The world of business demands the right decisions to succeed. For Al Rabie—a prominent juice manufacturing company in the Middle East—their reality was no different. However, their manual planning and budgeting process in spreadsheets posed several challenges, including lack of control, delayed data, poor execution, and the need for continuous follow-up with IT for actual data. They faced obstacles such as a prolonged budget process, manual forecasting, and no product profitability. To address these challenges, Al Rabie partnered with 1Direction Global, a top solution provider in Financial and Operational Performance Management and Consulting, and a Gold Business Partner with IBM since 2018. This partnership has proven to be long-lasting.
Revolutionizing the FMCG industry with integrated business planning
Each business in the fast-moving consumer goods (FMCG) industry has its own unique set of rules, variables, and limitations, and Al Rabie Saudi Foods Co. Ltd was no exception. To meet their specific needs, the experts at 1Direction Global, comprised of certified accountants and engineers, turned to IBM Planning Analytics for Watson, a flexible and powerful planning and analysis tool. By leveraging this technology, they developed custom budget models for sales performance, human resources planning, operating expenses, and a complete profit and loss statement. Additionally, dashboards and reports were crafted based on the budget models and conducted variance analysis for specific areas. The implementation process was done in several stages, from January 2019 and until August 2022, with product profitability being added in the final phase.
Al Rabie Saudi Foods Co. Ltd adopted an integrated business planning approach to take control and streamline their planning and budgeting process. This approach was done in stages, implementing each module at a time, which ensured minimal impact on operations and allowed teams to adopt new models and workflows efficiently.
Sales performance planning
AL Rabie needed precise sales volume planning, considering different variables like products, channels, and location. The solution allowed to automatize the conversion of sales volumes planned in cases to liters, accounted for discounts and incentives, and generated accurate contribution margins and reports for key customer groups and categories.
Raw materials and production management planning
AL Rabie sought estimation models for managing raw materials and production planning in their juice production. The system provided price sensitivity analysis and facilitated monitoring the impact of raw materials and production management real-time on the basis of product recipes and their associated costs in the budget.
Human Resources planning
A cost-based HR planning model was deployed within their existing framework, incorporating factors like salaries and bonuses for employees and contractors, which included a vacancy plan for accurate budgeting and forecasting.
Operating expenses
The model was deployed to manage fixed and variable overhead cost including the necessary cost allocation logic to enable users to select fixed or variable overhead and dynamically allocate drivers for a fast and accurate budgeting process.
Profit & Loss statement
The system provided a complete profit and loss statement with the capacity to plan both budget and actual scenarios. The implementation also provided an enterprise-level profit and loss statement with the facility to include corporate expenses such as depreciation, taxation, etc.
Dashboards and reports
The system included reports and dashboards based on deployed budget models. Variance analysis was provided for selected areas, and management profit and loss and other reporting were done as per business requirements. The system calculated the base budget data based on trend as a starting point for the budgeting exercise, with multiple versions provided for better control and movements.
The power to take informed decision
Al Rabie was able to achieve accurate forecasting during uncertain market conditions by developing 24-month rolling forecast models. In August 2022, they implemented product profitability by allocating common costs at the product and channel level, which provided immediate management decision-making capabilities.
Planning Analytics for Excel (PafE) user interface allowed business users to input budget numbers and make updates easily directly in Excel™, and input of data was widely simplified by the spreading out functionality. The Planning Analytics Workspace is another popular web interface that provides a unified platform for reporting and management of the budget process. The ad hoc quick analysis using drag and drop functionality of dimensions in a cube has enabled them to perform quick analysis and make informed decisions.
According to Shaker Hazaimeh, the PMO Manager at Al Rabie:
“When the company decided to improve and enhance their budgeting system, different solutions have been evaluated. The most fulfilling solution has been selected was IBM Planning Analytics with Watson. And from IBM partners, 1 Direction Global has been selected for their experience in IBM products, their commitment and dedication. It was a pleasure to work with 1 Direction Global on this project as they were very cooperative and very helpful. Both teams have done a great job in managing this project, meeting business expectations, and achieving its success.”
According to Bruno Albi CA, the Director Financial Reporting Analysis at Al Rabie:
“IBM Planning Analytics with Watson implemented by 1Direction Global has enabled the business to reduce the cycle times for budgeting and forecasting due to its powerful capabilities of capturing changes and updating all the budget modules to the profit and loss statement. By eliminating error prone and manual processes previously done using excel files and reliant on multiple data sources and over reliance on the IT department, the time to complete the annual budget was reduced from typical 60 days to 15 days. All analytics and presentations are also now linked to Planning Analytics Engine (TM1) and therefore any change flows through seamlessly within a short time. Likewise, the monthly forecast process has become highly efficient and granular – sales and contribution can be drilled down by product, channel, geographical location, and this greatly helps with profit planning.
Planning Analytics’ profitability analysis module that was implemented by 1Direction Global expert team helps to analyze profitability by each SKU by channel and GEO and identify opportunities for profit improvement and take corrective action.
Future project on the cards is to automate the cash flow planning using IBM Planning Analytics with Watson capabilities.”
In my words as the Co-founder and Managing Director at 1Direction Global:
“Al Rabie IT & Finance team approached us for issues using spreadsheets for Budgeting & Forecasting process and did not have integrated solution for actual figures. By using our expertise knowledge and best practices we built multiple models successfully.”
The success of Planning Analytics has encouraged Al Rabie to expand the solution to other departments and use cases such as Outsourced planning, Balance Sheet and Cash Flow model.
The story of Al Rabie is a testament to the power of collaboration and innovation. By adopting an integrated approach to planning analysis and reporting, they were able to overcome their budgeting and forecasting challenges and achieve their goals. Their partnership with 1 Direction Global and IBM has enabled them to stay competitive and adapt to changing market conditions. Al Rabie and their commitment to excellence is an inspiration to us all.
About 1Direction Global
Based in Riyadh, Saudi Arabia, with a global presence in Australia and India, IBM Gold Business Partner 1Direction Global specializes in enterprise performance management and business intelligence. Focus areas include IBM solutions financial consolidation and reporting, and data transformation. Delivery models include cloud and on-premises deployment, and onsite and offshore implementation.
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