An Airline Expense Accounting & Budgeting Solution

1. First Challenge
The Finance department of the airline processed invoices related to services like fuelling, catering, over flying, landing, parking, etc. at over 50 locations, based on station-specific business rules. These were carried out using spreadsheets or calculators and the debit and credit accruals were manually entered into a Financial Accounting System.

The Finance department also had the responsibility of preparing budgets based on planned rotations and operational data of the past. Multiple versions of the budget were prepared using spreadsheets and analyzed, before arriving at the final version. This was a manual and painstaking three-month long exercise prone to errors. The process of invoice verification was tedious and time-consuming too. Automation of all these processes appeared to be the only solution to these problems.

IBS Solution
Requirements elicitation was carried out at the client’s location by a team from IBS that comprised functional and technical experts. This ensured that the team understood the business processes accurately. The phase involved detailed discussions with the stakeholders of the application to finalize the scope of the application, and documenting them.

The project followed the waterfall life cycle model. The solution was developed as a three-tier application with IE web browser as the client, Forms 10gAS Services in the middle tier and an Oracle 10g database. IBS thus developed a solution, a Budget and Interface Tool that addressed all the requirements of the client.

Business Benefits
A strategic IBS-built solution that realizes the ambitious growth plans of the airline, helping the airline to:
• Conduct route profitability and break-even analysis and thus improve yield from existing routes
• Enables management to take quick decisions on new flight routes
• Saves time for preparation of monthly/annual MIS reports
• Simplifies the invoice verification and budget creation processes substantially

2. Second Challenge
Shortly after the first engagement, the client satisfied by IBS’ performance approached us with a new set of requirements.
The airline’s Finance Department would collect information from different stations and consolidate them to generate monthly reports for revenue categories such as: PAX, EBT, Cargo, Courier, Mail, and Freighter. This demanded the scrupulous attention of two persons for five days.
The Finance Department, after collecting and consolidating the Origin-Destination-wise revenue budget for the above-mentioned revenue categories from all the stations, had to manually compute the total revenue budget for the airline. This one-month long process called for extreme care and great effort of at least two persons.
Thus, the airline felt the need to automate the preparation of Monthly Accounting and Revenue Budgeting to overcome the difficulties faced due to manual processing.

IBS Solution
The experienced team, who was involved in the first phase of this project went to the client location for requirements-capturing and had elaborate discussions with the stakeholders. This gave them a clear-cut insight into the problems faced by the airline.
IBS’ solution, developed as a multi-tiered application with Web Browser Interface automated the Revenue Budgeting and Monthly Accounting process, thus fulfilling the clients’ requirements. This solution based on the waterfall life cycle model also provided a dynamic reporting functionality.

Business Benefits
The new application provides the following business benefits:
• Automation of Revenue budgeting and monthly accounting
• Users are able to generate customized reports for day-to-day operations
• Seamless Integration with other Monthly Accounting and Revenue budgeting systems
• Central repository of information
• Increased work efficiency by 75%

3. Third Challenge
Over time, the airline experienced stunning growth in their business which necessitated changes in their existing systems. The Finance department was unable to carry out all the activities by itself and sensed a need to decentralize their operations. The need to process budgets for multiple years was apparent as the current financial system was designed to process budgets only for a single year. The Airline thus, wanted its Budgeting System to be more flexible to cater to the needs of the changing business scenario.

IBS Solution
IBS developed an enhancement to the Airways Budget and Interface Tool, which aided the overall growth of the airline. The in-depth discussions with the users of the Budget and Interface tool helped IBS in providing the right solution for the airline. The solution was developed as a three-tier application with IE web browser as the client, Forms 10g Services in Oracle 10gAS in the middle tier and Oracle 10g database. The solution provided station-wise access for the invoice module and incorporated a rules engine for cost apportioning to increase flexibility. This facilitated the use of the Budget Interface Tool from the station itself allowing the stations to post account entries directly to Oracle Financials. The solution also had provisions to compute budgets for multiple years.

Business Benefits
The application provides the following business benefits:
• Made the invoice module available to all stations thus saving time taken for collecting and consolidating Invoice data
• Decentralized invoice and accrual calculations at stations
• Provision to compute budgets for multiple years
• Allows micro-level tracing to budget components, by providing drill-down feature
• Increased flexibility and user friendliness

4. Fourth Challenge
The Finance department of the airline faces difficulties in dealing with large volumes of data for manually preparing Manpower Budgets i.e., Capex Budgeting and Overheads Budgeting.

Manpower Budgeting involves complex calculations based on certain rules for Human Resource activities, which cannot be executed using spreadsheets. The information from different stations and departments is collected and consolidated manually to prepare the budgets, which demands a lot of time and effort. Hence the airline felt the need to automate its Manpower Budgeting, Capex Budgeting and Overheads Budgeting applications.

IBS Solution
IBS is developing a budgeting application - Capex- that will replace the current manual system used by the airline, with a simple and flexible automated system. The application will include the features of Manpower Budgeting, Capex Budgeting and Overheads Budgeting. The Expenditure Budgeting Module is being developed as a three-tier application with IE web browser as the client, Forms 10g Services in Oracle 10gAS in the middle tier and an Oracle 10g database. The project follows the waterfall life cycle model.

Proposed Business Benefits
The application provides the following business benefits:
• Access control implementation at all stations and departments
• Report generation in different versions with functionality to com pare versions and data transfer between versions
• Transparency in calculations / computations
• Comparison and KPI reports (actual & budget, previous year & current year) for analysis

About the Client
A national carrier and one of the fastest growing airlines in the world flying to destinations across Europe, the Middle East, North Africa, the Indian subcontinent and the Far East.
The airline operates a fleet of more than 30 Airbus aircrafts and expects this to increase to more than 50 aircrafts by 2008. The increase in passenger revenue and number of passengers carried are testimony to the faith passengers place in this airline.

Key Features
• A web-enabled solution that facilitates ease of deployment across multiple locations
• Supports route profitability and break- even analysis with specifically designed algorithms, taking into account the fixed and variable operating costs
• Generates Expense budgets of the airlines based on planned operations and past data
• Enables the airline to accurately account for various operational expenses incurred
• Through an interface posts accounting details to the Financial Accounting System
• Enables custom configuration as the application is highly parameterized
• Helps easy verification of invoices