Starting as a single nail factory in 1901, Gerdau grew into the largest producer of long steel in the Americas, with steel mills located spread across Brazil, Argentina, Canada, Colombia, Dominican Republic, Mexico, Peru, United States, Uruguay, and Venezuela. As the organization continuously grew, its Financial Planning and Analysis (FP&A) functions were still performed in Excel and were not sustainable for long-term growth. Gerdau decided to implement SAP Analytics Cloud to streamline financial reporting and make data-driven decisions by digitizing business processes and gaining operational efficiencies.
Customer Situation and Pain Points
Within the North American region alone, Gerdau hosts 10 steel mills, 5 downstream units, and 21 recycling yards, with the recycling yards producing scrap metal which fuels their still mills and enables Gerdau to downstream into further operations and produce roughly 5 million short tons of steel per year.
Aside from minimal automation with VBA and macros, Gerdau’s FP&A activities were heavily Excel-based. With each location having individual variations of standard Excel templates, the consolidation process became inadvertently complex and created a new set of challenges including:
Excessive time dedicated to refreshing data prior to starting the forecasting process
Maintenance of Excel files with myriad tabs and data put added hardware pressure on individual users’ computers
Interrupted or delayed forecasting due to code-inexperienced users performing consolidation
Increased errors resulting from the controller’s updates to any of the multitudes of Excel tabs
Combined, these challenges posed additional strain on Gerdau’s bottoms-up forecast process. After receiving the initial bottoms-up submission from each mill, the FP&A team had to rely on its employees to manually perform a high-level adjustment or the controller to re-input assumptions and resubmit the results. This was simply not an effective or sustainable way to perform consolidation and Gerdau needed a solution that would enable it to streamline FP&A processes and scale to meet its business requirements and outcomes.
Selecting SAP Analytics Cloud
On their journey to find a modern solution, Gerdau began an extensive search in late 2019 comparing and ranking multiple vendors including Anaplan, Workday Adaptive Planning, Prophix, Board, SAP Analytics Cloud, and other providers of extremely specialized software against extensive criteria set. But the evaluation proved to be no easy task as the solution had to meet the following criteria:
Finance- driven in nature to eliminate reliance on IT support for routine tasks
SAP integration to allow for easy data import and export from and to SAP
Enhanced flexibility that enables simple manipulation/mirroring of SAP results
Scalability for quick expansion into new use cases
Increased security to enable users to work with confidential data in personnel planning with confidence
After a short halt in its search due to COVID in 2020, Gerdau picked up its evaluation journey, leveraging Gartner’s research and the Magic Quadrant, noticing SAP’s significant growth during the pandemic. With this evidence coupled with its own scorecard of several vendors, SAP Analytics Cloud was a clear winner.
SAC offered Gerdau the flexibility and security it needed to adapt to new situations and scale quickly. With SAC, Gerdau would be able to utilize SAC to simply analyze complex organizational structures and plan at a granular level by segregating appropriate data and easily protecting confidential information with advanced data security measures. From a finance perspective, Gerdau could leverage SAC to make changes to calculations by cutting through the red tape. Additionally, SAP Analytics Cloud offered a plethora of integrations which Gerdau looked to implement in nearly every area of its operations.
Implementing SAP Analytics Cloud with Analysis Prime
As COVID spread through the globe and put halt to many operations, Gerdau’s project was in full swing, with Analysis Prime as its trusted implementation partner. Adjusting to the new normal, Gerdau and Analysis Prime’s delivery team worked very closely remotely, conducting multiple sessions each day for several weeks to ensure a smooth process of transitioning to SAP Analytics Cloud.
“It’s extremely difficult to move from an Excel template you’ve been using for the last 10 years to a more systemized process. Analysis Prime’s team was very knowledgeable and helped walk us through the process.” - FP&A Manager, Gerdau
In preparation for implementation, Gerdau engaged in an extensive project blueprinting process, mapping out several different use cases for SAC, focusing on Q6 forecasting. Being a true bottoms-up and most data-intensive forecast, it would provide the FP&A team with the most granular data that could be used as a building block for future forecasting processes including mid-month forecasts and more importantly long-term roadmap planning including high-level scenarios of up to 10 years out and what/if scenario planning.
During the process, Gerdau worked very closely with Analysis Prime’s delivery team who was able to make necessary changes quickly, making sure the system worked as Gerdau needed it to. Along with multiple training sessions, Analysis Prime helped Gerdau curate training documentation to help its users get up and running in no time.
“ Analysis Prime made themselves available pretty much all the time. They were extremely flexible and timely in their responses which our team really appreciated." - FP&A Manager, Gerdau
Overcoming Challenges and Measuring Success
Through tight-knit collaboration, Gerdau’s Accountants, Controllers, and FP&A users are currently successfully using SAP Analytics Cloud for its 6Q forecasting processes as well as bill of materials (BOM) planning, allowing the customer to drill down into data including full inventory, for enhanced accuracy of its forecasts. Now, its FP&A team has a standardized approach to sharing and collaborating in real-time and simplifying its consolidation process to make data-driven predictions for the future.
But before a successful go-live, Gerdau ran into its own set of challenges to overcome including:
Resource management: blueprinting, design, and testing tasks put additional stress on controllers’ and accountants’ daily responsibilities, leading to minor project disruptions due to key project personnel changes during the project.
Time constraints: the pandemic restricted real-time collaboration, limiting availability, collaboration, and contribution of all team members to a set number of remote meetings.
Limited focus: by focusing too much on certain divisions, it became increasingly difficult to model in smaller operations, causing minor issues in the holistic picture of the business.
To learn more about Gerdau’s first-hand experience with SAP Analytics Cloud, listen to our live interview with Larry Duke, Manager of FP&A at Gerdau. Find out how you could streamline your financial planning processes today by requesting a free, personalized demo from a product expert today and discover success stories of other customers here.