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Using Enterprise Analytics For Credit Management Decisions
The Client
Chemoil Energy Limited is one of the world´s largest and leading integrated physical suppliers of marine fuel products, Jet fuel, gasoline and diesel fuel with annual revenue of US$4.4 billion.
Business Situation
The entities in the Chemoil group use applications built on either MS SQL Server or Oracle or GP (Microsoft - Great Plains) for recording the Accounts Receivables (AR) & Payables (AP) with external customers and within the group companies. Ageing reports on AR /AP were generated for each entity separately and the global consolidated report was prepared with manual intervention. This process was time consuming and often error-prone.
With growing worldwide operations, the company was ideally looking for a solution, which would integrate with its existing systems and automate their entire procurement process. The solution was also required to support the growing hedging and risk management practice of the company. In terms of functionality the solution should be capable of coordinating with multiple entities within the company and global suppliers. It should handle vast amounts of data, facilitatating enhanced decision making through comparison and analysis.
In addition to automating procurement they also identified the need for a proactive planning tool that would help plan bunker purchases and estimate future bunker requirements.
Solution
Based on a two-phased approach in 2004, Calsoft’s Fuel Procurement System was progressively implemented at multiple company locations across the world. In the first phase, FPMS addressed the business need of streamlining and standardizing the procurement process across global companies. In the second phase the company’s need for optimal fuel procurement was addressed by implementing Optima – a proactive procurement-planning tool.
Chemoil Management required integrated information from various transactional systems. Key Needs were:
- Identify net position with customers to make counterparty credit decisions.
- Identify inter-company dealings within the group.
- A global picture of ageing reports for AR and AP in a single repository.
- Reduce the manual intervention of generating AR and AP reports.
For the reporting requirement, it was also a prerequisite to build a Data warehouse and design an ETL that would extract all the relevant data from the three different transactional systems across the companies.
The Solution
Calsoft implemented a Business Intelligence solution (BI) for Chemoil to gather insight from their transactional information. First phase included creating a data warehouse system by extracting data from three transactional data sources – MS SQL Server, Oracle & GP and loading the same on a Data warehouse. In the second phase, using OLAP database Calsoft created dashboards & reports that display a global picture of AR / AP status of customers and vendors.
Data Warehousing: ETL
Calsoft used various Informatica components and DAC (Data Warehouse Application Console) to provide a detailed design for the ETL mappings including table structure; OLTP mapping etc that would support the reporting requirements. The scope included
- Read the data from three OLTP data sources.
- Populating data to the staging table.
- Read data from the staging table, apply transformation and populate data to the warehouse tables.
Business Intelligence:
- The centralized reporting system provides UI for generating standard / ad hoc reports using Siebel dashboards / Answers.
- Drilldown the reports to invoice level.
- Four levels of user-access viz. Administrator, CEO, Manager, Sales Rep are created to ensure authentic access to the information.
The AR / AP Dashboard displays the following reports:
| Group-wise Ageing Report | There are several groups of companies within Chemoil. This report displays total amount receivables / payables & ageing details for each group. |
| Company-wise Ageing Report | Displays companies and respective amount receivables /payables along with ageing details. |
| Customer / vendor-wise Ageing Report | Displays customers / vendors and respective amount receivables / payables indicating companies. |
| Month-wise Ageing Report | Displays total amount receivables / payables for each month. |
| Top Ten Receivables / payables Report | Shows top ten customers and top ten vendors along with amount receivables / payables respectively. |
Benefits
- Chemoil is able to make critical credit management decision by analyzing net customer positions.
- Enables Sales reps to have the AR information on finger tips to follow up with the customers.
- Ability to drill down to invoice level enables Chemoil to quickly identify payment details and take immediate actions.
- Manual process was not merely time & effort consuming but also lacked authentic and detailed reports. Calsofts BI solution significantly improved Credit Management & decision-making process of Chemoil.