Using spreadsheets for monthly performance reporting had proved tricky for Al-Babtain Group (ABG).
It is a highly diversified company that operates across several business lines including automotive, information technology, investment, industrial and finance. ABG is a major presence in the Middle East and North Africa retail auto market, as this business accounts for close to 80 per cent of the group’s annual revenues.
ABG holds franchising rights for six major brands like Nissan and Infiniti. It operates 50 branches across Kuwait, the UAE, Egypt and Bahrain. That means it deals in multiple currencies.
Separate business units
The group splits the auto division into three distinct parts: car sales; servicing and spare parts; and accessories such as tyres and batteries. It treats each one as a separate business unit.
ABG was experiencing challenges around working capital and inventory management. ABG operated two large warehouses from where cars and parts are sent to showrooms as needed. With the number of franchisees involved, there were close to 300 SKUs for cars alone.
Managing the units with spreadsheets was difficult and time consuming, due to factors like price changes or new models becoming available. Revenue budgeting was a complex task, because prices would differ depending on whether the customer was a private company or a government agency. Customer discounts often varied depending on the sales channel.
Sales budgeting involved importing products from different countries, in different currencies, as well as external costs such as customs and freight.
In the accessories unit the challenge was more complicated still: ABG has almost 1,000 SKUs. Budgeting was at summary level and it was very difficult to handle planning with just spreadsheets.
Models to manage
Miagen presented ABG with a corporate performance management solution that connected all parts of the group into one. Miagen developed models to manage supply and demand using the cost plus margin model, which takes account of how the same car may have a different price depending on whether it is being sold through a retail, commercial or government channel.
Miagen created a central inventory, categorised by brand, model and year of manufacture. Before this, ABG had needed spreadsheets to do this, but now, it records sales at division level to avoid the risk of duplicated data.
It built the integrated financial planning and analysis system on Adaptive Insights’ toolset.
The biggest benefit to ABG has been the time saved in monthly performance reporting. This work used to involve 25 different Excel spreadsheets and took a week to prepare. Now, it takes just a few hours.
Monthly reporting also gives managers a view across all of the different lines of business, and provides both financial and operational metrics. The consolidation solution provided by Miagen enables ABG to compare actuals versus budgets, and also to use the same data for statutory reporting. A further benefit is that ABG now has driver-based modelling to manage its operational expenses and overheads.