Norilsk Nickel accelerated release of the reporting under IFRS using SAP Disclosure Management

Disclosure Management SAP implementation

On October 23, 2017 the SAP company announced that Norilsk Nickel MMC reduced the term of release of the consolidated statements according to IFRS using the SAP solution Disclosure Management.

Norilsk Nickel uses SAP solutions since 2003. Based on SAP ERP the main business processes of a number of company assets, including production and repairs, personnel management, finance, construction are automated, the system of the corporate reporting and normative reference information is created.

In 2016 in Norilsk Nickel the solution on automation of preparation of consolidated financial statements on IFRS — SAP Business Planning and Consolidation (SAP BPC) was implemented. For the purpose of further reduction of terms of preparation of the reporting and decrease in labor costs on release and approval of closing statements in 2016 the next SAP project — SAP implementation of Business Objects Disclosure Management (SAP of DM) by forces of specialists of accounting service of the company and "Norilsk Nickel – the General service center" was initiated.

Staff of the company made demands to development of the IT solution integrated with SAP BPC which would allow to minimize the number of manual transactions when forming reporting documents in the formats used in the company. SAP of DM was selected from quality of such solution as optimum conforms to the specified requirements, provides stability of process and does not require considerable costs for implementation and support.

A system based on SAP of DM allowed the company to manage effectively the final stage of preparation of IFRS reporting and to provide operational formation of four versions of the reporting document in two currencies, in the English and Russian languages.

For the public company important that shareholders and investors received the reporting quickly. Every day matters. With SAP BPC and now with SAP of DM we gradually accelerate corporate "factory of the reporting". Qualitative data from a set of sources are consolidated, undergo testing and take the place in the reporting in one-two days at the minimum labor costs — Grigory Chulanov, the chief accountant of Norilsk Nickel MMC told.

On a response of the customer, SAP implementation of DM, along with other initiatives of the company directed to fast closing provided the publication of intermediate consolidated financial statements according to IFRS in six months 2017 for two weeks in comparison with the publication of IFRS reporting in six months 2016 earlier.

Specialists who prepare the reporting under IFRS bear heavy responsibility. They should monitor changes in international standards, join them to the Russian and internal requirements. Besides, in the modern world investors and shareholders wait for the minimum rupture of the reporting with reporting period. Norilsk Nickel will be able to fulfill all these requirements now. Besides, as the first user of SAP of DM in Russia, the company will become a model of automation of release of the reporting for all public companies" — Dmitry Pilipenko, the deputy CEO of SAP CIS noted.

Harmonious interaction of project participants allowed to implement SAP of DM in short time — within three months.

SAP implementation of Business Planning and Consolidation

In March, 2016 Norilsk Nickel MMC — one of the largest producers of non-ferrous and precious metals, the Moscow office of Deloitte — one of the international auditor consulting firms and SAP CIS company — one of market leaders of business applications announced the beginning of commercial operation of a system of corporate financial statements based on SAP Business Planning and Consolidation (BPC).

Improvement of processes of preparation of the reporting and the implementing solution SAP BPC allowed more than by two weeks to reduce terms of formation of consolidated financial statements according to IFRS and also to automate and unify its preparation at all enterprises of Norilsk Nickel MMC. The project was implemented in record time — in only nine months.

Fast implementation time became possible thanks to harmonious actions of all project participants. From Norilsk Nickel MMC specialists financial and IT services, the methodologies which provided development, adapted for the SAP solution BPC, and conducting internal examination on support of a system were involved. Consultants of Deloitte offered and implemented in it the advanced approaches to formation of the consolidated statements and also provided support of transition to new processes. The SAP CIS company made possible conducting examination the international support service of SAP. Unique feature of SAP implementation of BPC in Norilsk Nickel MMC became not only deadlines — are three months faster than the average project duration of such level — but also start of a system directly in commercial operation, without stage of trial operation. Such approach allowed to create financial statements in a half-year and in nine months 2015 in a new system, without duplication in earlier used solutions at once. Competent use of own competences of Norilsk Nickel MMC, experiment of Deloitte on implementation of tools of SAP and bonus support of SAP ActiveEmbedded promoted risk reduction upon transition to preparation of the reporting without the "pilot" mode with parallel use of the old and new systems and also to a project success in general. Reporting according to the Russian and international standards was one of key requirements of the customer. Besides, implementation for the first time happened at all enterprises at the same time and by a uniform technique (earlier deployment of SAP solutions at the enterprises of Norilsk Nickel MMC was performed step by step). In a new system based on SAP BPC more than 300 employees of accounting services of all divisions of Norilsk Nickel MMC work. The key indicator of success of project implementation was preparation of the consolidated statements of Group for 2015 in SAP BPC.

The decision on SAP implementation of BPC at all enterprises of Norilsk Nickel MMC was made to improve due to the need collecting and the analysis of the consolidated financial data required management decisions for acceptance. SAP implementation of BPC was preceded by an important preparatory stage: in 2014 at all enterprises of the Russian corporate structure of Norilsk Nickel MMC the SAP Intercompany system was unrolled. It allowed to solve a difficult and labor-consuming task of reconciliation of financial flows between the enterprises. In plans for development — integration of a System of consolidation into a Group common information space, including implementation of the solution on the automated collecting of initial data from the direct accounting systems of affiliated enterprises of Group. Based on the SAP solution BW the control system of achievement of the goal on decrease in stocks will be implemented, and this analytics will be is the cornerstone by data from the reporting under IFRS. Users will be able to work with a system, both on stationary, and on tablet computers using easily visualized reports and charts. Besides, based on SAP solutions it is going to develop the control system of preparation of financial statements providing not only its reliability, but also monitoring of risks of business processes and also necessary balance of the preventing and revealing control procedures.