Volkswagen Mexico - Case Study
Volkswagen Mexico chose Board to combine Analysis, Reporting, Performance Management, and Predictive Analytics
One of six Volkswagen manufacturing plants around the world, Volkswagen Mexico employs more than 65,000 people, including 49,000 supplier employees, at plants in Puebla and Silao for the production of the Volkswagen Jetta, Beetle, Beetle Cabriolet, and Golf 7 models, as well as engines and components for a wide range of other vehicle brands owned by Volkswagen. The plants, now covering more than 3.6 million square meters, have been operational since 1964.
Until 2015, the finance department of Volkswagen Mexico relied on multiple applications running on Microsoft Office products to produce its annual plans and develop the key financial milestones for the company’s operations.
Those applications, which had been created mostly in Microsoft Access Databases, flat files, Microsoft Excel spreadsheets and manual connections to other related systems, were judged to be inflexible, disconnected and unsecured, each requiring a great deal of very time-consuming and error-prone manual processing and integration. Each planning process cycle required many hours of work on those manual processes that often could contain deviations on numerical calculations. Such manual processes could introduce costly errors, subsequently leading to confusion and potentially inaccurate premises for the company’s planning cycles and KPIs.
To alleviate those technical and business pains, VW Mexico decided in 2015 to find a flexible FP&A software solution on which they could implement a Business Intelligence strategy that would allow their planning processes to run smoothly, automatically and more efficiently than their legacy processes had allowed.
After an extensive review of potential enterprise software vendors for Financial Planning and Analysis (FP&A) and BI reporting, including Oracle, IBM, SAP and Qlik, VW Mexico chose the Board platform, which combines FP&A, Financial and Strategic Corporate Performance Management, BI and predictive analytics on a single database with built-in ETL and no-coding application development for business users.
VW Mexico cited superior functionality within the Board platform, including its flexibility, data analysis capabilities, and technical infrastructure for virtual hardware, as primary reasons behind its selection.
The Board platform’s no-coding, toolkit approach allows VW Mexico business users to easily develop and reconfigure applications by dragging and dropping elements from platform menus. It’s tight integration with Microsoft Office products provides those users with the same look and feel they are accustomed to working with in Excel.
In its first year of deploying the Board Platform, VW Mexico has successfully developed and launched financial planning applications around its Marginal Contribution Calculation program, Integration programs, Input Consolidation, Variation Analysis and Reporting.
Marginal Contribution Calculation is a cost accounting concept that allows VW to determine the relative profitability of each product and line of business of the plants in Mexico. The metric allows VW to evaluate different areas of the business to determine which parts to emphasize based on the highest margins or the differences compared with the last financial planning cycle for a given part. With the Board-based applications, the company can now accurately determine the composition of their income and cost integration for each product and business line.
VW Mexico’s Integration Application collects and integrates the information coming from many end-users in Mexico, financial information from SAP FI (Finance Module), and information coming from the global systems in Germany in an automated manner to give the company and users a fully integrated repository from which to organize all of its data as a basis for analyses and simulations.
Also implemented on the Board Platform are applications for Input Consolidation, Variation Analysis and Reporting. Their Input Consolidation application allows each business owner of data to input their data and release it to other systems in the company through strong business rules and validation processes. Their Variation Analysis application gives business users a broad view of the data and calculations to fully understand conclusions, and provides numerical explanations for differences between planned finances and the real results.
For reporting, the company now has more than 20 standard reports to deliver information to VW Headquarters. For custom reports the end-users now have a strong multidimensional Board database to create ad-hoc reports by intuitive dragging and dropping of elements, thus achieving huge time reductions and ensuring consistent quality and accuracy as they are drawn from a single data source in the Board platform. The platform’s flexibility allows ad-hoc reports to be created easily with the same high degree of accuracy, and all reports give readers powerful drill down capabilities into underlying data.
Volkswagen Mexico’s Office of Finance reports that the tremendous improvement in processes, accuracy and visibility in the finance strategy efficacy, combined with cost savings and improved accuracy of their premise data for planning, has reaped an increase in efficiencies from 57% to 91% since implemented in February 2015.