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Ryerson Incorporated Case Study
Ryerson Inc. is North America’s leading distributor and processor of metals, with revenues of $4.5 billion through the first nine months of 2005. The company services customers through a network of service centers across the United States and in Canada, Mexico, and India. On January 1, 2006, the company changed its name to Ryerson Inc. from Ryerson Tull, Inc. and adopted the ticker symbol “RYI”.
Ryerson Inc. operates a network of service centers throughout the United States and Canada with joint ventures in Mexico and India. In January 2005, Ryerson acquired Integris Metals, Inc., North America’s fourth largest metals service center company with 2004 revenues of $2.0 billion. From market perspective, Ryerson and Integris provide unparalleled product offerings, value-added capabilities, customer service, and geographic reach. From an internal administrative perspective, the combined company had many challenges - overlapping facilities, major integration projects to unlock synergies, and melding together two management teams that were used to managing by different financial reports and metrics.
Industry:
• Metal Distributor & Processor
Geography:
• North America
Information Needs:
• Integrated Financial and Operational Metrics
Platforms:
• SAP
Users:
• Finance and Operations
Solution:
• Cognos
Benefits:
• A common, dynamic consolidation, planning
and reporting system
| Problems Faced
Disjointed information, in different formats, threatened the achievement of synergies and integration within the Ryerson company. However, the situation was even more complex, because prior to the Integris acquisition, Ryerson had acquired a number of other companies and these acquisitions also had different legacy computer systems. The complexity of dealing with multiple platforms resulted in a decision in 2003 to migrate all of the legacy systems onto a new common application platform – SAP. The integration of these two multi-billion dollar companies would have to be done during the midst of a massive SAP conversion that would take the next 4 years to complete.
In order to deliver timely and accurate financial data to company management and decision makers, the Finance Team needed to develop a common, yet flexible and dynamic consolidation, planning, and reporting system. After extensive research, Ryerson chose Cognos to become the foundation of management reporting and analysis. Prior to the Cognos implementation, the Finance organization spent weeks consolidating actuals from six separate financial systems to deliver the necessary reports and analysis to the business managers.
Strategy Followed
In approximately 6 months a small group of dedicated people with the help eCapital Advisors consulting, developed a common branch monthly financial reporting system, with numerous metrics, a very robust daily sales reporting system, as well as a detailed common budgeting application for the entire company. To accomplish the numerous financial reporting needs, the team mapped legacy general ledger account structures into a common, and improved, reporting structure. Using Cognos Analyst to build models and metrics, the team uploaded the information into Contributor so business users could access the information over the Company’s Intranet. The Finance team also built a sales reporting application that gives branch and senior management a daily status of sales and trends (units, revenue, gross profit, items counts, rates etc) by month to date, prior months, quarters, by product lines, for every location with roll ups by regional markets, by divisions, and finally by company.
Business users can now view the data to make informed decisions about their business each day. Using the Cognos Contributor tool, business managers and executives can quickly update company forecasts for sales and expenses. Comparing forecasts and budgets to actuals in a unified view allows tracking of variances and overall performance. Finance continues to refine the data processing and management metrics; the future calls for the use of Cognos 8 Business Intelligence. These tools will allow users the opportunity to freely design custom reports and distribute data in ways that were previously unfathomable.
Benefits Realized
Cognos provides instant visibility to critical business issues and enables the access to data via the web. Now, for the first time in the 160 year history of the company, users across the entire company can access a common pool of metrics and financial information with consistent definitions, a common source, and a common calculation methodology. Moreover, as the SAP rollout progresses, the Cognos applications provide a dependable reporting structure so that users will experience no change in their information or reports when moving from a legacy platform onto SAP. The applications enable Ryerson executives and business managers to make informed decisions in a timely manner. For a cyclical industry characterized by low growth and margins, improved productivity and refinement of business practices play a significant role in determining competitive advantages and overall business success. Effective decisions result in improved utilization rates, lower costs, higher quality performance, and better lead times.
About eCapital Advisors:
eCapital Advisors, headquartered in Minneapolis, MN, is a management consulting firm specializing in Performance Management solutions. The Performance Management solutions include software and services designed to empower the business user with real-time budgeting, forecasting, analytics, and reporting. These powerful tools provide comprehensive, real-time views of performance that facilitate decision-making to improve efficiency and increase profitability.
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