With almost 15,000 employees, a consolidated turnover of around 5.5 billion Swiss francs (about $6 billion USD), and around 1.3 million passengers a day, Passenger Transport is the largest division in the Swiss Federal Railways, known locally as SBB. The basis for Passenger Transport’s operation is integrated corporate planning within SBB’s financial plan, which looks ahead several years. Many steps are required to build the financial plan.
“The linchpin for us is the timetable,” says Urban Ehret, CFO of SBB Passenger Transport, when explaining how planning in the Passenger Transport division differs from other companies. “In a yogurt factory, sales planning starts with the production plan. With us, the timetable determines the demand and production planning—and once the timetable has been published, it is fixed.”
Planning at the railway has two other unusual attributes: First, SBB must plan its business on extremely long timeframes—up to 100 years for infrastructure routes (that is, railroad track) and around 25 years for the train cars themselves. Therefore, medium-term corporate planning—the primary horizon that Ehret’s team operates on—is done on a six-year time scale. Second, SBB is vertically and horizontally integrated, which makes planning within the divisions large and complex. Sales, services, IT, maintenance, and other business units operate independently, but are mutually dependent on one another. In the Passenger Transport division alone, around 30 SBB business units coordinate plans with each other.
20 workbooks, 12,000 scripts, and a game of telephone
The complexity, scope, and number of business units involved in planning made it clear that SBB Passenger Transport needed a professional planning tool. But before such a platform could be deployed, the company standardized its business and planning logic in spreadsheets by building a prototype that it could later transfer to a professional planning environment.
The scale of the project was huge: 20 workbooks with as many as 150 tabs apiece were created, and 12,000 scripts were written to control the data exchange among spreadsheets. Internally, the prototype was affectionately known as the “Jungle Book,” and its individual components were named after characters from Rudyard Kipling’s novel.
The limitations and problems of a spreadsheet-based approach quickly became obvious. Different business units worked with different budget figures, so exchanging information was like a game of telephone at a children’s party: a number might start out as X, but by the time it got into the planning system it had become Y. “If you do not share the same database, you can neither coordinate nor reliably plan joint capacities,” explains Fabia Odermatt, Head of the Controlling Service Center on Passenger Transport’s finance team. In addition to the risk of errors, the large number of data integrations created performance problems: If consolidations within one unit were pending, the aggregation of the entire system could take days.
And there was a further challenge: SBB’s financial plan is the basis for public subsidies in regional transport. The federal government and various administrative regions (known as cantons) use the financial plan to understand the need for subsidies. Furthermore, an audit trail is mandatory for compliance purposes, but Jungle Book spreadsheets couldn’t provide one.
Finding an ideal new planning platform
The criteria were therefore clear: The new planning solution should be auditable, because the Federal Office of Transport and the external and internal auditors also require comprehensible transparency. Above all, planning needed to become more integrated, easy, and intuitive.
“Flexibility—the ability to adapt to new circumstances—is also an important criterion for us,” Ehret says. “We have frequent organizational changes and regularly need to restate our financials. It is important to be able to adapt our planning quickly, and to do so as independently of the IT department as possible.” Additional criteria were the networking of plans in real time (that is, Connected Planning), and simulation/scenario planning capability. If fewer people are traveling because of COVID-19, for example, how and where can costs be reduced? Unforeseen events like this make the ability to simulate alternatives a necessity.
Anaplan: Integrated planning with a high degree of maturity
In 2019 the team started looking for a new planning solution, and through a standardized selection process, Anaplan was chosen as the new planning solution for SBB Passenger Transport. As the successor to the “Jungle Book,” Anaplan fulfilled the requirements: easy use and IT independence, backed up by a convincing proof of concept. Additionally, numerous references such as Nederlandse Spoorwegen, the Dutch National Passenger Railway, demonstrated “the degree of maturity of the solution, because the required functionalities are numerous and the planning is complex,” recalls Odermatt.
Connected Planning with calculations in the cloud
Anaplan’s Connected Planning approach was particularly convincing because it directly addresses the 12,000 scripts in the prototype solution. “The calculation power and connected nature of Anaplan are exactly what we needed to seamlessly integrate financial planning with sub-planning at the operational level at SBB,” says Ehret. Because Anaplan is cloud-based, no technical setup was required; once the contract was signed, the system was accessible and construction of the financial planning environment in Anaplan could begin immediately.
To assist with that construction, SBB secured support from IT and process consultant valantic, an Anaplan partner. “Together we modeled the financial planning prototype from the Jungle Book in Anaplan using a coaching process, Odermatt said. “valantic worked with three SBB model builders to apply best practices and professionalism to the build, and their coaching enabled us to create the planning models on our own.”
Scenario testing delivers faster reaction to change
Teams at SBB built out new financial planning models using Agile methods. As COVID-19’s effects evolved, the ability to react and model scenarios took on new importance. Project and investment planning models were implemented earlier than originally expected and connected with the financial plan. This was the only way to create scenarios for the changing conditions related to around 350 SBB projects valued at about 1 billion Swiss francs. For example, if requirements for the IC 2020 train modernization project were to change, how many staff members must be recruited? Can changes be accommodated with overtime pay? Will there be delays in the project? “Instead of playing games of telephone, we were quick to react and make adjustments thanks to Anaplan’s ease of use,” explains Odermatt.
Answers in a day, and soon in just minutes
Today, medium-term corporate planning—done on a six-year planning horizon—is fully integrated and takes place in real time. At the same time, the foundation has been laid for migrating and integrating other business unit plans to Anaplan soon. In the meantime, integration is still done through intermediate steps, but the process is continuously optimized, explains Marcel Kummer, team leader in the Controlling Service Center of SBB’s Passenger Transport finance department. Long-term financial planning, with a 30-year planning horizon, will be integrated later.
Although there is still some distance to go, SBB has achieved a lot, Kummer says. “Around 100 planners now work regularly with Anaplan and are satisfied,” he says. “Before we had Anaplan, consolidations kept four people working for around four hours. With Anaplan, consolidation is much more quick and efficient.”
The investment planning process has been shortened by six weeks, but the qualitative improvements are even more important than the time savings. “The improvements enabled by Anaplan mean that the right questions can be raised in the planning discussions,” Kummer says. “Instead of asking ‘Which numbers are correct?’ we’re considering substantive questions such as ‘Where are we lacking resources, and how do we respond?’ These are the things management should discuss.”
Transparent, real-time planning is a pleasure
Corporate planning at SBB has made a qualitative leap with the new solution. “With Anaplan, accuracy is increased and the numbers are auditable,” summarizes Ehret.
And because manual, error-prone tasks belong to the past and business unit plans communicate with each other, aggregations and simulations can be created at the push of a button. “With this option, Anaplan enables us to proactively control planning,” says Odermatt. This gives planning greater relevance in SBB’s overall strategy. “Today we know at an early stage where the financial or human resources are insufficient, and we can take active measures to get back on track. Because as we all know, a train without an operator doesn’t get to its destination.” This is what Ehret and his colleagues in SBB’s decision-making bodies do: Keep the company on track so that SBB trains will reach their destination safely and on time for the next 30 years.