part of Aker

© 2011 Aker Solutions

Cash forecasting with BPC in

Aker Solutions

Aksel Oland, Aker Solutions October 2011

© 2011 Aker Solutions

part of Aker

© 2011 Aker Solutions part of Aker

Public

31-Oct-11

Agenda

■ Company in brief

■ What kind of challenges needed to be solved

■ Why SAP BPC solution was chosen

■ How project was carried out

■ Lessons learned

■ Expected benefits

■ Functionality of the new solution

© 2011 Aker Solutions part of Aker

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Who we are, what we do

Slide 3

Aker Solutions in brief

■ A leading global provider of engineering

and construction, technology products,

execution, service and integrated

solutions to the oil and gas industry

■ Approximately 20 000 employees and

8 000 contract staff in around

26 countries

■ Main shareholder: the Norwegian

investment company Aker ASA

Operating revenues

NOK 46 bn

Operating profit

NOK 3.8 bn

Market value

NOK 32 bn 11th largest on OBX index

55 % Norwegian shareholders

All key figures above are as

reported for 2010 except market

value which is as of 28 Feb 2011.

Profits are EBITDA

Key figures

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Slide 4

Aker Solutions’ operating businesses Corporate structure (high degree of autonomy)

Engineering Solutions Product Solutions Field Life Solutions

Engineering Subsea

Mooring &

Loading Systems

Drilling

Technologies

Process

Systems

Well Intervention

Services

Oilfield Services &

Marine Assets

Maintenance,

Modifications &

Operations

4th quarter results 2011 – 17 February 2011

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Corporate Treasury – Role and Activities

Corporate Treasury

Internal Bank

Commercial Bonds &

Guarantees

Parent Company

Guarantees

External Debt administration

FX & Derivatives

Settlements and

Confirmations

Cash Pools

Cash Reporting & Forecasting

Slide 5

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Corporate Management

Early warning

Strategic planning

Control

Business Units

Business Follow-up

Liquidity planning

Variance analysis

Corporate Treasury

Liquidity Planning

Foreign Exchange

Financing strategy

Business Development

Rating

Compliance

M&A strategy

Improved control on debt and capital allocation

Cash Forecast – Who need it and Why

© 2011 Aker Solutions part of Aker

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-1 000

0

1 000

2 000

3 000

4 000

Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10

Net current operating assets (NCOA)

NOK million

Continuing operations

Incl. discont. and AMC

Strong focus on cash management

■ Large contracts

■ Progress payments

■ Irregular cash-flows

■ Volatile working capital

■ Kværner cash forecasting

tool developed from 1998

■ Historical experience (2001-4)

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Slide 8

What kind of challenges needed to be solved

Quality issues in legacy cash-forecasting system (Kontext):

■ In-house developed and non-intuitive user interface

■ Based on old non-standard technology and poor design

■ Weak functionality with regards to versions control, security and

audit trail

■ Lack of integration to SAP ERP (for organizational data and bank

balances), data warehouse system (SAP BW), and Treasury

Management systems

■ Time consuming process

■ Too many manual processes

However;

■ Kontext contains valuable reports, analysis, graphs and

consolidation tools. Served as important basis for requirement spec

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We implemented SAP – an integrated system – it should give all

the answers – Forecasting should only be a BW/BO report….

■ Not so

● Sorry, but the ERP data we have is not enough

■ Why?

● Not all Business Units use SAP; only 90 out of 140

● Non-SAP Treasury System

● Tenders in Excel

● Sales orders, and especially purchase order liquidity effects

needs correcting ( discipline, VAT, PO milestones)

● Big uncertainty regarding overdue receivables

● “Human touch”….input from Project Controllers

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Slide 10

New Cash forecasting system: myCash

Consolidated and individual views

■ Flexible hierarchy navigation Consolidated daily, weekly and monthly views by:

● Business Area / unit / project ● Geography ● Currency

■ Variance analysis

■ Accuracy reports

■ Historic comparisons

■ Daily cash reports

myCashForecast

(SAP BPC)

cash events, interface

with SAP and

Quantum

Cash pool

Bank account

balances

Non Cash pool

Bank account

balances

Manual forecast

Adjustments from

Treasury

Forecast input from

Business Units

Treasury output:

Business unit output:

•Individual Forecast BA / BU /project

•History

•Variance analysis

•Balance reports

© 2011 Aker Solutions part of Aker

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Slide 11

Why SAP BPC solution was chosen

■ Leverage on existing SAP investments

■ Flexibility

■ Possibility of a tailor made solution

■ Intuitive user interface (excel!!)

■ SAP in-house competence

■ Known vendor

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Slide 12

How project was carried out

■ Project team consisting of representatives from:

● Project owner - Corporate Treasurer

● Corporate Treasury staff

● Representatives from Business Units

● Business Services

● External SAP resources

■ Kick-off August 2010

■ Requirement gathering through workshops

■ Consultants onsite every second week

■ Common SharePoint project site

■ Original go-live planned to January 2011 (new go-live April 2011)

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Slide 13

Lessons learned / challenges

■ Availability of BPC resources

■ Lack of reference cases ( as a Cash forecasting tool)

■ Too little time planned for testing

■ Different background and knowledge between project team members (“SAP” VS “BPC( Outlooksoft)” VS NoSAP)

■ Data quality in SAP ERP (Purchase orders, sales orders, overdues)

■ Different technological platform (user PC’s) -> Recommended to use Citrix due to # of client patches

■ Complex System Landscape ( BPC, dotnet (7.5), Citrix, Single sign-on problems with BI BO 4.0)

■ Integration to Treasury Management system and SAP BW / ERP ● Tie together non-sap data and sap data

■ Input layouts created based on past system…

■ Performance of input layouts (120 users) ● Citrix not virtual server Physical ● Reduce complexity in IL ● Supportpackages 3*

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Slide 14

Benefits (expected)

■ Better quality on the cash-forecasts

■ Improved data integrity

■ Integration to Treasury Management systems and SAP system

■ Improved reporting functionality

● Users will be able to run their own reports

■ Faster forecasting process:

● Less manual input –is it a dream?

■ Leverage on SAP platform and in-house SAP competence

© 2011 Aker Solutions part of Aker

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Slide 15

Functionality in the new myCash solution

SAP BPC

Short term forecast

Long term forecast

Variance and other reports

Internal / external

Cash pool / Non-pool distinction

Inter-company

reconciliation

Weekly

Input from

50 business

units

Monthly

Input from

100

business

units

Business unit / Business area and aggregated level

Input in transaction currency

© 2011 Aker Solutions part of Aker

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Slide 16

SAP BPC

Short term forecast

Long term forecast

Variance reports

Inter-company reconciliation

Master Data (org

structure)

Bank Balances,

Accounts payable

& Receivable,

Purchase and

Sales orders

Financial Transactions:

•FX Transactions

(hedges)

•Money market –

principal & interest

Basic design

Financial

market

operations

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Integration of SAP ERP data to BPC

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End-user starting point: Business Process flow in Web browser

- tasks and status

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Overview sheet: top part

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Overview sheet: middle

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Overview sheet: bottom

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One of the input screens; 8 dimensions

BU/Forecast period/date/Cash item/pool or non

pool/Project/intercompany/Transaction Currency

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Inter-company matching report

Slide 23

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ST Graph

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Total net cash flow detail

Slide 25