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Marico aligns expenses to budget allocation with financial planning software

Anup Varier and Sunil Shah | July 10, 2013
The solution covers eight global subsidiaries and supports between 25 and 30 key number crunchers. By running operations based on up-to-date monthly numbers the company spent 8 percent less than it estimated.

Also, as an organization with global operations, currency exchange rates had a major impact not only on planning numbers but also on the actual reported numbers. Earlier, these exchange rates were forecasted but now with the reporting tool, more up-to-date numbers are introduced in the planning and reporting system, creating a more accurate financial picture. This also gave global locations the flexibility to prepare their financials in their local currency and when the reports went to India, they would automatically be converted in INR.

The tool also helped automate the initial creation of templates. Users no longer have to waste time thinking what format to enter the data in. "Design level work is already taken care of by the tool. And report creation is also automated," says Rao. He adds that the tool was flexible enough to keep pace with changing consumer demands, was low-maintenance and enabled quality analysis. All of which went a long way in getting people to move to the new tool, a challenge Rao expected.

What also helped was generating different views of the same data in the tool itself so that people using it could see it in a way they wanted. It also gave them upload options so they could directly port data from spreadsheets. "Because the front-end as very similar to the spreadsheets, users were not distracted by the fact that they are using something entirely different," says Rao.

Moreover, thanks to in-memory analysis options available at the back-end, what-if analysis and slicing and dicing of data can be done more easily. "We see significant reductions in the duplication of work as well as reconciliation efforts thereby enabling faster group level reporting," says Pawan Agarwal, head-corporate MIS and accounts, Marico. The lead time for releasing a budget has also been reduced from five days to four hours.

Slick Planning
Rao isn't resting on his laurels. "This year is the second phase of the implementation and we will include non-financial data in the planning and forecasting system," he says. They have already started tracking their budgeted expense versus their actual expenses where 'actuals' are drawn from the ERP. Getting this reality check on its planned vs. actual expenses is also helping monitor profitability.

Fluctuating raw ingredient prices is a challenge most FMCG companies face. Yet, at the consumer end, prices have to remain steady given the price-sensitive nature of their markets. Britannia, for example, has kept the price of its Tiger biscuits steady for years, despite the rising cost of raw ingredients like sugar. At Marico, refusing to change the price of its flagship product, Parachute, for instance, was important to the company, but it still needed to know how much it was absorbing.


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