Insync 10 Project cashflow report presentation aug10 1

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Project cashflow Reporting and Forecasting at Lend Lease

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  • Guidelines This sketch represents the Aurora Place project in Sydney, Australia. This sketch was the original one that was created by the Architect Renzo Piano as his idea for the building. This sketch can only be used with similar images of Aurora Place.
  • Page Lend Lease Corporation Orientation 2010 Facilitator Guide Point Key Message Learning Activity ~ Time 1. We create assets which are sustainable, healthy workplaces, and innovative in design and construction We create Place – not just a suburb Delfin LL facilitates economic development - not ‘dormitory’ suburbs Lend Lease does more Facilitated Discussion Give an example as the next segment allows the participants to explain what they do 15 mins
  • Photo: Grand canyon, Harbour bridge, London Bridge, (NY bridge) The Bridge Platform facilitates: 1. Coordination amongst knowledge workers 2. Manage to outcomes 3. Guide workers on the ‘how’ 4. Easy access to relevant business information and documents 5. Identifies experts in situ 6. Capture information, for review, or for knowledge narrative 7. Quickly and cheaply adding or changing ‘activities’
  • Legal: Contract review, Litigation tracking, (Eloise reference), Safety: Basis of future incident management and compliance checking Human Resources: Performance objectives, bullying case, recruitment process, rehabilitation case management, Performance reviews, Relocations, New starter, Separation Approvals: International travel, consultants approval Risk: Finance: Investment Paper approvals, Accounts receivable, Accounts Payable Operational: Capex approvals, Root cause analysis, Conversion approvals, Conveyancing ICT: Procurement, Project Framework approvals
  • Photo: Grand canyon, Harbour bridge, London Bridge, (NY bridge) The Bridge Platform facilitates: 1. Coordination amongst knowledge workers 2. Manage to outcomes 3. Guide workers on the ‘how’ 4. Easy access to relevant business information and documents 5. Identifies experts in situ 6. Capture information, for review, or for knowledge narrative 7. Quickly and cheaply adding or changing ‘activities’
  • Guidelines This sketch represents the Aurora Place project in Sydney, Australia. This sketch was the original one that was created by the Architect Renzo Piano as his idea for the building. This sketch can only be used with similar images of Aurora Place.
  • Insync 10 Project cashflow report presentation aug10 1

    1. 1. Project Cash flow Reporting and Forecasting at Lend Lease Prepared by: Ken Salmon 16 August 2010
    2. 2. Agenda <ul><li>Introduction </li></ul><ul><ul><li>Who am I? </li></ul></ul><ul><ul><li>Who is Lend Lease? </li></ul></ul><ul><ul><li>What does our Oracle environment look like? </li></ul></ul><ul><li>The business problem (Why project cash flow reporting/forecasting?) </li></ul><ul><li>Our project cash flow solution </li></ul><ul><ul><li>Process overview </li></ul></ul><ul><ul><li>Spreadsheet demo </li></ul></ul><ul><li>Alternative approaches to cash flow reporting/forecasting </li></ul><ul><li>Questions </li></ul>
    3. 3. Experience with Oracle applications <ul><li>Worked with Oracle applications for 13 years </li></ul><ul><li>Started my Oracle applications journey as an accountant </li></ul><ul><li>Implemented and supported Oracle applications at sites throughout APAC </li></ul><ul><li>Lend Lease employee: 2 years </li></ul><ul><li>Current role: delivering business solutions to customers in Lend Lease’s communities business primarily through Oracle applications </li></ul>
    4. 4. Lend Lease A global fully integrated property group <ul><li>Established in 1958 </li></ul><ul><li>Headquartered in Sydney, Australia </li></ul><ul><li>Listed on Australian Securities Exchange (ASX:LLC) </li></ul><ul><li>Global, fully integrated property group </li></ul><ul><ul><li>Development Management </li></ul></ul><ul><ul><li>Investment Management </li></ul></ul><ul><ul><li>Project Management & Construction </li></ul></ul><ul><ul><li>Asset & Property Management </li></ul></ul><ul><li>Operations in more than 30 countries </li></ul><ul><li>Four key regions: </li></ul><ul><ul><li>Asia </li></ul></ul><ul><ul><li>Australia </li></ul></ul><ul><ul><li>EMEA (Europe, Middle East and Africa) </li></ul></ul><ul><ul><li>Americas </li></ul></ul>Numbers as at 31 December 2009 A$5.6 billion Operating revenue A$8.4 billion Funds under management A$9.3 billion Retail assets under management Circa A$4.6 billion Market capitalisation 10,000+ Employees globally
    5. 5. Some of our key projects Shanghai Pavilion, Singapore Trump Tower, US The new Royal Children’s Hospital, VIC Barangaroo South, NSW MidCity, NSW Darling Quarter, NSW Ropes Crossing, NSW Brisbane Supreme Court and District Courts, QLD
    6. 6. Oracle at Lend Lease <ul><li>1997 - initial implementation 2005 – upgraded to 11i </li></ul><ul><li>Currently on version 11.5.10 CU2 </li></ul><ul><li>Core financials and projects, iExpenses and property manager implemented </li></ul><ul><li>Moderate to high level of customisation </li></ul><ul><li>ERP systems vary across location and businesses </li></ul><ul><li>Hyperion Performance Management Reporting used for operational reporting from the eBusiness suite </li></ul><ul><li>Hyperion financial management used for financial reporting and consolidation across multiple ERP’s </li></ul><ul><li>In Australia we have two set’s of books, one for Bovis Lend Lease and another for Lend Lease’s communities business and corporate functions </li></ul>
    7. 7. The customer <ul><li>Australian communities business </li></ul><ul><ul><li>Apartment living (Vivas Lend Lease) </li></ul></ul><ul><ul><ul><li>Victoria Harbour (Melbourne) </li></ul></ul></ul><ul><ul><ul><li>Jacksons Landing (Sydney) </li></ul></ul></ul><ul><ul><ul><li>St Patricks (Sydney) </li></ul></ul></ul><ul><ul><li>Master planned residential subdivisions - (Delfin Lend Lease) </li></ul></ul><ul><ul><ul><li>Laurimar (Melbourne) </li></ul></ul></ul><ul><ul><ul><li>Springfield lakes (Brisbane) </li></ul></ul></ul><ul><ul><ul><li>Rouse Hill (Sydney) </li></ul></ul></ul><ul><ul><ul><li>Mawson Lakes (Adelaide) </li></ul></ul></ul><ul><ul><ul><li>Springbank Rise (ACT) </li></ul></ul></ul><ul><ul><ul><li>Fairway Waters (Darwin) </li></ul></ul></ul><ul><ul><ul><li>Alkimos (Perth) </li></ul></ul></ul>
    8. 8. The business problem <ul><li>Users wanted to analyse cash flow at a project and task level </li></ul><ul><li>Solution is designed for Lend Lease’s residential development business </li></ul><ul><li>Lend Lease is a ‘project’ organisation </li></ul><ul><li>Construction historically a ‘cash’ industry (revenue and costs ‘lumpy’ depending on stage of project) </li></ul><ul><li>GFC – imposed greater discipline around cash </li></ul><ul><li>Solution to enable management visibility on projects cash flow performance and future forecast cash needs </li></ul><ul><li>Focus on costs as opposed to revenue </li></ul><ul><li>Completed quarterly </li></ul>
    9. 9. Cash flow solution overview
    10. 10. Cash flow process
    11. 11. 1) Run extract process <ul><li>Complex </li></ul><ul><li>Process extracts data from Oracle AP, AR, GL, PO and Projects modules </li></ul><ul><li>Point in time snapshot </li></ul><ul><li>Stores data in a number of views and temporary and permanent tables </li></ul><ul><li>Data outdated as soon as another transaction is processed </li></ul>
    12. 12. 2) Save cost report <ul><li>Project level snapshot based on extract process (previous step) </li></ul><ul><li>Still accrual based </li></ul><ul><li>Baseline on which the cash flow reporting/forecasting process is based </li></ul><ul><li>Multiple versions can exist simultaneously based on different extract versions </li></ul>
    13. 13. 3) Download cost report version to spreadsheet <ul><li>Based on saved cost report </li></ul><ul><li>Changes data from ‘accrual’ to ‘cash’ basis </li></ul><ul><li>Monthly periods on a two year rolling time frame </li></ul><ul><li>Months broken into ‘actual’ and ‘forecast’ periods </li></ul><ul><li>Populated by cost report, forecast populated by prior forecast </li></ul><ul><li>Spreadsheet does not download tasks where FFC = LTD certified </li></ul><ul><li>Track expenditures through the following stages: </li></ul><ul><ul><li>Uncommitted </li></ul></ul><ul><ul><li>Committed </li></ul></ul><ul><ul><li>Certified </li></ul></ul><ul><ul><li>Cash </li></ul></ul><ul><ul><li>FFC </li></ul></ul>
    14. 14. 3) Download cost report version to spreadsheet (cont)
    15. 15. 3) Download cost report version to spreadsheet (cont)
    16. 16. 4) Update forecast data (spreadsheet demo)
    17. 17. 5) Upload forecast spreadsheet <ul><li>Saves forecast data back to database </li></ul><ul><li>Baselines forecast as QPR or BP </li></ul><ul><li>Forms basis of hyperion cash flow reports </li></ul><ul><li>Populates forecast columns of next spreadsheet download </li></ul>
    18. 18. Issues with the solution <ul><li>Difficult to Support </li></ul><ul><ul><ul><li>Complex </li></ul></ul></ul><ul><ul><ul><li>Wide range of skills required for support </li></ul></ul></ul><ul><li>Limited understanding by users ie ‘Black Box’ </li></ul><ul><li>Inflexible time frames </li></ul><ul><li>Only at project level – does not consolidate across projects </li></ul><ul><li>Despite this, the solution has been widely accepted, stable and welcomed by the business, because it has enabled more precise management of project cash flows. </li></ul>
    19. 19. Other possible approaches <ul><li>Alternative custom solution </li></ul><ul><li>Attach cash flow category to each GL natural account value via DFF </li></ul>Natural Account Number Natural Account Desc Cash flow Desc (DFF) 410450 Wages and Salaries Payments to Employees 100010 Sales Receipts from Customers 410475 Telephone Exp Payments to Suppliers 200000 Misc Tools Payments to Suppliers
    20. 20. Other possible approaches (cont) <ul><li>Custom solution to track back from every payment/receipt to the </li></ul><ul><li>related AR/ AP invoice distribution’s natural account </li></ul>Result should tie back to bank account movement
    21. 21. Other possible approaches (cont) <ul><li>Standard Oracle Cash Management </li></ul><ul><li>Initial Cash position from bank reconciliation process </li></ul><ul><li>Based on user defined templates </li></ul><ul><ul><li>Columns = periods </li></ul></ul><ul><ul><li>Rows = sources of cash inflows and outflows </li></ul></ul><ul><li>Forecast cash flows from all modules (includes projects) </li></ul><ul><li>Forecasting open interface available for external systems </li></ul>
    22. 22. Conclusion <ul><li>About Lend Lease </li></ul><ul><li>Business context </li></ul><ul><li>Business problem </li></ul><ul><li>Lend Lease’s communities business custom cash flow forecasting solution </li></ul><ul><li>Other possible cash flow solutions </li></ul>
    23. 23. Conclusion Questions? “ Cash is the oxygen of business, because unless cash is available to pay bills when needed, the business might be unable to operate or close its doors – even if profits are being made” www. business .vic.gov.au <ul><li>Cash flow forecasting and management is important because it: </li></ul><ul><ul><li>Allows company’s to ensure liquidity </li></ul></ul><ul><ul><li>Minimise borrowing costs </li></ul></ul><ul><ul><li>Maximise income from short term investments </li></ul></ul><ul><ul><li>Manage financial risks </li></ul></ul>
    24. 24. Project Cash flow Reporting and Forecasting at Lend Lease Prepared by: Ken Salmon 16 August 2010

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