Blueprint for Success

As manager of group budgeting and forecasting for Suncorp, John Herrmann had a goal for the Australian financial services company to get its multiple planning systems on a single platform. "That was my one vision," he says.

Suncorp had been involved in several mergers and acquisitions, and so, with multiple operations, the word from top management was to conduct more strategic planning. "Because of all the mergers, we were consumed by transformation mode," says Herrmann.

Suncorp offers customers consumer and business banking, wealth management, life insurance, and property/casualty insurance. There are multiple financial service products, and they all are distributed through the one Suncorp network.

With too much of Suncorp's focus on short-term planning, recalls Herrmann, the carrier had to consider a longer-term planning phase. However, "we really needed to have good systems to be able to do that," he says. "You can't do a lot of good planning with just Excel."

Suncorp had been using a budgeting system that Herrmann indicates was somewhat suitable for expenses but gave the planners plenty of headaches. The carrier went out to the market to search for a best-of-breed solution two years ago and evaluated multiple vendors before choosing Cognos. "We thought it was the best strategic fit and gave us the best opportunity to get into planning and my vision of what needed to happen," he says.

One of the factors in the decision to purchase the Cognos solution was the blueprints that were available, which allowed Herrmann's budget department to pick through what each business unit had done in the past. "We had six years of multidimensional database expertise," he says. "We didn't want to spend six months going around in circles, so we saw the expense blueprints and thought they were particularly useful. The general functionality is what we were after."

The property/casualty insurance division where Herrmann works did not have great leverage in terms of what it could get the other product divisions to go along with, he explains, so he pushed for the Cognos implementation based on expense reporting.

Because of the nature of Suncorp's operations, a large portion of the company's expenses are managed through a shared service arrangement, continues Herrmann. "We're not siloed at all," he says. "Our expense base is a bit different than most companies."

With the problems Suncorp was having managing budgets, Herrmann felt confident any implementation would be looked on as an upgrade. The short rollout period of four months also excited the company. "We knew what the stakeholders wanted and what the functionality was," he says. "The purpose of going with the expense model was to sell both the product and my department's vision to the rest of the organization. To get my total vision on board, I had to get the insurance people, the banking people, and the wealth management people to build their revenue models so we could get a final P&L. Previously the P&Ls [from the various divisions] would come to [Herrmann's department], and we would consolidate them in the wonderful world of Excel."

Herrmann reports the expense model got rave reviews throughout the company. "A lot of the people involved in the revenue side were touched by the expense models to some degree, and they could see opportunities to build their revenue models within the same toolset," he says. "It was a successful marketing exercise on our part."

In addition, the Cognos account manager at that time and Herrmann had what he calls "a couple of throwaway words with each other" about getting Cognos to build a performance blueprint for the carrier, and the idea grew. "Unlike the expense model, we didn't have a lot of the intelligence behind [the blueprints] mapped out," he says.

Transparency and visibility are the keys to what Suncorp has been after in this exercise because those are what Excel doesn't provide, Herrmann points out. "We do a fairly detailed budget for expenses," he says. "We budget a bit more granularly than other people. It's hard work upfront for us, but it saves the organization a lot of time if the managers happen to go off the road [with their budgets]. The first part of my jigsaw is in place, and we're happy with the progress we've made."