financial planning and controlling at VTG

Budgeting, Planning & Forecasting

- 3 min read

Financial planning and controlling of multimodal freight transport at VTG

Solid logistics planning is fundamental to success in freight transport. It is always annoying when transport capacities are not used, for example, on the return journey. And to digitize financial effects from the business is fundamental for the finance department to serve as business partner for the operational departments. This is also true at VTG, a leading international wagon hire and rail logistics company with around 94,000 rail freight wagons, the largest private fleet in Europe. VTG’s business has evolved from purely hiring out rail freight wagons to multimodal freight transport, which includes combining rail and road transport and other logistics services. This, of course, makes the business much more complex. For Björn Schwarten, Head of Group Finance at VTG, it is therefore vital to continue digitizing freight traffic and its financial impact, “This is the only way we can keep pace with the increasing complexity!

For this reason, having robust financial planning software is essential. Björn adds:

We want to be able to map the actual state and the target state at any time and look at where we stand. The data is already there, but we need to increase accessibility and transparency to identify, plan and model future risks and opportunities. This is not really feasible with separate Excel files. That’s where we want to benefit from a single point of truth that Board shall provide us automatically, anywhere we need though through mobile device functionalities.

This also eliminates the need for ‘shadow accounting,’ where many divisions build up their own world of figures because they don’t feel properly served by centrally provided information.

Different requirements

The requirements for the level of detail of the data vary significantly within the company. In operations, the view goes down to the individual wagon level. For example:

  • Which wagons belong to a particular contract?
  • How long does the lease run?
  • Under what conditions can the wagons subsequently be hired out again?
  • What maintenance costs will VTG incur?

The Data model must provide all this information. The central finance department at headquarters, on the other hand, tends to emphasize the top-down view. “I am primarily interested in the general utilization of our wagon fleet,” says Björn. “If the target is, for example, a utilization rate of 90%, I want to know whether we are achieving it, why we are above or below it, and where we have the potential for optimization. By drilling down deeper into the data within our integrated data model, the single point of truth, we can get all of this.

Self-service function supports the new role of finance

For Björn, however, there is another good reason why companies need good financial planning software. This is due to the changing role and the new self-image of the central finance organization.

I don’t think anyone in Controlling really enjoys purely compiling figures and data from various sources for other departments, not understanding why they develop the way they do. Our aspiration is rather to be a partner and, in a certain sense, the ‘financial conscience’ of the operating divisions. We want to demonstrate to the divisions how their business is going and discuss the “why” to jointly develop strategies to improve performance.

Also, we’d like to assist in translating strategic business ideas into numbers to assist in the decision processes. In this context, it is helpful if the divisions can perform self-service analyses to answer many of their questions themselves and understand the financial impact. But to do that, I need a good and user-friendly platform.

With self-service, divisions or regions at VTG shall get access to all the data relevant to them. At the same time, the data is protected so that even a less experienced user cannot break anything. They cannot overwrite formulas or delete data by mistake. Standard reports are available for the divisions or regions, showing them discrepancies, for example. From there, the user can drill down to look at the numbers that are of interest to them. This allows the user to analyze the reasons for the variances.

The prerequisite for this is that the software is self-explanatory,” says Björn. “Otherwise, it will either not be used or – even worse – the wrong settings will be made, or filters will be set and lead to wrong results and conclusions.

Access to current data at any time

Björn adds another reason why a professional planning solution like Board is essential:

It simply creates transparency across all hierarchies. My professional roots are in financing. I often think of the situation of the CFO who has a meeting with banks or investors. He has to have answers ready to the sometimes-detailed questions of his counterpart. Even the CFO can’t always have all the details in his head. But with a reliable central planning tool and good financial reports, he has access to all the figures, can respond to different situations and be sure that they reflect the current status.

VTG is driving performance with Board as a financial planning platform. Both the operational divisions and the central finance department benefit from reliable data that helps them get to grips with the complex requirements of the business.

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