Enough of Complicated Spreadsheets

Client Story

District & Industrial Heating

TM

The

ExperienceBased on a true story

© 2015

5 years ago...

We knocked on the door of the energy division of former state owned coal mine mammoth suggesting they use

advanced financial modelling software.

and we were not

welcome.

Opposite us were 3 people.

over 30, 40 and 50

We pulled out our presentation…

Emphasizing how important it is for good companies to:

1. monitor their business drivers

2. optimize their performance

3. understand where their business is today 4. foresee where it will be tomorrow

All this in fast changing environment.

“Some 80 % of our business comes from our mother company”

Pre-agreed pricing, pre-agreed deliveries and purchases more or less the same as have been for the many years.

Oops!

And how about …

budgeting?forecasting?

strategic planning?capex?

management reporting?

Then we showed how easy and quick it is to create models, import data from general ledger, produce reports, or change assumptions that would trigger the series of consequential calculations that would

alter the future cash flow outlook.

all this in collaboration within the team.

“Well, we prepare budgets, generate management reporting, run quite

extensive capex programs…”

“but we have no real issues there…”

You cover P&L, Balance sheet, Cash flows,

Working capital?

Always delivered on time?

No mistakes in calculations?

Everything all right?

Like no issues what-so-ever?

“Well we are happy with what we have.”

And that was the end of our first presentation.

“I spoke about GIDE with our CFO, CEO and Chairwoman of the Board and I

think we should meet again.”

Some weeks later, I got a call from the over 30 head of the Office of Finance.

“We have some issues”

Our subsequent meetings revealed what was not said during our first

presentation

but should have…

A few months prior to our first presentation, company finished a big project with consulting firm, changing the structure of their business

units.

The team was tired of listening to a bunch of consultants who constantly kept telling them what they should have been doing, and the team simply

had no wish to prolong such agony.

Consultants suggested

among other things...

“That company splits its 10 plant production structure into 28 industrial business units reflecting the nature of their business in heat, pressured air

and power supply and distribution.”

As the result...

New Wave of Intragroup Supplies

Approx. € 10 million in annual intragroup commodity supplies

Heat, pressured air, water, and power, including power reserved capacity, power distribution services, power

(UHV, HV) power losses.

In an Already Complex Commodity Mix

of approx. value of € 100 million.

Intragroup supply coupled with Coal, Gas, utility water, waste water, rain water, third party heat, and power.

Painful Annual Cost Reconciliation

Every year team went through tough reconciliation process of commodity supply with its mother company and negotiated the price for supply of its commodities for the following year based on the price of coal supplied by the mother company, and heat,

gas and power purchased at the market prices.

This for each offtake points and complicated with intragroup supplies and fixed costs originated in the respective business unit

and level of distributed overhead expenses.

Calculated and maintained by one person in his spreadsheets.

Budgeting Proved More Problematic Than Presented

Several stand alone spreadsheet calculations produced in various departments along

with aggregated data from the commodity mix and intragroup supplies were copied

into one spreadsheet, populating high level budget data only.

Taking almost 2 months, this painful process often ended in the first quarter of the year,

by which time the budget was already prepared - simply because negotiations with the mother company simply were dragging

on….

GIDE

Alternativesvs.

“I personally prefer GIDE over the alternative systems I’ve seen because in GIDE I can make everything by myself and do not need to call

consultants any time I need to make a change”

“Provided price for GIDE is right”

Today, GIDE is used as financial modelling,

budgeting and planning tool, covering...

3 companies

of which 1 company =

50 models

Data Structure in GIDE

50 Models

600 Accounts

30 000 Data per period

which is an equivalent of approx.

2 million

cells in spreadsheets

Models In GIDE

Each business unit has its own financial model linked to other models as

appropriate.

Statements In GIDEP&L, Balance sheet, Cash flows,

CAPEX

Intragroup supplies

Summary and other statements

and

Pivotal Production Models

Accounts In GIDEFinancial and operational data linked within

one holistic consolidated model.

Periods In GIDEHistory3-5 years Monthly

Current yearMonthly, Budget, Rolling Forecast

Following yearMonthly, Budget, Forecast

Annual5-15 years plan

Adjustable at any time

Data In GIDE

Data typesFinance, Commodities, KPIs.

CurrenciesTwo currencies models.

EfficienciesCommodities, Boilers.

SystemsMIS, Excel, GIDE.

Budgeting Process

1. Import data

2. Define indexes

3. Define efficiencies

4. Adjust values if needed

JuneBudget

Strategic planMonthly forecasts

Available in 1 month

January

Forecast F0

Available in 2 weeks

Reporting Process

1. Close GL on 3rd day

2. Data imported on 4th day

3. Report ready on 5th day

4. Deadline on 10th day

Key Events

Change of ERPChange from SAP to EBS; no affect on GIDE.

Changes in GLComplete changes in General Ledger were made within 14 days.

Model AdjustmentsRoutinely small changes in models were made in-house.

GIDE vs. MIS AleaComparison of systems.

Key Benefits

Import & ExportExport of data for other systems are done in minutes.

Holistic ModelFinancial and operational data linked within one holistic consolidated model.

TraceabilityFind the last element of the calculation and still see semi-results and final result.

No IT admin neededUsers, Projects, Models and Snapshots management.

The Role

TM

MIS Alea

Thank you for your attention.

It would be our pleasure to give those interested a one-to-one demonstration that would address specific issues that you might

face in your company.

Please contact us for more details on GIDE Financial Modelling

Michael StimsonSales DirectorGIDE International Limited

TM

mstimson at mygide.ukUK Landline: +44 203 397 9762

www.mygide.uk