Explore Watco’s journey with SAP
Watco, a leading transportation and logistics provider, wished to streamline financial planning, forecasting, and reporting processes for its 200 field locations. Benefiting from data accuracy, consistency, reportability, and timeliness offered by the SAP Analytics Cloud solution for planning, the company can communicate up-to-date information and align with team members on expectations.
Industry | Region | Company Size | Partners |
Cargo, transportation, and logistics | Kansas, United States | 5,000 employees | Analysis Prime and Avvale |
improvement of metrics delivery to teams, from three days to on demand.
team members collaborating on enterprise plans.
source of truth across 200 profit centers.
Vice President of IT Applications, Watco Companies LLC
Industry | Region | Company Size | Partners |
Cargo, transportation, and logistics | Kansas, United States | 5,000 employees | Analysis Prime and Avvale |
improvement of metrics delivery to teams, from three days to on demand.
team members collaborating on enterprise plans.
source of truth across 200 profit centers.
Vice President of IT Applications, Watco Companies LLC
Streamlining financial planning, reporting, and forecasting processes
Founded in 1983, Watco Companies LLC grew from one locomotive into a leading cargo and commodity transportation, supply chain, and logistics services provider. Present throughout North America and Australia, the company owns and operates a diverse network of 42 short line railroads. It has 92 terminal and port locations for intermodal handover and an international brokerage business for highway, truck, and barge transport. The company’s dramatic 12% to 15% growth over the past 15 years is due to Watco’s investment in areas such as rail tracks, warehouses, and conveyor systems. Combining its stable core business with this high-growth side created unique challenges, such as IT system lag. This was particularly challenging in the face of the desired continuous improvement in safety, customer service, and profitability. Another issue was having too many data sources, with their loose integration impacting data accuracy and time to make decisions.
Watco was measuring and evaluating financial performance in almost 200 separate profit centers with stand-alone systems, management teams, and income statements. The planning, tracking, reporting, and forecasting processes for revenue and day-to-day operating expenses were based on Microsoft Excel spreadsheets. Field team members had to manually update templates with hierarchy changes or new profit centers, and there was no bandwidth to review and include each location’s historical growth rates. Team members needed to upload planning data by hand, often sequentially inputting information into spreadsheets with more than 200 tabs. These processes were cumbersome and time consuming, while the typically large and complex spreadsheets were difficult to consolidate, maintain, and validate and were prone to human error. This led to challenges with data accuracy, consistency, refreshability, and reportability. It was hard for team members to gauge the impact of their financial information on budgets in a timely way, and the accounting team lacked the capabilities to plan and report capital expenditures. Ultimately, the manual tracking and forecasting of operating expenses was not keeping up with revenue growth.
Watco wanted the ability to deep dive into the budgeting process in the 20 to 30 profit centers comprising 80% of the company’s cash flow. For the remaining 180 or so centers, it sought a higher-level planning process to focus more on trends and utilization of general growth rates and operational-expense-increase rates. The business pursued the flexibility to manage the planning process from these two distinct angles. And due to its long-term focus, Watco needed processes to allow it to potentially scale from 200 to 500 locations.
Chief Accounting Officer, Watco Companies LLC
Creating a digital foundation and driving analytics capabilities
Watco chose RISE with SAP S/4HANA Cloud, private edition to replace SAP ERP Central Component as a digital foundation. It deployed the SAP Analytics Cloud solution for planning to enhance financial planning, reporting, and analytics areas. Specifically, the solution enables collaborative planning with automated forecasting of data from the SAP S/4HANA Finance solution as well as analytics and reporting functionality. The company uses SAP Business Technology Platform to accelerate connectivity and provide a platform for future growth. It benefits from capabilities including prebuilt business accelerators for smooth integration between financial planning and ERP. The company also employs SAP SuccessFactors solutions in the public cloud, covering recruitment, onboarding, compensation, and payroll capabilities within HR.
With data sources such as the file server and core data services view replication for SAP S/4HANA Cloud, Watco can use SAP Analytics Cloud for planning to access general ledger line-item reporting, analytics, and planning functionalities. The business now gets a profit and loss account for each of its 200 individual locations as well as a comprehensive, consolidated company view. New process outputs with the solution include drill-through detail, a financial supplement pack, revenue reporting, a track scorecard, annual budgets, and revenue and operating-expense monthly forecasts and reforecasts. The company is taking advantage of the primary and secondary interfaces through the Web and the add-in for Microsoft Office for SAP Analytics Cloud. Watco partnered with Analysis Prime, a specialist in SAP Analytics Cloud specifically, for solution architecture and implementation services. And the company collaborated with Avvale to migrate to RISE with SAP S/4HANA Cloud, private edition, allowing faster execution.
While the majority of reporting is done with SAP Analytics Cloud for planning, Watco is also relying on the SAP Fiori user experience to conduct embedded operational reporting along their business processes. And it’s embarking on a change management program to facilitate the move from offline Microsoft Excel spreadsheets to an integrated, automated planning and reporting system.
Chief Accounting Officer, Watco Companies LLC
Aligning management and team expectations with timely and accurate data
Based on its mindset to “improve every day,” Watco is delivering next-generation, cloud-based planning and reporting functionality thanks to SAP Analytics Cloud for planning. This capability helps ensure data accuracy, consistency, reportability, and timeliness. By combining RISE with SAP S/4HANA Cloud, private edition and SAP Analytics Cloud for planning, the business has a single source for finance, reporting, planning, and analysis to facilitate future growth. With enhanced alignment to corporate plans, the company can harness these intelligent insights to make real-time adjustments, helping achieve operational agility, cost reductions, and improved decision-making.
One of the biggest benefits is the minimized integration of external tools with the centralized ERP system. This helps streamline data flows and overcome timing issues. For example, the finance team might begin planning in August and have eight months of actual data in four to five forecasted periods. By November, there’s 11 months of actual data. Rather than spending significant man-hours manually updating information on spreadsheets, it can be refreshed at the touch of a button. Whereas before, Watco did a quarterly reforecasting process for its top 10 to 20 profit centers, it now has the functionality and flexibility to do a detailed reforecasting process in a far shorter time frame. Instead of taking three days, there’s real-time delivery of forecast metrics to field operations. The automation greatly enhances the reforecasting process and limits mistakes, while the simplified integration across SAP and external systems enables faster results, flexibility, and scalability.
Watco provides accountability and empowerment to its field team while valuing clear communication and alignment on what’s expected of them. By turning around a forecast in a timely and accurate manner for all 200 team members, with easy-to-follow reporting, the company can share clear expectations about what to focus on. With data refreshes down from multiple hours to only minutes, team members can access current information quicker and more simply, saving substantial time and effort. And with live connectivity from SAP Analytics Cloud for planning to RISE with SAP S/4HANA Cloud, private edition, the accounting team can manage real-time data.
Watco gained a significant performance boost, given the smooth transition and positive feedback about the speed and accuracy of the planning and reporting solution. The business can create confident future plans with trusted data.
Chief Accounting Officer, Watco Companies LLC
Branching out with more SAP solutions
Watco plans to further embed SAP solutions and services within its IT landscape. It will engage the already-onboarded SAP Enterprise Portfolio and Project Management package to provide planning and reporting around capital expenditure in future planning cycles. The company intends to use the outputs from profit and loss and capital planning activities to work toward cash flow planning and management capabilities.
The business will look at optimizing and enhancing content from SAP Analytics Cloud in other planning areas, such as workforce, liquidity, supply chain, and sales and revenue. It’s also keen to investigate real-estate reporting functionality. Finally, Watco is actively evaluating SAP Integration Suite, run on SAP Business Technology Platform, to integrate additional data sources.
Featured partners
Analysis Prime has been involved with SAP Analytics Cloud since 2015, and its founding partners were among the first to implement the solution. The planning and analytics consulting firm has since built a reputation as one of the global leaders in SAP Analytics Cloud, with over 300 successful project implementations to date.
Avvale is a global consultancy, an evolution of Techedge and NIMBL, offering technology and business intelligence advisory services as well as software implementation support. The company integrates a range of digital competencies, orchestrated under a common vision to accelerate clients’ digital transformations so they can thrive today and tomorrow.