Leroy Merlin Poland

The project involved the implementation of a comprehensive, centrally managed system to support the work of controlling in the areas of financial planning, budgeting, analysis and reporting.

Solution category

• Budgeting
• Raporting

Leroy Merlin is a chain of construction and decoration shops which started its activity in 1923 in France. Since 2006, the company has belonged to ADEO Group, one of the leaders in the DIY segment, and it has been present in Poland since 1994. Under the Leroy Merlin brand, there are 52 large-format hypermarkets located in almost every voivodship.

Controlling in Leroy Merlin is carried out at a very detailed level, and relying on Excel sheets was not effective - mistakes typical for Excel-based solutions appeared and managing the process was very laborious.

Challenge

"The multitude of spreadsheets, the different versions, the inconsistent data and the time spent on the data collection and aggregation process meant that instead of concentrating on analysis and inference, we mainly focused on data management and detecting random errors. The time has come to finally resolve these problems. We decided to build an entire system for budgeting and we did it together with Cogit." – Aleksandra Wróbel, Financial Process Specialist, Leroy Merlin Polska.

The main functions to be performed by the new system were encapsulated in the following points:

• detailing the existing method of reporting and budgeting,
• fast and secure work with financial data (eliminating laborious and error-prone spreadsheet-based solutions),
• generating consistent data without the need for its subsequent transformation into appropriate formats,
• ensuring business integrity of budgets and financial reporting,
• accurately monitor business results at every organizational level,
• conduct fast, effective multidimensional analyses, including comparisons of different versions of budgets vs actuals.

Solution

As a result of analysis and review of market solutions, it was decided to implement the Infor d/EPM (Infor Dynamic Enterprise Performance Management) system, which matched Leroy Merlin's requirements and offered the possibility of flexible development for the future.

The implementation assumed the development of a fully optimized version of the software, tailored to the needs of representatives of the financial management and management controllers of individual shops and other units.

From the client's perspective, time was of the essence - the implementation of the system had to enable the full planning process already in the same year.

Data Warehouse Implementation
In the first step, a universal, open structure of a Data Warehouse was prepared, which performs processes of data acquisition and processing for the needs of reporting and budgeting processes.
The structure of the Data Warehouse area allows for its development (it is possible to add data sources, Source-to-Target paths and new Data Marts). Thanks to the application of architectural layers it is possible to make individual stages of data loading and processing independent and the handling of the whole becomes much simpler.
Processes performed by the Data Warehouse are activated, parameterised and controlled through universal reports created in the Infor d/EPM system. Extending the Data Warehouse with new processes does not require modification of process operation screens.

Prototype implementation
The next step of the project was the implementation of the system prototype and its integration with other systems (through the developed Data Warehouse area). The task of the prototype was to adjust the system to the requirements and specifics of planning processes in the best possible way.
An agile method of working on the prototype was adopted (AGILE methodology). After modelling the basic requirements (in a form determined by the existing tools), subsequent cycles of meetings and prototype modifications were carried out. The goal of each subsequent stage of work was to implement subsequent functionalities - with emphasis on the most important features of the Infor d/EPM system.

Application development
As a result of work on the prototype, a coherent concept of controlling model based on Infor d/EPM application was created. The application consists of the following areas:

• Central model - used to forecast month close, year close and make an assumptions for next year. Less detailed data. Aggregates more detailed results from other models.
• Turnover, Margin and Inventory Planning Model - a model for planning at a very detailed level the following elements: turnover, margin and inventory. The data planned in this model automatically feeds the corresponding items in the Central Model.
• Advertising Model - centrally managed, allowing controllers to gather advertising expenditure expectations of individual shops and monitor the allocation of budgets.
• Fixed Assets Model - used to simulate the depreciation of fixed assets based on imported data.
• HR Cost Model - used to plan payroll costs and headcount while controlling productivity maintenance. Planning is carried out at the level of each employee, while selected cost items are developed at the shop or position level.

Knowledge transfer
Parallel to the launch of subsequent parts of the system, the client's employees were trained and prepared to take over the operation of the application. In addition to business functionalities, the Controlling department also took over competences in cyclical maintenance activities.

The implementation ended with a workshop session for users and system administrators. The involvement of business departments already at the concept stage allowed very fast transfer of the system to its users.

„Implementation of a controlling system can only be beneficial if it is based on partnership collaboration and understanding of needs. The aim of the implementation in the area of controlling is not to use a specific IT technology but effective transformation of data into useful business information adapted to the groups of recipients. The cooperation with a company that clearly defines its objectives - such as Leroy Merlin Polska - is a guarantee of the project's success.” - Jakub Cichocki, Consulting Director, Cogit.

Results

Cogit implemented a multi-level budgeting and reporting process at Leroy Merlin in just 6 months. Such a fast pace of work made it possible to use the system in the budgeting process already in the same year.

Thanks to the implementation, the organization can plan and forecast its activities with greater accuracy, and the budgeting processes are managed in a transparent and predictable way.

The majority of activities, which could not be performed without the involvement of IT resources, is now performed from the level of business departments. A great value of the solution is also its individualisation for specific persons or groups of recipients. Depending on the user's preferences, the system offers the possibility of working in a browser, a dedicated application or working on budgets in Excel matrices.