Johannesburg, 22 Feb 2006
Paper giant Sappi is improving its error logging, audit trail, security and reporting capabilities, and enhancing the stability of its database, with the implementation of Hyperion Financial Management from Intellient, a member of the EOH group of companies.
With complex consolidation and reporting requirements, multiple currencies, and the constant pressure of meeting tight deadlines, Sappi needed a Web-enabled solution that allows worldwide access to financial data and reports. The solution was required to enable rapid information availability, reporting flexibility and the creation of a single financial database.
"The implementation was also undertaken to address security inadequacies and to more effectively manage multi-currency conversions," says Laurence Newman, group financial controller and the Hyperion Financial Management project sponsor at Sappi.
"Added to this, our Hyperion Enterprise database was becoming too big and we needed a solution that could handle the volumes of data we work with smoothly and reliably. Our database is currently 12GB and contains our worldwide budgeting, forecasting, financial reporting and consolidation data."
Sappi is one of the world`s leading pulp and paper producers, with operations in eight regions on three continents, and customers in over 100 countries. For the year ended September 2004, it reported sales of US$4.728 billion. In terms of financial reporting, it has 25 sites in southern Africa, 28 in Europe, 12 in the US and nine elsewhere in the world. Sappi is listed on four stock exchanges, and as such must fulfil multiple regulatory reporting requirements, including South African Generally Accepted Accounting Principles (GAAP), US GAAP, US Securities and Exchange Commission (SEC) Disclosures and International Financial Reporting Standards.
Executive policy requires Sappi to produce a consolidated group income statement within 10 working days after month-end, and full management accounts in 15 working days. US SEC requirements require quarterly reporting, while Sappi`s international shareholders expect reports 30 to 45 days from closure of quarterly periods.
"Licensed for 196 users internationally, Hyperion Financial Management replaced Hyperion Enterprise Sappi had been using," says Marc Scheepbouwer, MD of local Hyperion distributor Intellient. "Sappi essentially outgrew Hyperion Enterprise and needed more security, better error logging, and audit trail capabilities, advanced capacity for multi-currency conversions, and the ability to handle larger database volumes. With Hyperion Financial Management, Sappi is not only addressing these needs, but is also benefiting from other features the product offers, such as the ability to input cell text commentary and line item detail over the Web. This ensures the right information is submitted the first time, thereby reducing the number of submission iterations done and increasing transparency."
Hyperion Financial Management enables Sappi to perform global collection, financial consolidation, reporting and analysis using only one product. Running against a relational database, the main Hyperion Financial Management application resides in Sappi`s head office in South Africa, with a second instance of the application located in Europe.
The company has three Windows-based servers in South Africa dedicated to running Hyperion Financial Management, while there are two similar servers running the application in Europe.
"Through no fault in the application, it was necessary to have Hyperion Financial Management implemented at two different sites," Newman says. "Due to the severe lack of bandwidth between South Africa and the rest of the world, our European and US offices had major problems accessing the servers here and we were forced to set up a similar technical arrangement in Europe to address this issue."
With Hyperion Financial Management, Sappi can enforce data integrity and reporting disciplines, while reducing cycles, reporting times and consolidation staff. The generation of cash flow statements is now automated and intercompany eliminations have been improved.
"Using Hyperion Financial Management, Sappi`s employees, subsidiaries, branch offices, and partners can now operate from the same page, with a single, unified view of key financial data at any moment in time," Scheepbouwer says. "The application enables Sappi to effectively anticipate change, measure performance and drive profitability with accurate, auditable and timely financial information. It also allows the company to comply with regulatory demands for centralised financial consolidation, reporting and analysis."
Sappi conducted its own in-house user training, while a consultant undertook the training at all its German-speaking operating units. The company plans to upgrade to the most recent version of Hyperion Financial Management at the end of this year.
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