Accelerated Insights

Cetrel implements SAS® Activity-Based Management for intelligent business processes

To be a top financial firm in Europe today, a company must be agile enough to identify trends before they begin, gain insights before the rest of the pack and be flexible enough to diversify in the face of ever-increasing competition. Cetrel, Luxemburg’s market leader in end-to-end solutions for electronic payments, encapsulates all of these concepts.

Cetrel offers a comprehensive range of services such as credit card payments, electronic transfer systems and inter-bank charge clearing. In addition, they acquire, authorize, and process more than 50 million payment transactions every year. More than 8,000 Cetrel point-of-sale terminals and 387 ATMs are active in shops across the country. While these are impressive numbers, Cetrel is determined to improve and grow their business even further.

Optimizing processes, increasing transparency
"Our business concerns the communication and technology of monetary transactions," explains Gérald Briclot, CFO at Cetrel. "These domains are evolving at a tremendous speed, which in turn is forcing the pace of new product introductions. The opening of the European market is another important driver. New competitors have entered our Luxemburg market, requiring us to rationalize our processes even further and make our costs more transparent. We have concluded that, in our case, the best defense is a strong offense and have decided to go after markets abroad."

But when is the best moment to attempt to enter new markets? And how do you define a strategy to develop and introduce a new product? "We realized that we needed access to ever more critical information in order to make well thought out decisions," recalls Briclot. "For instance, we wanted to know the cost of our business processes down to the last euro, and exactly how many staff hours were spent developing a particular product."

In order to optimize their resource planning, Cetrel wanted a way to evaluate the impact of entering a new market, and its possible effect on their bottom line, prior to developing and introducing a new product or service. Cetrel decided that the best way to achieve this goal was to implement SAS Activity-Based Management, part of the SAS Financial Intelligence suite of solutions, throughout the organization to make good numbers outstanding.

Gaining a stronger market position
Cetrel had been using traditional analytic accountancy, giving them a reasonably good indication of costs per center, but analytic bookkeeping is not precise and dynamic enough for a company that wants to lead the way in a highly competitive market. Overhead costs, for instance, were divided proportionally over all of the cost centers, sometimes resulting in a skewed picture.

Cetrel decided to rethink its accountancy methodology and realized that activity-based costing (ABC) was what they needed. "Activity-based costing allows us to allocate every single cost to the exact activity and cost center that generates it," says Briclot. "That way, we know the precise price of each activity, allowing us to set our market price as thin as possible. With ABC, we understand the root cause of a cost. Proportional dividing of unallocated costs belongs to the past. ABC is leading us to increased efficiency and a stronger position against competitors."

Achieving insights, faster
Once the choice for an accountancy methodology had been made and the cost centers defined, the company selected what they felt was the best-suited software package for their needs. They chose SAS Activity-Based Management because it is capable of handling a huge amount of data and allows the simulation of scenarios such as the effects of launching a new product or increasing transactions by a specific amount. "In addition, the software can accept data in various formats, was easy to install and is easy to use," says Briclot. Finally, it is very powerful, so that Cetrel gets results in hand within a very short time-frame. By using the SAS software, Cetrel has gained the critical knowledge they needed to make sound strategic decisions. The company now distinguishes between 200 cost centers spread over 45 activities. Incoming invoices are booked in the appropriate cost center, and once per quarter the accounting data is gathered and processed by the software.

Explains Briclot: "I get the results within just a few minutes, allowing me to make plenty of simulations within a short period of time. I simply alter a parameter, and the software does the rest." One example of such a simulation is when Briclot enters the number of transactions that a big European competitor claims to have, and then queries what would happen if Cetrel reached that level. "The software showed us the resulting evolution of cost and income. We achieved a clear insight into the impact that enlarging our market share will have on our cost structure. It even shows us where the impact will be felt most strongly."

Increasing efficiency, reducing costs
The knowledge that the software gives Cetrel is the starting point to seeing a bigger picture. "Now that we can identify costs more precisely and simulate the economic effects of a potential reorganization or new product introduction, we are implementing strategic measures much more quickly and effectively," says Briclot. "For instance, we have now successfully assessed and optimized the capacity of our help desk."

Cetrel previously had three separate help desks, each taking calls from a different group of customers: banks, cardholders and shopkeepers. The staff that manned one help desk did not take calls for the other two. As a result, if the entire staff of one help desk was occupied, no additional calls from that group of customers were answered. "After we identified this phenomenon, we used the SAS software to evaluate a solution. We immediately saw that we needed to restructure the helpdesks."

Staff were reorganized into a single team and properly trained, and new infrastructure was added. Efficiency was increased, customers were more satisfied and costs per help desk call were reduced. After achieving this successful outcome, Cetrel then also analyzed and adapted the scheduling of service technicians. The result? Each technician now handles seven, instead of only five, interventions per day – an efficiency increase of 40 percent.

The road ahead
Briclot specifically attributes the company’s increasing success to the decision to obtain and implement powerful and flexible software. "I realize that having a good idea of where you want to go is only the starting point on the path to success. For us, it is only thanks to using truly great software that we have been able to follow that path to new heights. Management is becoming leaner and decisions are taken based on knowledge and hard data, not conjecture. SAS Activity-Based Management gave us access to the insights we need to optimize our organization, consolidate our position as market leader and meet the business challenges of today, and tomorrow, head on."

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