ATK Improve Business Management with Consolidated Plans and Forecasts
Many companies use Excel for business planning and forecasting as a default, but those who explore alternate tools can reap huge business benefits. Bryan Babineau, Senior Manager Financial Reporting at ATK, had used Quantrix at a former firm, and knew it could improve forecasting and planning for ATK. Following is our discussion on the positive changes Quantrix has delivered to the company.
Who is ATK?
ATK Space Components Division is an aerospace contractor – we design and develop satellite components. We have a number of plants in the division, and each site is focused on building a different component: solar arrays, composite panels, bus structures, propulsion tanks and antennas. NASA, the military, and satellite communications companies are among our customers.
Why make a change in your process?
We have a process established in each plant for generating EAC’s [estimate at completion] for all of our programs, but we wanted to consolidate and manage forecasting at the enterprise level. The Excel models that we were using at each plant were breaking due to volume of data and complexity of calculation, so using Excel for a consolidated forecast was out of the question.
Why did you choose Quantrix?
We needed a powerful calculation engine, one that would handle complex formulas and a large volume of data. Excel can typically handle one or the other, but not both. And it had to run on an analyst’s desktop computer. The cost and IT support required to build a server-based solution was prohibitive. Quantrix minimizes the cost of building a forecasting tool by enabling us to develop rapid prototypes and quickly modify models as business needs evolve.
People in finance typically like Excel – they own the tool, they own the model, they can do the development. Quantrix delivers the same benefits, but you have a tool that scales. You get the best of both worlds, where an analyst can build a model on the desktop, but without the overhead of a server-based solution.
What types of models are you creating in Quantrix?
We use linear interpolation to forecast new business, so we can have some very generic models for different types of projects that we apply to our proposals. They allow us to generate time-phased P&L forecasts for thousands of proposals, all scaled to the correct period of performance. You can do this in Excel, but it’s incredibly slow and cumbersome. Quantrix makes it quite easy.
We’ve built a consolidated forecast that includes both new and existing business. We built the model for booked business in about two weeks, and had it in production within a month. It takes users a bit of time to adapt to using a new tool, but once they realized what Quantrix could do, it snowballed.
How has using Quantrix impacted your planning process?
We can update the forecast in a matter of hours, rather than days, using significantly fewer resources from the finance organization. Effort that was dedicated to maintaining Excel files at each plant can now be devoted to managing the business. The Quantrix model also provides a full four-year outlook, compared with the one-year outlook in our Excel model. And, we can use the same model for annual planning as well as for our monthly forecast, which reduces our effort even further.
That sounds like a lot of time saved.
We’ve estimated that we’ve saved a couple hundred hours a month. We were essentially doing the same process at four different locations, and now we’ve consolidated it at the division level.
How does the team feel about using Quantrix?
The finance folks will tell you it’s fantastic. Manipulating data and managing those Excel files got very redundant. They are able to do much more meaningful work now. Finance people are so used to using Excel that they don’t realize there are better tools. Once they see Quantrix, it’s eye opening.
Do you think you have better information?
We’ll have much quicker access to information. If we want to see the impact of a change in a program, we can flow it quickly and understand how it will impact the business short term and long term. One of the other key benefits is our ability to forecast much further into the future. With our prior Excel forecast, we struggled to forecast 100 different programs. With Quantrix, we’re forecasting more than 1,000 and providing variances to prior forecast and plan. That would have been impossible with Excel. We can see instantly out the next four years, rather than just the next 12 months. That gives us a real advantage.
We also can shorten our iterative process. Rather than prepare a forecast, show management the possible impacts, run modifications through an Excel file, and then schedule another meeting, we can do it all at once. We can do the “what ifs” instantly.
One of the things we used to struggle with was sharing data and data files between sites – the files were so big, at 20 to 50MB. With Quantrix, it is all reduced to one file that is about 4MB. We have reduced the number of formulas from more than a million in Excel to less than 400 in Quantrix. Those have had a positive impact on our processes. We’re not spending all of this time trying to manage massive files. Quantrix is more efficient in how it manages data – it’s phenomenal.
Do you have any advice for others using Quantrix?
Take a holistic view of your modeling or analysis project before reaching for Excel, and determine what capabilities you need to get the job done. Quantrix is a brilliant tool that provides a massive advantage over other software – by significantly reducing the number of formulas and efficiently managing large datasets. In the last 20 years the volume of data and complexity of analysis that is expected in every organization has exploded, and Excel hasn’t kept pace. Quantrix is a disruptive technology that reshapes the way we approach modeling and analysis, and makes it possible to contribute significant and measureable value-add.
Bryan Babineau is the Senior Manager of Financial Reporting at ATK.