A game of chance – Enterprise planning at one of the largest gaming conglomerates in the world

With a turnover exceeding 3.2 billion euros in 2012, the Novomatic Group of Companies is one of the largest integrated gaming conglo-merates in the world. The group which was established in 1980 is represented in 43 countries and exports high-tech gaming equipment to 80 destination countries. Over the last few years, the group has been expanding rapidly and has incorporated a great many new companies. The high growth rate and the diverse nature of these new subsidiaries presented Novomatic‘s manage-ment with the challenge of coming up with a consistent plan for the entire group despite all the differences.

At the group headquarters in Gumpolds-kirchen near Vienna, Gerald Flitsch and his team accepted this challenge. The list of requirements was long, the existing planning process complex.

From cost centre planning through to consolidation

Finding a software program which would enable the planning of 150 companies with diverse structures was indeed a significant challenge. Within the Novomatic group, the companies are active in various sectors, from the manufacture and leasing of slot machines to the running of these machines on company premises. Apart from that, the subsidiaries are all structured differently – from small businesses with one contact person dealing with all financial matters to companies with large finance departments. These different business fields and structures

result in differences in the requirements. The objective was to find a software program which could be used throughout the entire group, and not just at its headquarters. Thus, the planning software would have to provide standardisations and templates in order to guarantee the possibility of an integrated financial plan for all the companies in the group, regardless of structure or business field.

In the gaming industry in particular, there are often very sudden changes in legislation which entail a complete revision of all the assumptions underlying a plan. By plan-ning on cost centre level and using vari-able parameters, these short-term changes were to be implemented as they arose, even during the planning process. The planning software in question would therefore have to allow highly detailed and flexible cost centre level planning and also be capable of rapidly processing large amounts of data from diverse pre-systems into a consolidated budget.

Against the backdrop of the group‘s dynamic development and ever increasing complexity, Gerald Flitsch and his team set their sights on introducing more transparency, flexibility and efficiency into the planning process by means of a new software tool.

Considering this rate of expansion, new companies and the associated new cost centres would have to be integrated in the planning process as quickly as possible. Transferring data from different pre-systems

Rapid growth and the increasingly complex planning meant that the management staff at the gaming giant Novomatic had their work cut out. They decided to stake everything on Corporate Planning Suite, the integrated performance management software – and won.

User: Novomatic Group of

Companies

Industry: Gaming

Employees: Over 20,000 worldwide

Turnover: 3.2 billion euros

Location: Gumpoldskirchen, near Vienna

CP-Products: Corporate Planner

Corporate Planner Finance

Pre-systems: ERP systems, specialist

gaming industry systems

Fields of use: enterprise planning, analysis,

reporting, cost centre

planning, integrated financial

planning

Case Study

"The handling of the soft-ware is so simple that any necessary adjustments in the structure can be made without the help of consul-tants and without program-ming language – just by using the mouse."

Annemarie NetzlControllingNovomatic Group of Companies

would need to be very straightforward, since the increasing number of subsidiaries meant that more and more diverse ERP systems would be coming into play.

Integrated Financial Planning

The planning staff attached particular importance to a standardised financial plan being contained in the software. Instead of spending ages constructing a balance sheet and cash flow plan, they wanted to have more time available for carrying out valuable analyses. A predefined standar-dised planning framework would make the whole process a lot simpler. There are many small businesses which belong to the group, but these should be expected to deliver the same standard of planning as large compa-nies. Even if most of these companies only submitted a P&L plan, while the balance sheet plan would be produced at corpo-rate headquarters, given the vast quantity of companies to be planned in a very short space of time, predefined templates and processes were considered essential. This was beyond the capabilities of the BI soft-ware which was in use up to that point.

In its search for the right software solu-tion, Novomatic also approached Corporate Planning. The simplicity and flexibility of the software won the staff over instantly, and the built-in predefined business logic and key ratios suited them very well. The soft-ware vendor from Hamburg happened to be working on the enhancement of its solution

for integrated financial planning at the time, and was looking for users who would contri-bute their specifications and feedback to the development process. Since Novomatic had had a good experience with the Corporate Planning software previously, the company was happy to volunteer as a pilot customer. The Novomatic management staff placed so much trust in the emerging product that they even prepared the budget for 2014 in the Corporate Planner Finance application which was still in the testing phase. "The handling of the software is so simple that any necessary adjustments in the structure can be made without the help of consultants and without programming language – just by using the mouse. This was what made planning in the test system at all possible," Annemarie Netzl from the corporate perfor-mance management team describes their agreeable experience with the software.

With tree structures and logic blocks

There are now more than 20 users at Novo-matic who work with the Corporate Plan-ning software, using the Corporate Planner module with the Corporate Planner Finance function in order to produce an integrated financial plan. The P&L, balance sheet and cash flow statement for each company or cost centre are depicted in the distinctive Corporate Planning tree structures. General parameters are stored in a statistics tree. Two parallel views can be displayed, for instance, a view of the companies alongside a cost

centre view. The application has a large number of logic blocks for linking business administration formulae and interrelation-ships with the correct items and values in the structure. "All the logic necessary for the planning of 150 companies is provided in the software," Annemarie Netzl emphasises.

Supported in this way, the planning staff are able to prepare a consistently calcu-lated financial plan quickly and easily. The logic blocks are used mainly for revenues and expenses. Whenever there are changes to the general parameters in the statistics tree, the gaming-related P&L figures (like machine takings, gaming duty or rental) will adjust automatically. Alternatively, amended general parameters can first be used for creating a supplementary forecast view before the data are actually transferred to the plan.

The time saved during the planning process can from now on be used for carrying out extensive analyses. Budget values can be compared with the actual figures or the forecast. The users can have the results displayed either in a table or as a chart. With the help of a time slider, the selected time spans for these variance analyses can be adjusted on an ad-hoc basis. Various questions can be answered at a glance like: Are the cumulative variances also reflected in the monthly values? Is this an incidence of fuzziness in our planning which we have every year? Might we need to make impro-vements to the planning process?

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An 80/20 analysis makes it possible to iden-tify the cost drivers and the sales drivers. Simply by clicking on the "80/20 Analysis" function, the user can find out exactly which of the "miscellaneous expenses" are the main causes of costs: gambling tax, rents, energy or security measures, for instance. In the case of new companies, this is also a way of assessing whether the cost drivers of those companies are comparable with the

group average. By altering the time slider setting, it can be seen whether the distri-bution is affected by seasonal events or whether it was similar in the previous year. The analysis functions are used mainly for the analysis and interpretation of results on an ad-hoc basis, such as when requests arrive from top management or during budget discussions and meetings.

"All the logic necessary for the planning of 150 companies

is provided in the software."

Annemarie Netzl, ControllingNovomatic Group of Companies

"The differentiated view and cost type planning in terms of cost

centres, along with the depiction of group and single-entity charts

of accounts, allow the group‘s financial position to be looked at as

a whole while also making precise distinctions."

Gerald Flitsch, Head of Controlling Novomatic Group of Companies

Since facts are often easier to visualise in graphic form than to take in from plain tables, graphic analyses are frequently used. Whenever the period under review is altered by moving the time slider, this is immedi-ately reflected in the chart. The chart also refreshes automatically as the user moves around in the tree structure, say, from a parent field to a subsidiary field.

For the monthly internal and external repor-ting, the staff at the Novomatic headquarters are able to create table reports as well as graphic reports, which can be delivered as hard copies, circulated by e-mail as PDF attachments or automatically via Outlook, or exported to Excel sheets. Each user can easily prepare the required report without the assistance of a consultant. The composi-tion of columns and rows, the level of detail and the design of the layout – everything can be configured by the users themselves. Once the reports have been set up, they are ready to be applied for any desired period and all companies or cost centres. To produce the reports for the following month, the actual data are simply read in and the time span adjusted. The latest reports are centrally available to everyone straight away.

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About Novomatic

Novomatic operates over 230,000 gaming machines in more than 1,500 traditional and electronic casinos and via rental concepts. The Novomatic casino operations include one of the most lucrative Swiss casinos, the highest-earning casinos in Germany and in the Czech Republic, as well as one of the largest casino resorts in Latin America. Group companies include ADMIRAL Sportwetten GmbH, the most widespread sports betting provider in Austria with 200 outlets, and Greentube Internet Entertain-ment Solutions GmbH. In addition to its headquarters in Gumpoldskir-chen, Lower Austria, the group has production facilities and research and deve lopment cen t res in Argentina, Germany, Great Britain, Poland, the Czech Republic, Russia and Hungary. Novomatic employs more than 20,000 staff worldwide with over 3,000 of its employees in Austria.

Efficiency and time savings

Beside the time savings, to which the use of predefined logic blocks certainly contri-butes, the key advantage of the software solution for Gerald Flitsch is the high effi-ciency given by using standardisations in the planning process. The differentiated view and cost type planning in terms of cost centres, along with the depiction of group and single-entity charts of accounts, allow the group‘s financial position to be looked at as a whole while also making precise distinctions. The data of all the companies are stored in the same data-base, can be displayed in different views and considered from different perspectives, while the P&L, balance sheet and cash flow statement remain dynamically interlinked and are located side by side. While only a few companies actually draw up their cost centre planning directly in the Corporate Planning Suite so far, with the rollout in

Germany and Italy which is scheduled for 2015, Annemarie Netzl will be another step closer to the objective of the software program being used throughout the entire group, and not just at its headquarters.

In conclusion

"The fact that all colleagues are satisfied with the decision for Corporate Planning despite the complexity of the subject matter is due to the usability of the software," the management staff in Gumpoldskirchen are agreed, and are also glad to have played their cards right.

A Competent PartnerCorporate Planning has been specialised in the development of flexible solutions for forward-looking, proactive enterprise planning and management since 1989. Our software is used at more than 4,000 SMEs with over 28,000 satisfied users. Corporate Planning provides competent and professional support during implementation in the form of practice-related individual training sessions as well as consultancy services on request.

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