CP Corporate Planning AG - Controlling, Controlling Software, Consolidation, Risk Management

Sinn GmbH & Co. KG

Controlling at Sinn GmbH & Co. KG

When Astronaut Reinhard Furrer took off for the first German Spacelab Mission D1 on the 30th October 1985 he had an automatic chronograph watch by Sinn Spezialuhren GmbH & Co KG on his left wrist. Up to that point, no other automatic timepiece was of good enough quality to display the correct time reliably in the weightlessness of space. The same degree of reliability was just what Sinn were looking for when introducing a new controlling system, and they found it in Corporate Planner.
In the middle of 2002 the Sinn Spezialuhren GmbH & Co. KG decided to introduce corporate, investment and sales controlling, along with the appropriate controlling software with an integrated reporting facility for efficient corporate management.
"In our company at the time, the analyses for controlling purposes were created more or less by hand using Excel. These were essentially short-term operative liquidity assessments, monthly budget/actual comparisons of the profit and loss statement, and the distribution and turnover figures seen from various perspectives. Gathering this information was always very time-consuming and often liable to error," as Mr. Lothar Schmidt, chartered engineer and managing director of Sinn Spezialuhren GmbH & Co. KG, explains. The Financial Accounting and Materials Management modules of the ProAlpha software provided the raw data, the Materials Management module containing detailed actual data concerning bills of material as well as distribution and turnover figures for each of the products, customers and distribution channels. The goal was to retain the existing operative systems.

Conceptualisation and demands

With the assistance of the consultancy firm Michael Butte Beratungsgesellschaft mbH, a business management concept was developed and a selection procedure for determining the most suitable controlling software got underway.
"In the important conception phase before focusing on software, together with the management we first worked out relevant control quantities, defined the requirements of data, analyses and reports, and clarified the data retrieval possibilities of ProAlpha", explains Volker Butte of Butte Beratungsgesellschaft mbH. "The most important goal was to achieve the transparency needed for decision-making without unreasonably high maintenance costs. Company data had to be analysed quickly and easily, developments recognised early, and consequences of managerial decisions simulated and displayed in an instant."
Based on the findings regarding company-specific needs gained from the conception phase, the following requirements of the controlling software to be chosen were set:

Technical requirements and capital expenditure

Network-compatible standard software, no individual programming
Simple connection to different existing systems
User-friendliness, short training periods
Flexibility and scalability
Capital investment (including training) less than EUR 20,000.00.

Business management capabilities, requirements of content

Flexible depiction of the company, shareholdings and sales controlling
Simple graphic analysis facilities with various views (e.g. columns, pies, etc.)
Management analyses (e.g. 80/20 Pareto analyses, trend analyses, etc.)
Convenient planning with simulation possibilities and diverse variants which may be saved (best case, worst case, etc.), and integration of profit, balance-sheet and cash flow planning
Quick and clear access to information
A largely automated reporting system straightforward in design and use
Facility for creating specific key ratios and individual formula

After a suitable selection phase, it quickly emerged that an ideal solution could be found in the shape of the Corporate Planner software from the Hamburg-based software house CP Corporate Planning AG. A short training session for the Sinn controlling department staff followed, after which the structures needed for corporate, investment and sales controlling were created as described below:

Corporate controlling

There were several stages to the implementation process. First the accountancy was analysed from a controlling point of view, and adapted in some areas, particularly as regards row layout.
A substantial change was the distinction between home and abroad when evaluating the statistical percentage cost of sales used for ongoing control. A differentiation was made in the percentage cost of sales according to home and abroad based on reduction in turnover for each distribution channel, and according to the shares of the various distribution channels in the domestic and international business. This differentiation is vital for controlling because the different distribution channels at home and abroad, each with their own specific reductions in turnover, make up different proportions of the total, and consequently different percentage costs of sales arise. From this, the effects on profit of changes in the region / distribution channel mix can be seen.
Data import from accounting was defined with an Excel file created there. The actual data are updated in Corporate Planner every month, although this could take place at any time, allowing the data in Corporate Planner to be displayed over time so that significant developments become apparent. Furthermore, due to the convenience of comparing planning data with actual data, variances are identified at an early stage and appropriate counteractive measures may be taken.

Investment controlling

Beispiel einer CORPORATE-PLANNER - Baumstruktur für das Vertriebscontrolling

The book keeping of the various shareholdings is done locally by accountants. In order that the Sinn controlling department in Frankfurt could be provided with the data each month in the required form, these accountants were requested on one occasion to provide the respective account frames, row layouts and account balance lists. The necessary adjustments for controlling purposes were discussed with the accountants who then carried them out.
The restructured business management analyses and account balance lists are now sent every month as a file so that automatic import to Corporate Planner and structural maintenance can take place quickly and easily, allowing continuous and prompt analysis of the monthly figures. Therefore the desired control of the Sinn shareholdings is now possible during the course of the year.

Sales controlling

In the field of sales controlling, attention was centred on the observation of monthly distribution and turnover figures of timepieces and accessories according to regions, distribution channels, product groups, series and models. Starting from these parameters, various views have been created in order to deal with the different aspects of the problem. In addition, detailed views on customer level have been implemented for important major customers and distribution partners. All the figures from the materials management system are provided as a text file and transferred for analysis in Corporate Planner automatically.
In the context of Corporate Planner implementation, the materials management system data were reassessed for the new controlling demands, whereby specific allocation criteria could be clearly defined and existing misallocations corrected. The staff responsible for maintaining these data were instructed in the correct allocation of orders to the various distribution channels so that the quality of data needed for effective controlling could be ensured.

Reporting

Reporting in Corporate Planner was designed in such a way that each particular recipient of a report promptly has the information at his disposal in the appropriate level of detail. As a result, those concerned are able to detect significant developments at an early stage and take steps to counteract them where necessary. In Corporate Planner, budget/actual comparisons and forecasts are made each month. The requirements of management may now be fulfilled without delay, as all the desired information is permanently on hand. Whenever fresh monthly data is supplied by the pre-systems, new reports are made in the software at the touch of a button, and so the long drawn-out procedure of creating them using spreadsheets is no longer necessary.
"Due to our corporate, investment and sales controlling developed with the help of the Michael Butte Unternehmensberatungsgesellschaft mbH, we at Sinn Spezialuhren GmbH & Co. KG are now in a position where the information relevant to management is provided pretty much automatically in all three areas so we can analyse it very quickly. This makes for a significant improvement in transparency in the company, with a very good benefit-cost relationship," is how the managing director, Lothar Schmidt, sums it up.

[back]