Johannesburg, 06 Sep 2005
Durban-based manufacturing giant Feltex Holdings has maximised the flexibility of its financial budgeting and management information system (MIS) application, idu-Concept, during a major acquisition trail that has more than doubled the company`s earnings in the past five years.
The R1.2 billion company has business interests in the automotive, footwear and leather industries as a major supplier to local and international markets. The company became part of KAP International`s South African business empire in 2004, and has expanded through joint ventures and acquisitions to comprise a diverse spectrum of divisions and subsidiaries.
In 2002 the pace at which Feltex was growing was putting pressure on the company`s internal Excel-based financial reporting processes, and it was clear a more user-friendly, adaptable system was required to improve finance budgeting and management reporting efficiencies.
"We had an urgent need to convert our ERP system`s detailed general ledger data into a usable format on a monthly reporting system and give us the flexibility to adapt our budgets to the changing structures of our group," says Rob Bowden, executive director at Feltex. "We required a financial reporting system that was user-friendly, customisable and locally based for support and licence costs."
In February 2002, Cape-based finance budgeting and product development specialist idu Software implemented idu-Concept throughout much of the company, seamlessly accommodating the financial reporting, forecasting and budgeting for the various companies and divisions in Feltex.
Designed to enhance and improve the budget, monthly forecast capture and reporting processes, idu-Concept is a Web-based packaged solution ingenuous in eliminating the iterative process inherent in spreadsheet-type environments. The architecture of the software and the intuitive nature of the client front-end ensure maximum transparency in the budgeting, forecasting and reporting process, enabling cost centre managers to achieve the required responsibility and accountability for the financial reporting process without the complication of typical accounting environments.
Bowden says idu-Concept`s MIS capability is particularly useful to Feltex, providing a two-way interface across the budget, forecast and ERP systems general ledgers and adding to the ease of reporting.
The MIS builds on the advances achieved through the software`s browser interface, delivering a module to allow reporting of daily, weekly and monthly financial information to managers via the Web.
The facility includes a drill-down capability that allows analysis at a transactional level. Reports provide important details for current month, year to date and variance analysis against budget and forecast as well as comparisons with the previous year`s figures. Adverse variances outside acceptable limits are automatically highlighted, and the system has a facility to capture explanations and comments.
The idu-Concept solution also provides a consolidation tool in the MIS summary module, enabling top management to analyse the business from a financial and structural perspective. Drill-down tools allow the identification and analysis of business areas responsible for significant variances down to underlying transactional detail.
idu-Concept interfaces with a number of ERP general ledger applications throughout the various business units in Feltex, including BPCS, Compact and Syspro.
"Using idu-Concept as the backbone, we`ve designed our own monthly financial reports which come linked and mapped out of the ERP systems into our customised idu-Concept system. As the business uses a decentralised business model with operational management responsible for profit, we restructured our idu-Concept reporting system so that each business unit would produce a full set of financial reports, not only for profit analysis but also for comparisons of working and fixed capital investment. The consolidation is conducted at several different levels, so our reports automatically reflect the ratio of financial returns per business unit," says Bowden.
idu Software has developed a facility to export data out of idu-Concept to accommodate additional reporting requirements of KAP International.
"Feltex has been a great example of the strength and flexibility of idu-Concept," says Margie Edwards, IDU Software`s KZN regional manager.
"The expandability of the application has enabled Feltex to add business units to the system as the company has expanded, and to restructure its reporting format with ease to accommodate its ongoing expansion programme. Within 15 days of acquiring a new subsidiary, Feltex can have all the entity`s data reflected in idu-Concept, incorporated into group reporting and have the subsidiary reporting its own numbers using the Feltex standard report formats, irrespective of the underlying ERP general ledger application."
The various ERP systems that support the diverse manufacturing and distribution disciplines in Feltex each generate comprehensive general ledgers applicable to their respective industries.
Extracting and mapping the content of these ERP-based general ledgers into a unifying financial reporting system was the challenge faced by the company but, says Hollins, the idu-Concept team and Feltex IS department were impressed with how well each ledger was assimilated.
The daily updates from the relative business units and their ERP systems are collated and updated into the single idu-Concept database on a server located at the Feltex head office in Durban.
"The idu-Concept team continues to work closely with the Feltex IS department on both the technical and ERP-related issues and this teamwork has delivered a smooth and genuinely trouble-free implementation and an error-free live system," says Hollins.
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