Columbia Sportswear Company is a leading innovator in the global outdoor apparel, footwear, accessories and equipment industry. Founded in 1938 in Portland, Oregon, Columbia products are sold in approximately 100 countries and have earned an international reputation for innovation, quality and performance. Columbia products feature innovative technologies and designs that protect outdoor enthusiasts from the elements, increase comfort, and make outdoor activities more enjoyable. The firm is listed on NASDAQ under COLM, and achieved net sales in 2013 of approximately USD1.68 billion.
An ongoing multi-year global SAP ERP implementation was creating considerable financial reporting and planning challenges for Columbia Sportswear. Without a stable financial reporting and planning platform integrated with the company’s legacy and new ERP systems, the finance organization was at risk of losing its ability to execute core financial processes without an immense level of time-consuming manual intervention combining data sets from the disparate ERP systems.
Jim Swanson, Director of Strategic and Financial Planning at Columbia Sportswear explains, “With Columbia transforming many of its global business processes and replacing a large portion of its IT infrastructure, our finance organization faced the enormous challenge of adapting to change without severely impacting our ability to deliver information to key decision makers in a timely manner. As a public company in a fast-paced business, it has been crucial for the finance team to not only replace key financial systems, but also to improve efficiency and enhance the information and analytics that support business leaders throughout the company.”
In addition to streamlining information delivery, Columbia Sportswear wanted to find a solution that would provide deeper insight into the performance of various parts of its business, helping to enable better corporate decision-making.
Harmonizing financial reporting and enhancing financial planning processes
After an extensive evaluation, Columbia Sportswear selected IBM Cognos TM1 and Aviana, an IBM Business Partner, to help design and implement the solution to support management of financial planning, reporting and analysis as well as the related master data. The company also integrated the Cognos TM1 solution with its existing IBM Cognos Business Intelligence software.
In the short term, the new IBM solution will act as a bridge between the legacy ERP environment and the new SAP ERP landscape. The TM1 platform is integrated with the general ledgers of both systems, enabling the harmonization of data to support global management reporting and financial planning.
Enhancements were also made to Columbia’s financial planning processes to enable driver-based planning, rolling forecasts and headcount planning. The implementation of driver-based planning is designed to improve forecast cycle time by reducing the amount of manual data entry, and to boost the accuracy of forecasts. Rolling forecasts will provide Columbia with increased visibility beyond the current fiscal year into potential future outcomes, allowing management to become increasingly proactive in decision-making. Integration with human resource systems provides Columbia with a standardized global headcount planning tool that offers immediate visibility and control into key factors impacting personnel expenses.
“We have received outstanding support from Aviana – their consultants took the time to listen and gain a deep understanding of our requirements, provided strategic consulting with a detailed knowledge of business analytics, and are very results-driven. We couldn’t be happier with the result.”
— Jim Swanson, Director of Strategic and Financial Planning, Columbia Sportswear
Jim Swanson remarks, “The TM1 implementation provided us with an opportunity to address key challenges while transforming our ability to standardize planning processes and evaluate business performance. The capability of TM1 taken together with the expertise of our internal staff and consulting partner has resulted in a successful project. We have received outstanding support from Aviana – their consultants took the time to listen and gain a deep understanding of our requirements, provided strategic consulting with a detailed knowledge of business analytics, and are very results-driven. We couldn’t be happier with the result.”
As the legacy ERP and supporting reporting and planning systems are phased out, IBM Cognos TM1 and IBM Cognos Business Intelligence will serve as the enterprise-level analytics and planning platforms for the company.
Cutting time, effort and cost
Introducing a solution that integrates with Columbia Sportswear’s ERP systems eliminates manual work and provides a harmonized view of financial data. The company uses the IBM Cognos TM1 software to manage both planning and financial reporting processes – removing the need for planning data to be exported into a different system for reporting. This process simplification has enabled Columbia Sportswear to optimize its financial planning and reporting processes. Without the implementation of IBM Cognos TM1, Columbia’s planning and reporting cycle times would have increased by days, making it increasingly difficult to provide timely information to Columbia’s leadership team as well as prepare for time-sensitive board meetings, earnings releases and regulatory filings.
Responding faster
Data can now be loaded into the reporting system much faster than before, allowing Columbia Sportswear to generate reports on demand with data updates performed multiple times per day, rather than being tied to a twice-daily schedule. As a result, analysts can get business data to corporate decision-makers much faster than was previously possible.
Jim Swanson commented, “Our FP&A team is now well-positioned to perform their activities with minimal impact in the midst of a complex ERP implementation. I’m very pleased with our ability to roll up global financial plans within a day of submittal – an enormous achievement. Getting this data to our leadership team provides the visibility that executives need to react to changes in the business.”
“To generate our three-year plans, we can now layer strategic initiatives on top of our business-as-usual financial plan and perform what-if analyses to analyze what these initiatives could mean for overall performance. This allows us to better prepare for what the future may bring.”
— Jim Swanson, Director of Strategic and Financial Planning, Columbia Sportswear
Looking to the future
Columbia Sportswear also uses IBM Cognos TM1 to conduct long-range financial planning to assist in scenario planning and evaluating the financial outcomes of Columbia’s portfolio of strategic initiatives.
Jim Swanson explains, “To generate our three-year plans, we can now layer strategic initiatives on top of our business-as-usual financial plan and perform what-if analyses to analyze what these initiatives could mean for overall performance. This allows us to better prepare for what the future may bring, and helps our executive team prioritize and manage the portfolio of key initiatives that will drive growth in the business.”
In the future, Columbia Sportswear intends to extend its use of the IBM Cognos TM1 solution to support operational planning. For example, the solution will support Columbia’s gross margin program, a key business process that enables Columbia’s product creation, sales, demand planning and finance teams to collaborate as the company develops its product line to improve product margins for both Columbia and its network of wholesale customers globally. Through IBM Cognos TM1, the product creation teams will be able to monitor performance against targets throughout the product development process, providing the teams with meaningful, timely feedback that can be used immediately to enhance product margins.
Looking further into the future, Columbia has plans to leverage IBM Cognos TM1 to capture revenue forecasts from sales representatives – a key component in improving sales forecast and demand plan accuracy, and ultimately driving improved inventory turns.
Jim Swanson concludes, “IBM Cognos TM1 enables us to streamline key business processes, and improve decision-making. The solution provides us with a detailed view of the different parts of our business and allows us to forecast performance into the future, helping us to manage our company more wisely over the long-term.”
“IBM Cognos TM1 enables us to streamline key business processes, and improve decision-making. The solution provides us with a detailed view of the different parts of our business and allows us to forecast performance into the future, helping us to manage our company more wisely over the long-term.”
— Jim Swanson, Director of Strategic and Financial Planning, Columbia Sportswear