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Case Study: Manufacturing Company

Industry:
Manufacturing
Company Type:
Aerospace and Defense Manufacturer
Company Size:
$45B
Job Functions:
VP Finance, CFO
Solutions:
BI Strategy and Planning, BI Requirements Analysis, BI Portfolio Development, Performance Management

Challenge: How to organize, standardize, stage and deliver comprehensive high-quality financial, cost, and operational information for a very large, multi-division, multi-product company.

Solving Complex Technology Challenges

Our client is a global security company that is principally engaged in the research, design, development, manufacture, integration, and sustainment of advanced technology systems and products.  Its products include military aircraft, missiles, ship systems, sensors, satellites, and space transportation systems. 

The company also provides a broad range of management, engineering, technical, scientific, logistic, and information systems services.  For example, it is the largest provider of IT services, systems integration, and training to the U.S. Government. With $45 billion in annual revenues, our client is a Fortune 100 company. 

Improving Core Financial Management Processes

The company operates in four distinct business segments: Aeronautics, Electronic Systems, Information Systems & Global Services, and Space Systems.  Each segment is a complex and multi-product business that addresses substantially different markets. 

Because almost all of its revenue comes from contracts with the U.S. Government, its financial management processes are aimed at managing financial performance at the contract level, across groups of contracts managed by its various business units, and for the company as a whole.  While its core accounting systems and financial management processes were completely effective for capturing and reporting contract financial performance, they provided limited visibility into higher value-adding performance information. More specifically, company financial managers and line managers:

  • lacked timely visibility into operational performance variances that could impact financial performance
  • lacked predictive analytics to forecast major drivers of financial performance, e.g. subcontractor operational and financial performance
  • lacked timely visibility into financial performance metrics

At the enterprise level, financial managers were handcuffed in their ability to oversee business unit financial performance – due to the lack of a common financial performance management framework and performance metrics. The company recognized an opportunity to leverage advanced business intelligence (BI) and business performance management (BPM) methods and tools to proactively drive financial performance – rather than reacting to events after the fact.

Financial Management Vision – Driving Financial Performance

The company selected DecisionPath because of its recognized experience helping large complex companies leverage BI to achieve a holistic financial perspective and leverage operational drivers of key financial metrics to drive business performance. Given the need for a common financial management framework across its four business segments and thousands of contracts, the company required an enterprise-class, business-driven approach to defining the specific requirements for leveraging accounting data and program performance data to anticipate and drive financial performance across the company.  Accordingly, the BI team leveraged DecisionPath’s BI Pathway Method to:

  • identify key financial management improvement opportunities and the associated requirements for business information, analytics, and performance metrics
  • define and prioritize a portfolio of BI projects based on their potential financial management impact
  • assess data warehousing and BI technical infrastructure, technical skills, and process maturity to successfully deliver advanced BI capabilities
  • formulate a comprehensive, integrated, and time-phased roadmap for delivery of priority BI projects and associated infrastructure enhancements

Once these activities were completed, DecisionPath partnered with the company to define the specific requirements for financial information, financial performance analytics, and key operational and financial performance indicators. Based on these requirements, DecisionPath assessed the data sources of the required information, identified data integration challenges, and developed a data integration strategy.  Once these pre-conditions for success were established, DecisionPath and the company worked together to design and develop an initial financial analytics application.

With the portfolio of BI projects rolled out, company financial managers have advanced BI-based tools for:

  • assessing potential program delivery problems sooner, thereby mitigating risks before they impact financial performance and customer service
  • delivering programs on-time and on-budget, including subcontractor-related execution
  • improving overall program performance in terms of cash flow, sales, and margins.

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