airbus_centralize finance systems
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Finance SystemasTRANSCRIPT
Case Study: How Airbus’ New, Centralized Finance System Effectively Supports Multiple Subsidiaries Across
© 2012 Wellesley Information Services. All rights reserved.
Subsidiaries Across EuropePhilipp VisotschnigAirbus SAS
In This Session …
Development of a new, centralized, financial platform that consists of a unified accounting system as well as unified rules and procedures.
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A company-wide initiative to better integrate local SAP-based financial systems, deliver leaner financial processes, and better serve the business through new financial standards.
The steps taken by Airbus to ensure that its financial and IT infrastructure supports all of its sites and subsidiaries across
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infrastructure supports all of its sites and subsidiaries across Europe.
How Airbus closes the gaps that can commonly exist between finance and IT departments.
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What We’ll Cover …
• Airbus at a Glance• Airbus Finance Transformation• PACE+ (Prepare Airbus Company European)• Wrap-up
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Airbus as a Company
• Major subsidiary of EADS – a global leader in aerospace, defence and related services. In 2011, the Group (comprising Airbus, Astrium, Cassidian and Eurocopter) generated revenues of € 49.1 billion and employed a workforce of more than 133 000billion and employed a workforce of more than 133,000.
• A380 – Most spacious and efficient large aircraft in service today• SA / LR – Best selling families of commercial jets• A350 XWB – Extra wide body, medium capacity, long-range y, p y, g g
aircraft. Launched in 2006, currently in development.• A400M – Versatile airlifter, a larger, more modern, more flexible
aircraft specifically designed to fill the logistical/tactical gap
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The Airbus Family
11,570 orders420 customers
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7,125 delivered to date534 delivered in 2011
and many others …
Airbus Around the World
320 languages
7 0000
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1 global company
3 customer support centres
4 training centres
5 spares centres
9 engineering design centres
16 manufacturing sites
24 hour customer support (365 days a year)50 flight simulators
almost 100 nationalities
160 offices
420 customers 250 resident customer support managers
341 operators
More than 7,0000 aircraft delivered
69,300 employees
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Airbus Production
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POWER8 BOARDPOWER8 BOARD
EXECUTIVE COMMITTEEOverall Company PerformanceEXECUTIVE COMMITTEEOverall Company Performance
Airbus Overall Governance
Fabrice Brégier*COO
*
Tom EndersPresident
John LeahyCOO
Domingo Urena Raso
Tom WilliamsPrograms
Harald WilhelmCOO
Günter ButschekExecutive VPOperations
Charles ChampionExecutive VPEngineering
Klaus RichterExecutive VPProcurement
*
*
*
President & CEO
COOCustomers
Urena RasoAirbus Military
Programs WilhelmCFO
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OTHER
SA LR LA A350 A400MAlain
FlourensDidier Evrard
Daniel Baubil
Patrick Piedrafita
Cedric Gautier
* EC Member
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2011 Financial Results
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EADS Vision 2020
• Be the worldwide leader in air and space platforms and systems with a complete portfolio of products, both commercial and governmentalAchieve best in class operational and financial efficiency to reach • Achieve best-in-class operational and financial efficiency to reach 10% EBIT in the first half of the decade 2010-2020
• Achieve around € 80bn turnover by 2020 and reach a 50/50 balance in Airbus and other Divisions’ revenues
• Achieve a 25% services share of business by 2020 hence € 20 bn• Become a true global industrial company with 40% of EADS
sourcing and 20% of EADS employees outside of Europe. Achieve $ 10bn revenues in North America in non-Airbus businesses and gain a prime position with US Government.
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Next — A350
• It is the first true cross-functional and transnational project in Airbus
• True partnerships with our suppliersE li i l t d j i t d l t ki t th i Earlier involvement and joint development working together in a plateau approach as one extended teamShared investments with close partners and increased industrial cooperation worldwide
• Closer relationships with our customers
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What We’ll Cover …
• Airbus at a Glance• Airbus Finance Transformation• PACE+ (Prepare Airbus Company European)• Wrap-up
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Finance Integration Master Plan (1/3): Merger
Level ofintegration
EADS Future
PACE+Prepare Airbus Company EuropeanA new start to build the future
Finance operational integration in Airbus
New Organization
Zephyr & Globalization
MilitaryIntegration
Airbus full transnational organizationRestructuring (Power8) Savings = € 2.9 bn
Build a greater cost efficiency and further integrate AirbusFocus on CoreSubsidiary IntegrationFinance subsidiary integration
Accounting, Controlling, Treasury & C ti C t I t ti
Program integration for A400M, Tanker
Common references for plan and actual information
12MergerMerger
Time
2001 2003 2005 2007 2009
Airbus Merger
PACE
2013
& Costing Corporate Integration Support of Finance operations and Business Control
Stop transfer pricing for common business within 4 Airbus entitiesSharing of common result according to industrial key
Launch of new aircraft projects (A380 / A400M) requires integration of development and manufacturing processes of previously separate national entities into a fully European company = Creation of Airbus
Finance Integration Master Plan (2/3): Restructuring (Power8)
Level ofintegration
EADS Future
PACE+Prepare Airbus Company EuropeanA new start to build the future
Finance operational integration in Airbus
New Organization
Zephyr & Globalization
MilitaryIntegration
Airbus full transnational organizationRestructuring (Power8) Savings = € 2.9 bn
Build a greater cost efficiency and further integrate AirbusFocus on CoreSubsidiary IntegrationFinance subsidiary integration
Accounting, Controlling, Treasury & C ti C t I t ti
Program integration for A400M, Tanker
Common references for plan and actual information
13MergerMerger Restructuring (Power8)Restructuring (Power8)
Time
2001 2003 2005 2007 2009
Airbus Merger
PACE
2013
& Costing Corporate Integration Support of Finance operations and Business Control
Stop transfer pricing for common business within 4 Airbus entitiesSharing of common result according to industrial key
Launch of new aircraft projects (A380/A400M) requires integration of development and manufacturing processes of previously separate national entities into a fully European company = Creation of Airbus
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Airbus Finance TransformationAxis of Strategic Development Achieved Next Steps
Analyze & Reposition Airbus vs. Peers/Value Chain:PricingCost
Capital Employed
SA RC reduction (on-going)
Pricing Recovery
A350 TargetingNRC Benchmark
Move from Deviation Analysis to Risk Anticipation/Mitigation & Opportunity Materialization
A320 NEO (on-going)
A350 De-Risking (on-going)
Risk Evolution/Target (on-going)
Support Airbus Globalization Efforts &Reduce $ Dependency Natural Hedging
Low Cost (on-going)
Secure Smart Financing and Minimize Exposure/Risk Financial Exposure 2008/09/10
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Secure Smart Financing and Minimize Exposure/Risk p
Support Services Development FHS Financing/Business Case (on-going)
Apply Lean Processes in Finance
Anticipate Changes in the Global Business Model
AFIT
Simplified Budgeting
New AOP Process
PACE+ (on-going)
Savings Achievements to Date
Finance Headcount Business Complexity
1.500
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EIS A380A350 MG3 Zephyr Airbus MilitaryIntegration
500+a/cdeliveries
380 a/cdeliveries
20102009200820072006
1.000
2011
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Finance Integration Master Plan (3/3): PACE+
Level ofintegration
EADS Future
PACE+Prepare Airbus Company EuropeanA new start to build the future
Finance operational integration in Airbus
New Organization
Zephyr & Globalization
MilitaryIntegration
Airbus full transnational organizationRestructuring (Power8) Savings = € 2.9 bn
Build a greater cost efficiency and further integrate AirbusFocus on CoreSubsidiary IntegrationFinance subsidiary integration
Accounting, Controlling, Treasury & C ti C t I t ti
Program integration for A400M, Tanker
Common references for plan and actual information
16MergerMerger Restructuring (Power8)Restructuring (Power8) PACE+PACE+
Time
2001 2003 2005 2007 2009
Airbus Merger
PACE
2013
& Costing Corporate Integration Support of Finance operations and Business Control
Stop transfer pricing for common business within 4 Airbus entitiesSharing of common result according to industrial key
Launch of new aircraft projects (A380/A400M) requires integration of development and manufacturing processes of previously separate national entities into a fully European company = Creation of Airbus
What We’ll Cover …
• Airbus at a Glance• Airbus Finance Transformation• PACE+ (Prepare Airbus Company European)• Wrap-up
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Evolution of Finance System Until Today
Integrated management accounting
Common structures & mapping into commonP&L and Balance Sheet for consolidated AirbusGroup Financial Statement (Tool: SAP BCS)
Economic profit for planning and Actuals onAirbus Group level broken down by program
Integrated Planning (AOP) approach (Tool Corporate Planning And Simulation System; SAP NetWeaver® BW/BPS)
Corporate
CUC, CCC, APA(Airbus Operation Planning, Actuals,
Forecast)
Integrated management accountingfor Airbus group across all Cost Centreand Cost Unit Costs aligned to Financial Statements consolidation(Tool: Cost Center Ctrl. (CUC) and Cost Unit Ctrl. (CCC))
Integrated inventory controllingaligned with operational drivers
Change of flat rate controllingand implementation of Cost Unit controlling by source currency
Implementation of Airbus group reportingenvironment for programme P&L
(Plan vs. Actual comparison)
Integrated Controlling of Cost Naturealigned with destination views on
periodical basis (e.g., CoE / Functions Scorecards)
Introduction of CAPEX controlling and reporting aligned with Operations
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Operations
g y y
Change of flat rate controlling and implementation of Cost Unit controlling by source currency
Introduction of Commitments in Management Accounting aligned with Procurement
Gaps to Close
• Continuation of the path to integrate Airbus into a European Company
• Airbus launched a strong initiative (ARP) to standardize and integrate major operational processes (procurement logistics manufacturing major operational processes (procurement, logistics, manufacturing, etc.). Finance to be part of it in order to adhere to operations and get the benefits of function integration.
• Borders between Finance tools – today based on entity legacy systems –lead to delayed data availability and lack of drill-down capability for transnational organization.
• The monthly availability date of management reporting must be • The monthly availability date of management reporting must be shortened, keeping a strong focus on quality
• Changes in Airbus business model are group-driven (organization, Zephyr, Military Integration, etc.). Current setup multiplies the adaptation effort by the number of operating financial systems in place.
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Key Financial Deliverables
• Single, unified accounting system for General Ledger, Cash Management, Cost Accounting, Accounting Transaction
Standard Chart of Accounts and Master DataStandardized and harmonized Cost Accounting and Stock/WIP Standardized and harmonized Cost Accounting and Stock/WIP Valuation
• Operational and Corporate ReportingAutomated from shop floor to corporate around common indicator structureAutomated reporting by exception and data mining (Business Intelligence)Intelligence)
• Strong streamlined accounting organization and lean accounting processes (Specialization/Centralization of Functionality/Pooling of resources)
• Enhanced lean closing (fast, light) and consolidation processes and tools 20
ARP Supply Chain & Logistics – from Local to Integrated
Initial Situation(2005)
Integration of SC & L
(2013/14)
Current Situation(2011/2)
Integration of Manufacturing
(2014+)
Legacy Systems Retirement
A380 FAL and A350 CA
Full Procurement and Logistics Harmonization
F llAll Programs/ O ti i
P d tProduct
AssemblyA380,
MCA/CA A350
Product Structure
A380&A350
Supply Chain All Programs
Assembly SA&LR
Product Structure
SA&LR
Logistics All Programs
Supply Chain All Programs
Assembly SA&LR
Product Structure
SA&LR
Logistics All Programs
Supply Chain All Programs
Assembly SA&LR
Product Structure
SA&LR
Logistics All Programs
Supply Chain All Programs
Assembly SA&LR
Product Structure
SA&LR
Logistics All Programs
cal S
AP S
yste
ms
Logistics All Programs
Supply Chain All Programs
AssemblyA380,
A350 & A400M*
ProductStructure
A380, A350& A400M
Manage Finance
Supply Chain All Programs
Assembly SA&LR
Product Structure
SA&LR
Logistics All Programs
Supply Chain All Programs
Assembly SA&LR
Product Structure
SA&LR
Logistics All Programs
Supply Chain All Programs
Assembly SA&LR
Product Structure
SA&LR
Logistics All Programs
Supply Chain All Programs
Assembly SA&LR
Product Structure
SA&LR
Logistics All Programs
Logistics All Programs
Supply Chain All Programs
AssemblyA380,
A350 & A400M*
ProductStructure
A380, A350& A400M
ManufacturingAll Programs Logistics
All Programs
Supply Chain All Programs
AssemblyAll Programs
ProductStructure
AllPrograms
ARP
A350 CAs implemented
gFlows
implemented
Full Manufacturing
Operations in ARP
21Local SAP Systems
ARP
Assembly SA&LR
Product Structure
SA&LRManufacturing All Programs
Assembly SA&LR
Product Structure
SA&LRManufacturing All Programs
Assembly SA&LR
Product Structure
SA&LRManufacturing All Programs
Assembly SA&LR
Product Structure
SA&LRManufacturing All Programs
All Programs
Manufacturing All Programs
Manage Finance
g
Manufacturing All Programs
Manage Finance
Manufacturing All Programs
Manage Finance
Manufacturing All Programs
Manage Finance
Loc All Programs
Manufacturing All Programs
Manage Finance
g
Manufacturing All Programs
Manage Finance
Manufacturing All Programs
Manage Finance
Manufacturing All Programs
Manage Finance Assembly SA&LR
Product Structure
SA&LR
Assembly SA&LR
Product Structure
SA&LR
Assembly SA&LR
Product Structure
SA&LR
Assembly SA&LR
Product Structure
SA&LR
Manage Finance
Manage Finance
ManufacturingAll Programs
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Target Architecture for ARP and PACE+
Master Data
PACE
PA
CE+
ARP Central Entity
PACE+(4 National Companies)
Supply Chain – all ProgramsLogistics – all Programs
Manufacturing – all ProgramsAssembly – A380, A350
Product structure – A380, A350
PACE+
Material Management/
Spares
olid
atio
n/C
orpo
rate
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E UK F DLegacy Systems
Con
so
PACE+ Deployment Starts in Five Streams
A. Business First• Process alignments according to PACE+ standards
Development & Deployment
Airbus Finance
Concept
Financial
PACE+ has framed Airbus Finance into 32 SpecBooks:
•Order-to-Cash•Procure-to-Pay•Cost Control•General Ledger
g gwith limited adaptations of legacy systems
B. Master data• Ramp up PACE+ Master Data model in one central
Master Data system utilizing existing ARP MD system
C. Central Entity Deployment• Bring PACE+ standards to CE by transformation of
existing systems
Airbus Finance Standards
D. ARP SC&L Finance• Deploy PACE+ Finance into ARP Exec
Financial Leading SystemDeployment of PACE+ functionalities into ARP
ARP becomes the Finance Leading System
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g•Close-to-Report
E. FACTS+ Consolidation• Build group application under sponsorship of EADS
2011 / 2012 2013+2010
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Business First Overview
Procure-to-PayImprove P-2-P GovernanceDeploy Goods Receipts for Services
RC Hours ManagementImplement an RC Hours Tracking System (Broughton)
PACE+ Business First
In-House Parts ControllingDefine a Financial Model for Elementary Parts
LEAN CPNImplement a simplified CPN/CPN+ Structure
Implement an RC Hours Tracking System (Broughton)
Cost Center RestructuringDefine Standards for CC Structure
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Hourly Rate CalculationImplement a Model for Hourly Rate Calculation
LEAN AOP/COPASS+Secure Lean Planning Process
What We’ll Cover …
• Airbus at a Glance• Airbus Finance Transformation• PACE+ (Prepare Airbus Company European)• Wrap-up
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What We Have Covered …
• Including all specificities of all Airbus entities from the beginning to ensure that its financial and IT infrastructure supports all of its sites and subsidiaries across Europe
• PACE+ as a way to integrate local SAP-based financial systems, deliver leaner financial processes, and better serve the business through new financial standards
• ARP as a centralized, financial platform that consists of a unified accounting system as well as unified rules and procedures
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Additional Resources
• EADS Global Web Sitewww.eads.com/eads/int/en.html
• Airbuswww.airbus.com
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Key Points to Take Home
• Step-by-step (evolving) integration instead of integration at once
• The driver is the business
• Intermediate, short- and medium-term projects paving the way toward key milestones
• No harmonization for the sake of harmonization, and only while maintaining local specificitiesmaintaining local specificities
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Your Turn!
How to contact me:Philipp Visotschnig
Continue the conversation! Post your questions on Insider Learning Network’s Forums
*bit.ly/FinancialsGRCForums
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