Keeping An Eye on Expansion: How Cartesis is Helping Sartorius Increase the Speed Flexibility and Accuracy of its Financial Reporting
Introduction
Rapid growth can be a mixed blessing. While the increase in revenues, scope and geographic reach are all positive steps, profitability, morale and efficiency are often victims of corporate success. This is all too evident in acquisitive enterprises which look to build on organic growth by bringing in complementary organizations or offerings from outside.
For M&A activity to work, integration and consistency are crucial. If an organization functions as a number of separate, stand-alone entities, then differences can be inefficient at best, crippling at worst.
About Sartorius
Traditionally a leading company in biotechnology applications and weighing technologies, Sartorius Group has evolved and expanded considerably to become a global player. Through internal growth and a number of acquisitions, the Group now spans seven brands - transforming itself into a global operation with 50 subsidiaries focused on growth and emerging markets. Sartorius' revenues in 2002 were 476.5 million euros.
Organized into the Biotechnology, Mechatronics and Environmental Technology divisions, Sartorius is currently well-positioned in three of the most important technology areas of the future. However, if it is to capitalize on this potential, it must ensure that it can control both its growth and the large number of disparate entities within the Group, and channel them in the right direction.
The problem
Since 1996, Sartorius has made a number of strategic acquisitions and doubled in size. As a result, it has delivered impressive revenue growth, product and service diversification as well as shareholder value. However, as CFO Thomas Hartwig explains, success brings its own problems:
Traditionally we had used Excel as our default financial reporting tool for consolidation and reconciliation, combined with email for distribution of reports. However, it became clear that this was fast becoming an inefficient and expensive series of processes. In addition, there were regulatory changes, including International Accounting Standards (IAS), as well as internal and external reporting requirements which needed to be addressed.
"In fact, IAS compliance gave us a natural window to upgrade our reporting capabilities," he continued. "To have adapted the existing system would have taken a great deal of effort and it would not have had the innate flexibility required to seamlessly integrate future changes. This is an area where Cartesis really comes into its own."
"In short, as we changed and grew, we needed a tool which was more in line with our business - one which would reflect the organization as it is now, rather than how it was five years ago. This meant centralizing information and overall control while giving individual managers responsibility for P&L."
The solution
Sartorius partnered with an external agency for the review process, support in selection and to ensure that it chose the best available solution for its needs.
As an existing SAP customer, using the company's ERP system, it clearly had to review the vendor's offering in this area, as well as look at other industry leaders, such as Cartesis and Hyperion, amongst other well-known vendors. After a thorough evaluation process, Sartorius selected Cartesis Magnitude due to its scalable, flexible and multidimensional qualities compared to the other products involved in the tender process.
The Cartesis Suite provides a full view across and into the organization, and features a comprehensive audit trail capability. This facilitates financial consolidation and enables much greater transparency and clarity, providing reassurance for management and investors.
The product streamlines the financial reporting process using a single solution for Business Performance Management (BPM). Cartesis Magnitude is an integrated, Web-based solution for planning, reporting, forecasting, consolidation and performance measurement, using a consistent data platform.
This ensures that company decision-makers have 24-hour access to key financial information, wherever they are in the world, as well as providing uniform data across the organization.
The analyses carried out by Sartorius span the whole range of the reporting spectrum, from segment reporting for IAS to P&L and headcount for the whole organization, as well as the examination of key performance management indicators. All this is in turn analyzed by division, and at an even more detailed level by individual business area and brand. This type of in-depth multidimensional analysis, provided by Cartesis' MultiMULTI Financial technology, enables the finance department to not only ensure maximum visibility and accuracy of its figures, but also look behind the numbers to deliver valueadded strategic analysis of key business areas.
"Other systems could solve parts of our problem well, but Cartesis was the only one which did everything to the required standard - as well as being flexible enough to evolve with us in the future," commented Hartwig.
The benefits: delivering the "story behind the numbers"
Using Cartesis Magnitude, Sartorius now has a single, centralized information pool ensuring that duplication is eliminated and staff are no longer doubling up on jobs. This has delivered real benefits in terms of efficiency and accuracy.
"We've had a dramatic improvement in data quality - which not only helps us to remain credible in the current financial environment, but also allows us to have ultimate faith in the figures we base important decisions on," said Rainer Lehmann, project leader and vice president of treasury, investor relations & management accounting group at Sartorius. "There's also no ambiguity across the Group. All managers are judged on one set of figures, on a single, global basis. This makes management much easier and allows us to see clearly where investment or efficiencies should be made," added Hartwig.
The Cartesis Magnitude solution also eliminates the shortfalls of the previous system. Email has been replaced by a user-friendly Web-based interface, allowing staff to view and review figures rapidly, regardless of their location. The addition of "flash reporting" functionality also allows them to gain a snapshot of performance tailored to their requirements.
In terms of quantifiable benefits, Cartesis Magnitude has had a real impact on Sartorius' business. As Lehmann explains: "Cartesis has cut the reporting process by up to 14 days. Not only does this help us to make management decisions faster, but also allows our finance team to spend more time working strategically for the business. They're expensive, intelligent people so it makes far more sense to deploy them in proactive rather than in administrative roles."
"We also need to report in different ways to meet the diverse needs of our audiences. The centralized approach means that we can adapt our reports to suit internal and external parties and bring the reconciled data together rapidly with the minimum of time and energy."
Sartorius now has the capability to "deliver the whole story behind the numbers" to both of its core audiences. Internally, staff can gain instant overviews of their areas of responsibility in a multidimensional manner in order to make more informed judgments about the business. Externally, Sartorius can deliver the appropriate reports to investors faster, and with a great deal more confidence.
However, for Sartorius, one benefit shines brighter than all others:
"Multidimensionality is the key concept," explained Hartwig. "We have a single, consistent, global system which we can query in a large number of different ways. This means we can examine the business on a regional basis, and then take a look at how each legal entity is performing. The ability to examine performance on a macro and micro level means we can be both agile and highly informed."
The future
In a way, the innate flexibility of the Cartesis solution means that many future developments are already taken into account. Its ability to conform to local market requirements and Group reporting standards, as well as its multi-currency approach means that Sartorius can adapt to new standards, such as IAS, without disrupting its business.
As Hartwig concludes: "The beauty of Cartesis Magnitude is that we don't have to do everything in one fell swoop. Its modular design means that we can be confident that the solution will adapt and scale as we grow. For example, if we buy or sell businesses, they can be integrated with or released from the overall structure with a minimum of hassle.We're not a static organization, nor are we short-sighted. Cartesis reflects this, and has enabled us to become a truly multidimensional business - and a highly flexible one too."
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