Listed companies with tight reporting deadlines the world over know the drill around the month-end closing procedure. It’s probably one of the most labor-intensive times for controllers as they go through the accounts to analyze changes in the figures, working through many - often manual - processes.
It was no different in Controlling in the B2C division at Deutsche Telekom. Each month, closing reports are compiled from multiple sources with the aim of detecting deviations in month on month figures, for example. It’s the controller’s job to analyze and provide comments and insights on these changes.
Grappling with Manual Processes During Peak Workload
The digitalization team, headed by Gerrit Lillig, was brought in to evaluate the situation. The problems with the previous process were twofold: On the one hand, collecting the information for the reports from multiple sources was time consuming and potentially error prone. The other problem was the slow pace of the process. Controllers need quick access to meaningful figures and don’t want to waste time sifting through figures manually - particularly during the busy end-of-month period.
Lillig’s team ascertained that both collection of the data as well as access to report comments can be more effectively handled by a workflow that automates the provision of comments and analyses for the monthly closing reports.
The Solution: Automated Process Produces Deviations Analysis at the Click of a Button
Controllers can now obtain the underlying meaningful reports quickly without having to search through figures manually. The new process produces technical comments on the compiled figures automatically in a template. After reviewing the comments in the template, controllers can elaborate on this information, thus entering further expertise to the database.
With this new process, controllers can access basic, commented reports literally at the click of a button. And now focus on using their time to elaborate on these, adding more insight to the automatically provided comments in the reports, and enhancing the master database with their expertise. This provides Controlling not just with an automated process for comments but also a deviations analysis tool.
A Three-Step Process using KNIME Analytics Platform
In the first step, KNIME is used to read in, aggregate, and create time series from the data. The data consists of monthly actuals compared to forecast and budget figures as well as prior year figures. The hierarchies between individual positions (profit and loss vs parent profit and loss positions) are consolidated and then mapped to the relevant entities in the respective management report.
The second step is to take the prepared data from SAP BW, add missing totals from the management report, other residual positions, as well as accumulated values e.g., YTD, QTD.
In the third step, deviations (absolute and relative) are calculated, filtered, and components for creating comments are created with particular reference to positive and negative deviations. Finally the individual positions are merged and the results are automatically commented. These comments are produced in text form and transferred by a bot (blue prism) to the closing team who review them and elaborate as required. Figure 2, below shows how much of the output i.e., the final commenting is provided by the workflow. Only the comments highlighted in yellow were added afterwards by the closing team.
The availability of KNIME Analytics Platform as a free and open source tool meant that the project could start immediately. There was no need for getting approval for an upfront investment. Due to KNIME’s visual programming environment, it’s not only easy to use but it also enabled the department to develop this solution independently of IT teams. Even with little prior experience in using KNIME, a team of two - together with the closing team - was able to develop a production-ready solution within three months. With the workflow in place, its graphical visualization enables easy handovers and understanding of the process within and across teams.
“It was great to see how, with the right approach and tool, we were able to generate a valuable benefit for our closing team in such a short time.” Gerrit Lillig, VP PK Steuerungsinstrumente, Telekom Deutschland GmbH.
This solution is currently in operation in controlling for Telekom Deutschland’s private customer business (B2C) closing department. Ruben Flemming from the digitalization team is now about to scale up the solution to run it not only on the financial closing data but also for deviation analysis on sales performance data.
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