Marelli - Case Study
Planning and controlling worldwide IT costs at a global automotive supplier: Marelli and the Board platform
The Company: Automotive technology and innovation
In 2019, Calsonic Kansei and Magneti Marelli combined to create a global independent supplier: Marelli.
Marelli is an international leader in the design and production of high technology systems and components for vehicles, headquartered in Italy. With revenues of €8.2 billion in 2017, more than 44,000 employees, 88 production facilities, and 15 R&D centres, the group is present in 20 countries across five continents and supplies all the major car makers in Europe, North and South America, and Asia.
Product and process innovation is at the root of all activities that have an impact on improving Marelli’s competitive position and economic performance. For this reason, the business invests around 5.4% of its revenue in R&D activities around the world and approximately 10% of employees are involved in product innovation and improvement processes.
The Challenge: Planning and Controlling IT costs worldwide
Gaetano Cifaldi, responsible for ICT Supply Chain & Material Management Governance at Marelli, shares the challenges faced by the business:
“Managing a Budgeting & Forecasting process in an international environment, especially in a company as diversified as ours, is certainly very complex. Global IT expenses and investments must be controlled while overcoming the challenges presented by the presence of multiple companies in different countries as well as having the peripheral expenses controlled by our central structure. Practically speaking, a matrix organizational model was produced in which investments are made partially on a local level and controlled centrally, in a bottom-up process, and partially directly allocated by the central unit to the countries in a top-down process."
“Before adopting Board we used some forecasting and budgeting applications that were developed using proprietary software and Excel. Thanks to good in-house knowledge both of databases as well as SAP, we were able to create a system that guaranteed a certain service level for the company. But it had structural limits with respect to flexibility, security management, and depth of analysis.”
The Selection: A complete, easy-to-use platform
Seeing the need for an alternative approach, Marelli began the search for a solution, as Gaetano explains:
“Following an organization-wide analysis we realised we would benefit greatly from the adoption of a tool that would allow us to integrate all the information coming from various sources in a single environment. This would guarantee that we could immediately perform multidimensional analyses of the information, making forecasting simple and flexible. Another requirement was to significantly decrease the need to contact a software house every time changes need to be made to reporting, not only to save costs, but also to have full control of time-related aspects.”
Starting from the need to provide a solution to quickly optimize decisions for both administrative and technical users, Marelli searched for a platform that would:
- Simplify the collection and standardization of data from various management systems, databases, and other sources
- Integrate all the forecasted expense information in a single environment
- Manage the budget and the forecast
- Simplify simulation processes
- Increase the depth of analyses with multidimensional access to information, guaranteeing the ability to view data based on the specific analysis
- Ensure flexibility, allowing the system to handle organizational changes and new business requirements
- Provide reporting that allows the integration of information with an explanation
“When we started with the software selection, we were directed towards Board as we already used it internally for a small part of the analysis. This made it possible for us to evaluate the tool while being fully aware of its capabilities and its ability to fulfil our objectives.
“During the selection process, we also considered Cognos TM1, which, like Board, was already used in the company. Board appeared to be the best decision for us because it was the only tool that provided everything we were looking for in a single environment. At the same time, it guaranteed simplicity of use and the flexibility needed to be able to independently create new applications and adapt existing ones to our continuously changing business requirements. Also, from a purely economic point of view, Board is the solution that has the best quality-price ratio,” concludes Gaetano.
The Project: Multicompany, multicurrency, and multi-country budgeting & forecasting
The Board project at Marelli covers the IT expense Budgeting and Forecasting process across 10 business lines, 77 plants, and 18 countries, all operating using their local currency, which is automatically consolidated into the currency of the Group. The information, which partially comes from manual input at a country level and partially from SAP (attributed by the central office), is integrated into a single database. The final results are then summarized and transferred to SPIRIT, the FIAT (FCA) group financial planning system.
The yearly budget is combined with a quarterly forecast, and at any moment it is possible to compare and analyze the variances between the actual, budgeted, and forecasted data based on specific analysis parameters (such as business line, country, or product). Board guarantees high levels of flexibility during this process. It allows users to change the budget items while the process is in progress, as well as to enter new products, companies, or business lines at any time without affecting the validity of the data model.
This same elasticity is also demonstrated in managing roles and when changing the functions assigned to individuals. This frees administrators up from a series of activities that in the past could generate bottlenecks and unpleasant lags.
Furthermore, the fact that planning and reporting are managed in a single, completely integrated environment not only provides users with in-line reporting but also the possibility to quickly create personalized analyses in complete autonomy.
“Board plays two roles: it is not only a container, but also a certifier of the validity of the information. Its function becomes even more important when considering that the information does not only originate from our systems, but also from our subsidiaries. In this context, it becomes clear how the developed solution also plays an organizational role, creating a transparent process for optimizing the forecasts and budgets for the entire IT structure while also controlling the peripheral expenses. Another important benefit is the rationalization of expenses obtained thanks to the transparent view of suppliers at a global level,” comments Gaetano.
The Results: Structure, flexibility, simplicity, and speed
With Board, Marelli’s ICT budget of more than €60 million has now been centralized, with a range of expense control mechanisms in place. This has resulted in numerous benefits, as Gaetano explains:
“By selecting Board, we have obtained significant improvements that have helped us considerably recover operating efficiency. The peripheral offices are now able to independently manage the costs for which they are responsible, have full visibility and, at the same time, have the ability to drill down and track the costs attributed to them at a central level. All of this takes place in a multicompany, multicurrency, and multicountry model with more than 3,000 lines of budget, different approval levels, and security profiling able to reflect the complexity of the matrix structure.
Other benefits delivered by Board include:
A reduction in the time required to collate data
“The switch to a tool like Board has helped us obtain savings in terms of the workforce as well as the time used to obtain the management control data.”
The ability to manage the platform in-house, thanks to its flexibility and intuitive nature
“As we have good basic technical knowledge, our objective was to be independent in producing reports, structuring new analyses, and managing data access authorizations. Before, collecting the information was rather difficult, also due to communication and currency problems.”
In line, standard reporting that is centrally managed and controlled
“Before, reporting did not exist - we used an Excel spreadsheet with filters. Today the reports are standardized, comparable, and centrally managed through a hierarchical approval cycle.”
A reduction in costs
“An initial selection was made based on the cost-benefit ratio and, from this point of view, Board sets itself apart clearly from all the other tools we had taken into consideration.”
Rationalization of information across the head office and subsidiaries
“The ambitious project that involves adopting Board in Marelli’s entire IT forecast and budget cycle was completed with additional projects that extended its use to permit the automatic recharging of costs downloaded from SAP (a process that was managed using Excel).”