Speed and Agility: A New Forecasting Regime in Days

Joyson Safety Systems switched from an existing Excel-based forecasting tool to a much more efficient web-based solution, but the project was set against a very tight deadline. Here’s how Britta Baier, Director EMEA Corporate Finance & Treasury, and her team, made it happen.

When Joyson Safety Systems (Joyson) set out to implement comprehensive and uniform group-wide cash flow forecasting capabilities, its chosen partner, TIPCO, was presented with another far more testing requirement: a go-live within just a few days.

US-headquartered Joyson, a subsidiary of Ningbo Joyson Electronic Corp, is a global leader in mobility solutions for diverse markets, operating across 25 countries. They took over former Takata AG, headquartered in Japan, a few years ago.

According to Baier, responsible for the EMEA region, the plan first emerged around five years ago. It wanted a system capable of importing all accounts receivable and payable from its SAP system in order to create transparent and accurate forecasting for all subsidiaries.

We very quickly found out that we could not continue with our own forecasting solution any more”.

Quick decision

The solution was being hosted by a Japanese operation, but the person responsible for its technical management had left the company, taking with them knowledge of how to repair a number of failed macros. What’s more, recalls Baier, EMEA really needed to augment weekly cash flow forecasting with weekly reporting, “and because we still had to do so much manual work on it, it became completely untenable”.

The relatively easy decision was taken to make forecasting ‘state-of-the-art’. Joyson was advised by one of its Big Four partners to see what TIPCO could offer. With Baier needing to impose an ambitious timeline, it demanded an extremely efficient workflow to be established between client and vendor.

It helped that TIPCO had recognised expertise in this arena and could offer a turnkey cash flow planning solution. All it need was input from Joyson’s enterprise resource planning (ERP) system. “SAP carries around 70% of our cash flow. That meant we could respond rapidly because the SAP/TIPCO interface was already well-established and known to our business partners.”

The smooth flow of the project was ensured with both sides putting forward dedicated and motivated teams, so that when TIPCO arrived for a project workshop, Baier says within just one day all the action items were agreed, placing the partners in a position to deliver very quickly.

Indeed, when asked by TIPCO to provide details of which metrics were going to be used, and how, Baier was ready to respond with the right data. TIPCO later mentioned that for other projects of this nature, the client had needed at least one month to provide the information. “It seemed that all the things that TIPCO needed, we had already been using in an Excel file,” notes Baier. “We were very organised and could respond quickly.”

In practical terms, by creating Excel templates into which all master data was migrated, it was possible to rapidly import companies, users, and accounts into the TIPCO platform. The team could then set up a forecasting grid that corresponded to the parameters defined in the scoping phase, and which was linked, via the SAP interface, to the SAP data pool.

One of the keys to project success was the full support given by Joyson’s senior finance manager. Baier reports that he was similarly keen to go live “as quickly as possible”, and was happy to provide all the necessary resources and encouragement.

Making changes

“At the beginning, I think it was a shock because it was a big change from monthly planning to weekly planning,” says Baier of the post go-live experience. “Of course, nobody likes a new system. But after one or two months, people got accustomed to it and everything was running smoothly.”

Accessing state-of-the-art cash flow planning means the team can now focus on analysis instead of tackling technical issues or the risks arising from manually inputting data. As a bonus, by retaining the old cash flow forecasts, comparisons can now be made with a single click, says Baier. But the main advantage is that the company now has group-wide cash flow forecasting. This enables everyone to analyse the same data, in double-quick time. “It’s very efficient,” states Baier.

Cash flow forecasting in Joyson’s EMEA operation is now much improved. The next task is to create a more effective comparison between actuals and forecast.

“If there’s a big deviation, TIP can automatically show the deviations, so the challenge is to get this data from SAP.” Nonetheless, with the system implemented in record time and running as it is, has it proven helpful in managing the financial effects of the pandemic? Baier answers with an emphatic “absolutely”.