CUMIS
"In the past, if we got a question about the expense data, probably 50% or 60% of the time we were not able to answer it because the old system had very poor reporting capabilities. And now, with Business Objects EPM, we are able to answer those questions."
Brian Joynt, Manager of Expense Management
CUMIS
Challenge
The Burlington, Ontario-based CUMIS Group maintains a portfolio of insurance, retail, and wealth management products targeting Canadian financial cooperatives, credit unions, caisses populaires, and their members. With five companies under its wing, CUMIS was challenged to adopt a more transparent reporting model along with an activity-based costing (ABC) system that would help CUMIS fairly allocate expenses across its companies and approximately 70 lines of business and provide senior management with insight into these costs.
Brian Joynt, manager of expense management at CUMIS, notes, "We had minimal reporting, with no transparent view of the expense allocation. That caused a number of problems for pricing purposes, expense management, and reserving purposes." For example, due to the lack of transparency into expense data, operating departments didn't see consumed expenses being allocated to them, which resulted in uninformed cost behavior. Joynt also cites an issue with its ABC model. "Our activity-based costing model needed to be revamped, ensuring we had the correct and optimal number of activities and the proper cost and activity drivers," he says.
Because of insufficient reporting, says Joynt, "There was less than optimal confidence in the expense data." CUMIS realized it needed to deploy an ABC and reporting solution that would be in line with its overall goals. Paul Robertson, senior expense analyst at CUMIS, says, "Reporting was a key goal—to eliminate that black box into which expenses disappeared and get the desired transparency. We also wanted to be able to fully implement the desired ABC model without any restrictions due to the software."
Approach
As part of the software selection process, CUMIS looked at BusinessObjects™ Enterprise Performance Management (EPM) and liked what it saw. "We knew that we had to dramatically improve our reporting capabilities, and we knew that Business Objects could definitely help us out in that area," says Robertson.
CUMIS selected BusinessObjects for a number of reasons, including its flexible, user-friendly ABC modeling, its customizable reporting, and its ability to distribute information in a very controlled and secure setting. "The security element of BusinessObjects best suited our organization," says Joynt. "With the product, we are able to control confidential information, and that was a critical piece in the decision-making process." In addition, with end users ranging from senior management to actuaries, ease of use was an important consideration.
Results
With BusinessObjects EPM, CUMIS is now able to implement a full ABC model. Joynt says, "With BusinessObjects EPM, we found there were no limitations on implementing the model we wanted to implement. There've been no compromises or no constraints. We couldn't do that with our previous application." He adds, "The Business Objects product itself is very closely aligned with core ABC theory."
"BusinessObjects EPM is very interactive and user-friendly, and very easy to use," says Robertson. "It offers an intuitive way of applying ABC theory and it supports our cost-behavior objective, where operating departments can see the expenses they're creating in the shared services areas. For someone who wants to slice-and-dice the data, it's certainly been a great improvement."
Business Objects end users at CUMIS are product managers and corporate actuarial staff. CUMIS appreciates the interactive capabilities, where users can manipulate their views of the data within the reports. Joynt explains, "They can choose different periods—1st quarter actual, 2nd quarter actual, last year, and so on—and they can drill down to see what activities they're absorbing and the cost of those activities. They also can drill down to see where the expenses have been allocated from." He notes that management, in particular, appreciates the ability to see which operating departments are allocating expenses to their lines of business.
"We've had other wins, too, such as the ability to allocate our budget on a monthly basis, and to allocate expenses on a monthly basis. Also, we have an improved picture of profitability. That's partly due to the revamped ABC model as well as the functionality of the software itself," says Joynt. "We've had some pretty significant expense shifts between major product groupings and also between our companies. With BusinessObjects EPM, we're now able to see the flow of expenses from its inception to the file destination at the product level and provide the transparency the business demands."
"We've also created what we call a virtual invoice, where we can show what costs are being assigned from, for example, IT to various areas. Its starting the process of showing what people are consuming in terms of expenses and, hopefully, changing employees' cost behavior," says Joynt.
Being able to drill down into the details behind reported numbers adds value to the analysis. Robertson says, "A real benefit of the reporting is, if there is an issue, we can dissect the expense into various pieces to see where it's come from and determine if that's appropriate or not. I'm able to easily answer questions regarding the data, whereas in the past, if we got a question about the data, probably 50% or 60% of the time we were not able to answer it because the system was just not able to do it. And now, with BusinessObjects EPM, we are able to answer those questions."
CUMIS is still in the early stages of its EPM deployment. Joynt says, "We're rolling out reporting to the senior management team, the VP level, to all department managers, and to actuaries." Despite a cultural shift in adjusting to the acceptance of ABC, overall response is positive, as executives discover greater insights into their costs, especially which are the significant activities driving their costs. Joynt says, "We've had very favorable feedback from the expense information we've shared with senior management, like the ability to drill down to see where expenses are coming from, and what the activity expenses are. They've been very impressed with the functionality of the reporting." He notes that VPs, product managers, and actuaries are very pleased with the accuracy and depth of reporting. "They've been saying this is exactly what we wanted to see."
Joynt notes, "It's critical to know which products are actually making money and which products are losing money, because if you have a wrong picture of profitability, you can be making terribly wrong decisions." With Business Objects, CUMIS can be confident it's got current, consistent, and accurate data for making decisions.
Quick Facts
- Industry:
Financial Services - Business Pain:
CUMIS lacked visibility into expense data and needed a secure reporting solution that would support its ABC model. - Why Business Objects:
Business Objects offers the insightful reporting, security, and ABC functionality CUMIS requires. - Business Objects products and solutions:
BusinessObjects EPM