23 june 2009
GMCS automated budget management at Freight One
GMCS completed a project for the establishment of a comprehensive automated budget planning system at Freight One, an RZD subsidiary and Russia's largest rail transport operator. 


The new budgeting information system based on IBM Cognos Planning covers 16 branches, 18 financial responsibility centers and the client's subsidiaries. Already during the implementation stage, the Freight One budget for 2009 was formed in the new system.


As part of the project GMCS automated short-term and strategic budget planning processes. In particular, a strategic planning model was created based on the Morgan Stanley international financial model that was adapted by GMCS consultants in collaboration with Freight One specialists with account of the specific nature of the rail transport operator's activities. Thanks to the integration of IBM Cognos Planning with the Freight One management information system the task of uploading actual data for plan/actual analysis of budget execution was solved.


The automated budgeting system is currently in operation and is used by Freight One employees to accomplish various tasks such as forecasting profits and losses, planning carriage repair costs, forming investment plans in order to expand the rolling stock, including plans to take out loans to purchase new carriages. Using the new information system the company's management may carry out optimum financial planning from the point of view of allocating the rolling stock. IBM Cognos Planning is also used to form internal financial budgets for management costs of the head office and its branches.


Bearing in mind the amount of tasks solved, the project was completed on a very tight schedule – just five months. During the project the number of participants of the budgeting process initially planned by Freight One management significantly increased. With account of the client's requests, GMCS ensured the possibility of new users working in the system, including employees of Corporate Communications, Legal, Human Resource, Logistics and Planning, Financial and Tax Accounting, Economics, Corporate Finance and IT Departments of Freight One.


"We were able to see the advantages of the new budgeting system already during its implementation," says Konstantin Voyevodin, Deputy Head of the Economics Department at Freight One. "Thanks to the user-friendly interface the system's users both in the central and in regional offices were immediately able to start working in IBM Cognos Planning to a full extent, thus speeding up the first results, in particular in terms of planning short-term budgets."


"The project at Freight One proves that budgeting systems are currently in great demand among large companies with a complex financial and organizational structure," comments Yevgeniy Yerofeev, Head of the BPM Systems Department at GMCS. "In current economic conditions such systems are used by companies as the main tool for anti-crisis management and help flexibly manage external and internal budgets, quickly reacting to changing market conditions."



About Freight One


Freight One is the major railway operator in Russia. It was established in July 2007 with Russian Railways (RZD) as a major founding member and ordinary shareholder. PGK's share in the Russian rolling stock is 21%. PGK offers a full spectrum of freight services including: 24-hour dispatcher’s supervision, freight forwarding and tracking in railway and multimodal communications, tariff setting, marketing and legal advice in the course of projects. PGK's key short-term objectives are to renew its rolling stock, reinforce market positions, and increase capitalization.

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