The world’s No. 1 supplier of locks is searching for the key to improved financial reporting through a business intelligence project that will affect its more than 100 subsidiaries.
Assa Abloy, based in Stockholm, Sweden,
is at work on a project plan to move from distributed applications to a more centralized Web-based database that will change the way its global operations share budget and sales information. The nine-year-old lock maker, which is now active in more than 40 countries, owns seven Canadian firms that will be using the new system, including Medeco Canada, Abloy Canada Inc., Yale-Corbin Canada Inc., Mul-T-Lock Canada Inc., Assa Abloy Canada Ltd., Fleming Steel Door & Frames and VingCard Elsafe Canada. The company has chosen to extend and customize its use of Sunnyvale, Calif.-based Hyperion Software’s products for the project.
Ulrik Englund, the project leader in charge of the implementation at Assa Abloy, said the company decided to rethink its approach to financial reporting following the appointment of a new management team. Last year Assa Abloy lost its chief executive, Karl-Henric Svanberg, to telecom supplier Ericsson; he was replaced by Bo Dankis.
“”When you get new people on key positions, there is always a bit of concern regarding the numbers, and the way they want to understand their business,”” he said. “”There were a lot of questions coming up to corporate from the regions — ‘Can’t we do it this way? We want to change that’ — all those factors added up.””
Most of the companies Assa has purchased as part of its initial growth strategy have been small, family-owned firms without much expertise in business intelligence, Englund said. Its original deployment of Hyperion software was designed to contain a minimum of information, but the revamp could completely reengineer the way it manages financial reporting. Right now, Englund said, the biggest problems involve reconciling financial information stored at Assa’s head office and the information at each subsidiary. If the Hyperion project is successful, the company will be able to spend less time sorting out the correct data and more time analyzing it.
“”Specifically for the Canadian entities, we need them to report what is relevant for them, not what we tell them to report,”” he said. “”It’s really a question about understanding where we make money and in what product types. We work through a number of distributors now and don’t have a good understanding of who customers are and how products are installed.””
Donald MacTavish, director of marketing for Hyperion in Canada, said the problems Assa Abloy faces are common in many large global organizations which have dozens of general ledgers.
“”We have to look at companies — and this is where it gets pretty complicated — where one country has a chart of accounts with their taxation rules, their reporting rules for local jurisdictions,”” he said. “”Meanwhile another country has something completely different.””
Assa Abloy will design and build a prototype for testing purposes this spring, then refine it over the summer. The first reporting date using the new system will come in November, Englund said. On-site training will be provided at every location and will be supplemented by online education.
“”I think it’s safe to say that most of these companies have not really taken advantage of the possibilities in the financial reporting system,”” he said. “”They mainly considered it to be a bit of a necessary evil.””
That could be because reporting financial results within 28 days after a quarter ends causes so many headaches, MacTavish said.
“”Some companies we’ve worked with have been stuck where it takes them 22 days just to bring the information together,”” he said. “”We have customers who can in essence close their books and can pull it together in the first few days. Then they have literally weeks of time at which they can explore, analyze, gain understanding, review, detect anomalies or deviations.””
Assa Abloy has formed a reference group with representatives of business and finance controllers from all its regions who will channel information back and forth to the global subsidiaries, Englund said.