Danish Retail Giant Chooses SAS Financial Management Solutions for Better Budgeting and Forecasting

The leading Danish discount retail chain, Fakta, had for years suffered from an inability to set and report on their budgets easily or quickly. And because their budgeting process was being carried out manually, mistakes were not uncommon. "We live in a world where it is crucial for us to be able to react quickly to changing circumstances because our profit margins are so small," says the Financial Director of Fakta, C. F. Thorhauge. "If we are to earn money, we must be really tough in controlling our costs."

Since implementing SAS Financial Management Solutions, however, the company has enjoyed a striking improvement in the efficiency of its budgeting process, faster access to reports and a shared basis for decision making.

A difficult process
Before using SAS, the budget process was very unwieldy. Fakta has 16 retail regions in Denmark, each of which has a manager who is financially responsible for the shops in his or her region. Each region worked out its own budget and sent it to the company headquarters in Vejle. Thereafter, Fakta's IT Department had the responsibility of collating the budgets from all the individual regional managers. With this information in hand, the Finance Department at HQ then manually determined the company budget, by using spreadsheets or other forms of documentation, even by scribbling notes on a piece of paper.

"It was already clear to us several years ago that the situation was becoming untenable," says Jens Brinkmann, Financial Controller of Fakta. "It was extremely difficult to control the vast quantity of information that came from the 16 regions into head office. Often, it took days or even weeks to collect all the different budget information, and there was a major risk of errors occurring during the process."

Speeding up the system
"Together with SAS, we have created a central, user-controlled system that contains all the budget-related functions, from turnover through allocated overheads to capacity overheads," continues Brinkmann. He explains that when the last user has entered their figures into the system, the budget is then truly finalized and the numbers are reliable. "Thanks to SAS, the whole budgeting process is far faster than before. The regional managers are now budgeting on the same basis as the people at headquarters. That means that everyone can quickly get an overview of the entire budget."

Says Lars Knudsen, head of IT at Fakta, "In the IT Department, we no longer have anything to do with budgeting. The days of manually collecting and checking data are over. Today, it all happens automatically in the Finance Department, which really makes more sense."

In connection with the implementation of the new budgeting function, Fakta ran a series of internal courses for its staff to ensure that they understood how budgeting would be carried out in the new system. "We did not change the principles behind the budgeting, but only the way we did it," explains Brinkmann. "The next step is for us to use our intranet to provide all shop and regional managers with access to the budget follow-up reports."

SAS provides value
Throughout the whole changeover process, Fakta has felt that SAS lived up to expectations, both in terms of solving Fakta's problems, and also in SAS' good understanding of the discount chain's budget processes.

"SAS has always been a serious company with plenty of good references," continues Knudsen. "The SAS consultant who was assigned to the project knew how to relate to us and the communication was great, so we had the interplay we needed right from the start. We are not experts in preparing project requirement specifications, so it was important for us to get the right help to transform our ideas into reality, and this is where the SAS consultant really showed his value."

Because the company now relies on the SAS Financial Management Solutions, the national discount chain is far better able to control business operations and to handle the budget process. "Where it had previously taken days or weeks to determine the budget for the whole discount chain, it can now be accomplished in just a few hours. We've put an end to all the poor excuses for mistakes in the budget," concludes Thorhauge.

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