"The Zagorsk Pipe Plant" implemented a budgeting system based on SAP

2020: Vnedrpeniye SAP BPC

On March 16, 2020 Itelligence Russia (Itellidzhens) reported that "the Zagorsk Pipe Plant" completed budgeting system implementation based on the SAP solution Business Planning and Consolidation (BPC). The digital project allowed ZTZ to reduce terms of formation of the annual budget twice. Besides, the company purchased an opportunity to trace the accuracy of its execution in real time. In general increase in efficiency, transparency and accuracy of financial planning in the company became a project deliverable. The itelligence company acted as the partner in implementation.

The key purpose of implementation – change of model of management accounting in connection with the extensive growth of the company and formation of modern culture of budgeting. During the project the integrated approach including implementation of functions of budgeting both on the party of the SAP BPC system, and on the party of the SAP ERP system was selected. The solution architecture assumed creation of a uniform data model regarding processes of budgeting for both systems based on the SAP HANA platform. Also within implementation the functionality of the payment schedule allowing to provide the forecast of liquidity with open planning horizon was implemented. It allowed to increase quality of management of cash flows considerably.

The project started in May, 2019 and was started by stages. Since November, 2019 business divisions began to create the budget for 2020, and process successfully came to the end in December, 2019 with the approval of plans for the current year. At the beginning of 2020 works on development the plan fact of the reporting were finished.

SAP BPC in ZTZ allows to work with main types of budgets: the sales budget, the production schedule, raw cost of production and shipments, purchasing budgets in the directions, budgets of the CFD and others. A system also allows to work with investment budgets, with income and expenditure budgets, the working capital, cash flow. Within the project all vertical of budget model is implemented: since needs of the CFD and finishing with master budgets. In addition, transition from control of limits of payments to control according to obligations became one of results of digital implementation. All signed agreements undergo automatic control of budget limits until their signing now.

the First 3 years of a company performance we noted explosive growth: production volume increased repeatedly. In 2019 we passed to the planned performance in this connection the need for the mechanism of accurate planning and the analysis of what occurs at the plant in terms of economy appeared. With the implemented product we not just resolved an issue of automation of budgeting. In fact we received a digital business case of the plant that allows to predict online result, EBITDA of the company and to quickly carry out scenario modeling. 2020 in the company is announced year of efficiency, and with this system we will be able objectively to see economic results of the held events for increase in efficiency,

SAP BPC – the product recognized world and domestic business for planning and budgeting. Based on the best practices, IT solution helps the companies to increase investment and operational efficiency, forecast accuracy and financial planning. The tool allows to increase stability and predictability of business. We hope that SAP implementation of BPC in the Zagorsk pipe plant will become the strategic driver of further digital transformation of the company, commented Alexey Leontovich, the deputy CEO of SAP CIS

Innovations begin with readiness for changes, and it is possible to call the Zagorsk pipe plant an example of the innovation industrial enterprise safely. Implementing the project with ZTZ, we cooperated with the professional command focused on result at each stage. The customer was ready to hear and implement our consultations and examination. A cornerstone of success of projects of budgeting is the worked methodology. This work was expedited by forces of colleagues of ZTZ and is qualitative, the methodology adapted under opportunities and technology features of SAP solutions during the project. Other important success factor was involvement in the project of upper managers from the customer who gave big support in the course of implementation of necessary changes in processes of the company, noted Mikhail Koveshnikov, the project director of itelligence company

For March, 2020 the company transferred all work with the budget to the SAP BPC system. In the program of digitalization the next stages plan projects in the field of warehouse logistics, production and project management.