aligned to billed volumes, showing revenue assurance issues.

How We Help Companies Succeed

Protiviti helps finance organizations gain strategic insights into the enterprise through the design and implementation of leading-edge budgeting and planning practices; development and alignment of key metrics; and by providing strategies, processes and technology for continuously monitoring business performance and the effectiveness of governance.