Comprehensive three-and ten-year rolling forecasts
are the foundation for strategic budgetary planning at Auckland University of Technology (AUT). These forecasts provide financial managers with the accurate, up-to-date information they need to set budgets and track performance. They are absolutely critical for all levels of planning and fundamental to efficient operation.

The forecasts, which combine estimated student numbers, staff salary costs and projected revenues, are also the basis for statutory reporting requirements, such as ‘Statement of Performance’ and ‘Statement of Position’.

Calculating these complex costing forecasts and preparing management reports can be a time-consuming task. But, thanks to IBM Cognos TM1, and assistance from the professional services team at Cortell,AUT has been able to automate its three-year forecast process and is now able to provide updated forecasts to upper-level management on an ongoing basis.

With an enrolment of close to 24,000 students, from 83 countries, spread across three campuses, and more than $227 million in total expenses in 2008 (before interest and finance charges), accurate, up-todate forecasts are an absolute necessity.

“Without the capabilities of TM1, preparing these detailed forecasts would be almost impossible,” says Megan Sweeney, finance manager of the Faculty of Business and Law.

“We have to factor in a wide variety of metrics, including current and projected staff salaries, estimated EFTS (equivalent full-time student) enrolments, subsidy levels, revenues and other data. Each metric has any number of variables that change over time. TM1 allows us to combine all of this data – through the use of a datamart linked to other enterprise applications such as EPICOR financials – and prepare reports specifically formatted for management. Because the process is automated, we can update our three- and ten-year  forecasts on a daily basis, providing near real-time analysis for decision-makers.”

Automating the process
“Before we had TM1, we couldn’t interface directly to applications such as financials, payroll and student management,” says Alex Zonneveld, system business
analyst at AUT.

“As input for the forecasts, we had to rely on batch files provided by the various departments and then prepare the forecasts using a spreadsheet. The process worked, but it took a major percentage of our time and the data wasn’t as up-to-date as we would have liked. Now, we have all of the business processes modelled inside TM1, so we can generate these forecasts automatically. And, to make it even better, we can prepare the final reports in Excel, so managers receive a familiar document they can immediately interpret.” 

                  

Cortell implements
To help AUT maximise its return on investment, it
selected Cortell as its technology partner for delivering
the TM1 solution.

“The team from Cortell quickly developed an
excellent understanding of our business drivers,”
explains Zonneveld.

“At the outset, they worked closely with us to
define exactly what we wanted to achieve. Once we had
specified the outcomes, they helped us build the initial
cubes. They also provided complete end-user training
and offered more advanced training to our group, so
we could perform some of the further development
work in-house.”

AUT’s relationship with Cortell started five years
ago with AUT’s acquisition of Cortell’s ValuMax activity-
based software.

“We selected ValuMax and Cortell because they
offered the most cost-effective solution and could
deliver their costing system in a short time-frame. As we worked with the software, and Cortell, we made the
decision to enhance our capabilities with more analysis
and integration functionality. Because ValuMax was
optimised to operate in conjunction with TM1, and
Cortell had the requisite expertise, it made sense to
base our cost-forecasting and analysis capabilities on
IBM Cognos TM1.”

Evolving capabilities
As with any enterprise application, the team at
AUT is continually adding new capabilities. “We were
able to link TM1 to our EPICOR GL financial package,
which gave us much more visibility into our forecasting
model,” says Zonneveld.

“We then had succeeding projects from which we
had to add data – from our ARION student management
system – for more accurate estimated EFTS
forecasts. After that, we brought in staff salary data
from the PayGlobal payroll system. Unfortunately, all
the number-crunching affected the performance of our
cubes under our initial configuration. So we upgraded
our architecture to 64-bit and created a new cube
strictly for salary forecasting. This has significantly
speeded-up the system and means that we can change
certain parameters to perform ‘what if ’ scenarios
quickly and easily.”

Cortell and AUT work together to develop new
applications. “We now have the skills in-house to support
TM1 for the most part,” concludes Zonneveld.
“But when we want to undertake a major enhancement,
such as building new cubes or adding new data
sources, we can call on Cortell. They can carry out the
tasks much faster than we could if we did it ourselves,
as we don’t have the resources for major development
projects.

“Plus, having external expertise provides continuity
in case we have any personnel changes within our
group. The people from Cortell have as good a
knowledge of our business processes as we do, and can provide ‘institutional memory’ that ensures the system will be supported if and when staff turn over. We’ve found that using external consultants such as Cortell is a very cost-effective exercise.”

For more information
Cortell
www.cortellgroup.co.nz
Belinda Johnson, Director
09 580 2200
Belinda.johnson@cortellgroup.com

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June 2009