Morgan Sindall Group implemented IBM Cognos Financial Statement Reporting (FSR) to automate and streamline their financial reporting process. FSR links their financial data in IBM Cognos Controller to Microsoft Word and Excel reports. This eliminated manual data entry errors and allowed multiple people to work collaboratively. It also saved time by reducing late changes and provided better version control than their previous gatekeeper process. Morgan Sindall expects ongoing benefits from reusing tagged variables and anticipates cost savings from reduced audit costs and not needing a dedicated gatekeeper.

1. IBM Software Construction / Architecture / Engineering
Business Analytics
Morgan Sindall Group plc
builds automated
financial reporting
Simplifying the creation of accurate and timely annual
and interim reports
Morgan Sindall Group plc is the holding company for a group of
leading businesses in the UK construction and regeneration industry,
Overview
including big names such as Morgan Sindall, Lovell, Overbury, Morgan
Business challenge Lovell and Muse Developments. The group has more than 7,000 full-
As a FTSE company, Morgan Sindall time employees and also manages thousands of subcontractors; it can
Group plc is required to publish full annual
and interim reports that comply with
have as many as 20,000 people working in its supply chain at any one
IFRS guidelines. Writing these reports time. It generated £2.1 billion in revenues in 2010, and achieved profits
was a mostly manual process, requiring before tax amortisation and non-recurring costs of £51.3 million.
many cycles of editing and checking. The
finance team wanted to find an easier,
more automated way to create and “Our business is structured in a very entrepreneurial manner,
manage these important documents, and our strategy is for each division in the group to operate quite
ensuring timely disclosure and eliminating independently,” comments Dan Engler, Group Finance Manager at
the risk of errors.
Morgan Sindall Group plc. “As a result, we keep our head office team
Solution very lean – we have about 25 people in total, including the directors,
Morgan Sindall’s finance team built and there are three people in the Group finance team.”
a new annual reporting process by
implementing IBM Cognos Financial
Statement Reporting (FSR). The solution Meeting increasing financial reporting
uses consolidated financial data from
IBM Cognos Controller and creates linked
requirements
Microsoft Excel and Word documents As a public company listed on the FTSE index at the London Stock
that form the basis of the final report. The Exchange, Morgan Sindall Group plc is obliged to publish a full annual
solution also provides full version control report and periodic Regulatory News Service (RNS) announcements. It
and audit capabilities.
also releases full and half-year analyst announcements and various other
interim management updates.
“Our reports need to comply with International Financial Reporting
Standards (IFRS), and the level of detail that we have to disclose has
been increasing year on year,” comments Dan Engler. “As a result, our
annual report is now well over 100 pages – and creating and managing
a document of this size was becoming a struggle. So many different
departments need to contribute to it that it was no longer efficient
for everyone to sit in a room together and go through the whole
document. However, when we split the document up into sections, we
found that it was difficult to maintain consistency. This led to a lot of
cross-checking and late changes, which inflated the cost and complexity
of the process.”

2. IBM Software Construction / Architecture / Engineering
Business Analytics
and updated, this would dramatically reduce workload and
improve quality.
Business Benefits
• Ensures consistent use of up-to-date data. Cognos FSR automatically “One afternoon I sat in on a meeting with the Group Tax and
imports data from the Cognos Controller consolidation system and Treasury Director where he was looking at a demo of FSR,”
refreshes it throughout the document, reducing the risk of errors.
explains Dan Engler. “It just clicked that this was exactly what
• Enhances the overall quality of the report. Instead of spending all their we needed in Finance. It works by allowing you to create
time checking and re-checking the numbers, the finance team can ‘tags’ or ‘variables’ in the Microsoft Word document, which
focus on analysing and interpreting the data.
are linked to data in the Microsoft Excel file. If a number
• Enables a more collaborative approach, as several people can work on needs to be changed, you can just update the spreadsheet and
the document concurrently. Cognos FSR pulls the new data through into the Microsoft
• Eliminates the need for a single person to act as ‘gatekeeper’ for all Word document automatically.”
edits; this has freed up one full-time employee to focus on other duties.
• Reduces design costs by minimising the number of late changes when
Getting up and running
the document reaches layout stage. The Group finance team asked IBM for a proposal for the
implementation of Cognos FSR, which was reviewed by
• Provides greater traceability, simplifying the audit process and
Morgan Sindall Group’s finance director and the deputy
potentially saving costs on audit overruns.
company secretary. The deal was signed in May, with a view
to getting the solution up and running in time to create the
half-year interim reports in June.
Identifying bottlenecks and process
improvements “We had two or three days of IBM education to set the
Morgan Sindall recognised that this wasn’t a problem that software up, and then another two or three days of training,”
could be solved by adding manpower, because the only way says Dan Engler. “That’s really all it took before we
to ensure proper version control in its reports was for a were ready to start using the software. It was very easy to
single person to act as ‘gatekeeper’ and take responsibility understand the concepts, and the fact that the front-end is
for managing all changes in the document. This created a based on Microsoft Word and Microsoft Excel meant that all
bottleneck that slowed the process down, and also created those involved in preparing the report, not just our finance
risk. For example, if the designated gatekeeper fell ill part way team, were able to pick it up quickly.”
through the review process, it would be difficult for someone
else to take over the role. Tagging variables with Cognos FSR
The next step was to tag the Microsoft Word document.
“We wanted to find a way to focus on improving the overall Every time the text referred to a piece of financial data,
quality and consistency of the report,” says Dan Engler. “We the Morgan Sindall team replaced the raw number with
realised that this would only be possible if we could reduce a ‘variable’ that links to the underlying Microsoft Excel
the amount of time and effort we were spending on checking spreadsheet via Cognos FSR. If the number is changed in
the data and asking the gatekeeper to make edits. We looked the Microsoft Excel sheet, Cognos FSR updates it wherever
for a solution that would eliminate the need for a gatekeeper the variable occurs in the Microsoft Word document. The
by introducing proper version control, and that would make it solution can also use inbuilt logic to update the wording
easier to manage and update data consistently throughout the around the variable – so, for example, if a revenue figure
document.” (“X”) changes from an increase to a decrease, the surrounding
wording will change automatically from “An increase of £X”
Finding a more automated solution to “A decrease of £X”.
The company was already using IBM Cognos Controller
to consolidate financial information from across the Group “You need to invest some time in the tagging process to
and export it as a Microsoft® Excel spreadsheet. The annual get the most out of it, but the real advantage is that when
report itself was written in Microsoft Word, and figures from you’ve done it once, you can re-use it next time,” states Dan
the spreadsheet were copied into it manually. This manual Engler. “We spent four or five days on the tagging for our
process often introduced errors and inconsistencies which half-year RNS announcement in June, and we expect we’ll
then needed to be checked and corrected. Dan Engler’s have to spend a similar amount of time on extra tagging
team realised that if they could find a solution that linked for our annual report in February – but once that’s done,
the Microsoft Excel and Microsoft Word documents and creating the data-focused sections of future reports should be
allowed the data to be reliably and automatically imported a streamlined process. If there aren’t any significant structural
2

3. IBM Software Construction / Architecture / Engineering
Business Analytics
the risk of getting the figures wrong in the first place, and
partly because we were able to parallelise some of the work
Solution Components
instead of running everything through the gatekeeper. Set
Software against this time saving, we did have to put some work into
• IBM® Cognos® Financial Statement Reporting the tagging process, but that was a one-off task which we
• IBM Cognos Controller
won’t need to redo next time.”
Making time savings through reuse
“We’re delighted with the results we’ve The finance team is anticipating greater benefits when the
time comes for its next RNS announcement and the creation
achieved so far with Cognos FSR and Cognos of the annual report.
Controller, and we are looking at ways to
build on our success.” “The potential to reuse variables not only within documents,
but also between them, should be a major time-saving,”
— Dan Engler, Group Finance Manager at Morgan Sindall Group plc
explains Dan Engler. “If we’ve already set up the tags for the
RNS, we can reuse them in the annual report, and we can be
sure that the data in both documents will match. This will
reduce the need for manual checking and give us a lot more
changes from one report to the next, it’s simply a matter of
confidence in the accuracy of our disclosures.”
running the consolidation in Cognos Controller, refreshing
the Microsoft Excel spreadsheet, and then refreshing the
Looking forward to cost benefits
variables in Cognos FSR – a completely automated process.”
From a cost perspective, the solution has already begun to pay
back the investment.
Increasing process controls
Cognos FSR also provides much more robust version control “For one thing, we don’t need a gatekeeper any more, which
than Morgan Sindall’s gatekeeper-based process. means that one full-time employee can focus on more valuable
duties instead of being involved in the reporting process,” says
“We can put changes through much more quickly because
Dan Engler. “We’re also expecting our design costs to fall,
there’s no longer a bottleneck where we have to wait for one
because we won’t need to make so many late changes when
person to make all the edits manually,” says Dan Engler. “We
a document is already at PDF layout stage. Finally, there’s a
can even have several people working on the document at the
possibility of a reduction in our external audit costs, because
same time. For the recent half-year announcement, we had
the audit process should be much simpler and we’re expecting
a situation where we needed to insert a couple of new notes
fewer overruns. But we’ll have to wait until after the audit in
which preceded the existing ones, which meant renumbering
February to find out!”
all the subsequent notes. I was able to go into the document
and insert the new notes; Cognos FSR then renumbered all He concludes: “We’re delighted with the results we’ve
the later notes automatically; and while this was happening, achieved so far with Cognos FSR and Cognos Controller,
one of my colleagues was able to keep working on a different and we are looking at ways to build on our success. IBM has a
section of the document without any problems. Everyone’s strong portfolio of business analytics solutions, and the ability
changes are tracked in both Microsoft Word and Microsoft to introduce a broad range of capabilities with a single family
Excel, so even if something does go wrong, it’s easy to identify of software from a single vendor is very appealing for our
where the mistake was made and find out which parts of the business.”
document it has affected.”
Realising the benefits
Despite implementing Cognos FSR only a month before the
deadline, Morgan Sindall was able to complete its half-year
RNS announcement on schedule.
“It’s a testament to how easy the software is to use that
we were able to implement the new process so quickly
and successfully,” says Dan Engler. “We saved time on
proofreading and editing, partly because Cognos FSR reduces
3

4. About IBM Business Analytics
IBM Business Analytics software delivers actionable insights decision-
makers need to achieve better business performance. IBM offers a
comprehensive, unified portfolio of business intelligence, predictive and
advanced analytics, financial performance and strategy management, © Copyright IBM Corporation 2011
governance, risk and compliance and analytic applications.
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December 2011
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