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Case study Company name: European Commission
| Last updated: 25 Apr 2005 |
The European Commission improved its financial control and efficiency with a move from cash-based to accrual-based accounting, based on a SAP implementation with the help of IBM Business Consulting Services. |
Business need To improve its financial management and to meet the need to implement the International Public Sector Accounting Standards (IPSAS), the Commission had to change from a cash-based accounting system to an accrual-based system, a two-year project with a deadline of January 1, 2005. |
Key challenges The Commission's existing accounting system, based on SAP FM (Funds Management) and FI (Finance), communicated with the mostly home-grown systems used by each of the 36 individual directorates-general (DGs). The Commission needed help with this major transformation within the timeframe, and in late 2002 engaged IBM Business Consulting Services to carry it out. |
Solution IBM Business Consulting Services The IBM Business Consulting Services team was charged with implementing the new SAP modules. With an average of 10 consultants involved, the IBM team carried out the changes to the existing SAP modules and implemented the new SAP modules CO (Controlling Accounting), AA (Asset Accounting) and PS (Project System). Because the systems at the 36 DGs had to be revised as well to handle the new accrual methodology, IBM provided guidance to the DGs on the changes required. The IBM involvement carried through from the pre-study phase to the post-project support. The project was completed on time and on budget. |
Results As a result of the new system, the Commission has better control of financial data and can now see and control where and how money is spent. Several processes were streamlined as existing separate accounting functions were incorporated into the existing SAP system. Data redundancy was reduced, resulting in improved efficiency and data quality. Prior to implementing the PS SAP module, the Commission found it difficult to maintain a long-term financial view of projects, since budgetary accounting focuses on annual view (short term). Now it is better able to manage the accounting for multiyear projects. As part of a follow-on engagement, IBM is working with the Agriculture DG to reengineer its systems around the new accrual-based accounting methodology. |
Customer information | European Commission | | The European Commission is a body with powers of initiative, implementation, management and control. It is the guardian of the Treaties and the embodiment of the interests of the European Community. The Commissioners are assisted by an administration made up of 36 directorates-general and specialized departments whose staff are divided mainly between Brussels and Luxembourg. |
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