Saab's journey into the future with
Mercur Business Control

How would the existing system for customer contracts for the Gripen projects be replaced? This was a constant topic of discussion for Saab. After many years of discussion, the choice fell to Mercur. After the first phase was implemented, Mercur Business Control usage was expanded to support analysis, budgeting and forecasting.

Background

Saab Aeronautics in Linköping needed to replace an ageing supply chain contracts management system and had decided to develop its new application on an existing in house solution. The steering committee had chosen their direction and was about to procure the new application when a telephone call from Mercur changed their direction. The result of that telephone call resulted in Mercur being selected to deliver the solution to replace the old contracts system 

The reason a new system was needed was that the existing system was ageing but critical to the Gripen project. The system was a 35-year one-user system without the possibility of development and modernization. Whilst Gripen was looking for a new contracts support system, a need was emerging for a Business Intelligence System to address the analytical and reporting needs of the business area's finance department.

Saab Aeronautics had two needs; firstly to be able to manage the individual contract / business for progress reporting to their customers and to strengthen internal business controls at Saab, secondly Saab needed to be able to compile and analyze business plans, budgets and forecasts for all contracts in the business area.

Mercur met the needs of both business imperative. Following the selection of Mercur, a working group was created consisting of one project manager and two sub-project managers with responsibility for each stream being, Ulrika Klaar, Business Management Gripen and Cecilia Wilhelmsson, Controller in the business area finance department at Saab Aeronautics.

 

"We feel that Mercur is a flexible system and we see many new uses where Mercur can improve and streamline business management and decision-making."

Ulrika Klaar, Business Manager Gripen

 

New structure for contract management

The foundational structure for the contract management solution is based on the detailed purchase contracts where all details of the Gripen agreement are entered. To be able to anlayse and manage those contracts , they are based on cost outcomes and revenues as well as a forecasted values. Saab effectively built a multi dimensional contract management application within Mercur

Due to the unlimitedmulti dimensionality available within Mercur the individual dimensions of the contracts such as price, product or part, business area and price adjustment index are reported in Mercur. The information can then be analyzed and broken into different perspectives.
 

Manual, time-consuming process in Excel

Aeronautics, which is a distinct business area within Saab, also needed information on the status of the Gripen contracts, but from a different perspective. Saab's contracts are extensive both in terms of operations and elapsed time, they can be identified as "companies within the company". The profit per contract is analyzed down to gross profit, cash flow management and cashflow forecast is analysed and certain balance sheet items surfaced and reviewed.

Before Mercur, this introduced a time consuming, laborious, manual process with Excel as solution support these exercises. To build, maintain and analyzethe budget and forecast for all contracts, there were about 70 files with 15 tabs in each linked to a compilation. There was an unacceptable amount of time to manage these excel files and the risk of incorrect information being delivered to the executive and business managers.

The analysis of the detailed information collected was also time consuming. Therefore, a support system was needed to collect data for business plans, budgets and forecasts and to be able to analyze outcomes in relation to budget and forecasts.
 

Three strong advantages of Mercur

... according to Ulrika Klaar at Saab: 

  1. It is a flexible system, the information blocks can be assembled into structures, which suited us

  2. It is ‘Excel like’, which is an advantage when dealing with business analysts or accountants, they love Excel and are happy to use it for everything.

  3. It is easy to build your own reports, which is necessary as you make adjustments.
     

Easy to use reports 

In order to build the contract forecasts, controllers in the business submitted information to Mercur regards expected new order intake, invoicing and resulting costs in the contracts. Based on this, sales, project result and project margins, balance sheet items, order backlog and cash flow are calculated.

Everyone involved, in the business and in the finance department, can then compare and analyze outcomes, budgets and forecasts in easy-to-use reports.

 

"Set aside a lot of time, it takes more time than you think. Think outside the framework, think about structures. Think user-friendliness right from the start! Have a clearly identified project manager internally for the entire project. And anchor them in the organization at an early stage."

... the best tips for a successful implementation from Ulrika Klaar and Cecilia Wilhelmsson

 

Wins with Mercur

The biggest gains Saab has experienced with Mercur is the achievement of more efficient and stronger quality-assured processes as well as a much more robust analysis of their budgets, plans and forecasts.

Less utilization of Excel and standardized input forms have accelerated the finance processes and reduced cycles by several weeks. The information within the Mercur system is "owned" by the person entering it and everyone has access to the information. This is far from the previous situation when data was manually moved from Excel to the single-user system and where only one person could generate reports.

The possibilities for analysis have become better and faster. Summing can be done at different levels, the information can be ‘sliced and diced’ in different ways and there is drill-down functionality. The benefits are felt both in the finance department and for controllers in the business.

 

After the introduction of Mercur, the controller role has been developed

- from being a collector of information, to an analytical role!

 

The next step for Saab

Saab has already moved on since the first year of implementation and has begun using Mercur for more than what was envisioned or their primary goal. There is much more functionality in the system that can be utilized. In the reporting area, Saab will now invest in delivering easy-to-use and consume standard reports in a presentation-friendly format.

Since many individuals and departments are involved in budgeting, forecasting and business planning, the functionality for workflow control will provide greater visibility and process management in the future. To date the contract budgets and forecasts have mainly been handled in Mercur, now the project will expand to deliver complete income statements and balance sheets reporting and analysis.
 

Mercurs solution

System: Mercur Business Control
Processes: Contract management Budgeting Forecasting Analysis Business planning
The introduction of Mercur: Project commencement in January 2013 and the system went live/production August 2013.
 

About Saab 

About: Saab offers world-leading solutions, products and services for military defense and civilian security. Saab Aeronautics, with operations primarily in Linköping, is one of Saab's business areas. The business area develops and manufactures the fighter aircraft Gripen. Aeronautics also manufactures aircraft components for civilian passenger aircraft and is a subcontractor to commercial aircraft manufacturers. Their product portfolio also includes an unmanned helicopter system. 

Turnover: 70 267 MSEK (2019).
Aeronautics’ sales represent about 27% of Saab’s total turnover
 
Total employees: ca 3 073 (2019)

 

 

 

 

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