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Product Cost Reporting:
Cox key personnel have started their cooperation with Nokia already in 1996. Nokia continued as a client when Cox was founded in 2003.
In 2003 it was decided that product costing for Nokia mobile phones that was done with factory/site specific excels should be renewed. The goal was to have a centralized, controllable environment and a one, common solution for the purpose. Cox was chosen as the consulting and implementation partner due their long and standing relationship with Nokia and expertise in complex management accounting solutions. Cox acted both as a main systems architect and main implementer. In addition, Cox was responsible for all cooperation with Nokia internal personnel, third party providers and Cox own personnel.
Product cost reporting project (PCR) was executed between 01/2003 and 04/2004. The system was approved for production in May 2004. PCR system provides product costs for profitability reporting system and as such in integral part of Nokia’s external stakeholder reporting including stock exchange information (NYSE, OMX). PCR system has undergone significant revisions in 2005, 2007 and 2008 due to organizational and operational changes.
What?
Product costing is a continuous process of change as new products emerge, old products cease to exist, product groups change, organizational hierarchies change, production methods change etc. Nokia requested that Cox continues developing the systems and provides financial period ending support during reporting times. The operational model has followed the needs assessment from business to detailed analysis of change impact to results. Based on these assessments, business issues are prioritized and implementation schedule is jointly agreed. The development work is first done in development environment and then transferred to QA for rigorous business testing before taking changes to production.
How?
Currently the system is built on Java based, tailored, ETL solution that integrates source data from mainly SAP BW / R3 sources to Oracle database that is also the chosen platform for product costing data warehouse. Oracle houses the calculation model hierarchies and changing periodical key data and they are combined to form the monthly calculation model. SAS Oros software is used to visualize and provide transparency to the calculation model. All reporting models are created in Oracle and ready processed data is distributed to end-users using Cognos and Hyperion tools.
PCR system is in use by more than 200 internal users. Through official reporting the summarized results are also available to public.
Activity Based Costing:
Cox has also built activity based costing (ABC) system for Nokia’s production plants. This provides Nokia with very accurate and detailed cost information with relation to production processes, enables rigid cost benchmarking and supports multitude of production logistics related decisions. Several of the SAP R/3 cost standards are based on the results of activity based costing (ABC)models. The activity based costing (ABC) system is based on the same architectural design as PCR providing significant synergy savings. The two systems (PCR & ABC) differ mainly in the detail level and number of source systems.
As in PCR, Cox provides the periodical reporting support and development services for ABC.
R&D cost reporting:
Cox is also responsible for Nokia R&D cost calculations, but due to sensitive nature on the data, we cannot provide more details.