Case study list

GE Aircraft Engine Services Ltd (GE)

01/10/2009

Background

GE Aircraft Engine Services Ltd (GE) is a private sector company, which repairs and overhauls aircraft engines. It is part of The General Electric Company, $183bn turnover a worldwide group, with its headquarters in Connectictut, USA with over 300,000 people worldwide.

Summary of the initiative

A monthly, quarterly and annual reporting process has been developed, which provides information at both the local as well as the worldwide level. The culture of the organisation, supported by a high level of commitment by senior management, is that the financial reports are afforded a high degree of importance. Failure by GE and other branches to meet their obligations can potentially result in an adverse impact on the overall share price. Head Office monitors the returns closely and publishes a scorecard identifying those who have failed to meet their deadlines.

Benefits obtained and success factors

Each month departmental / cost centre managers receive detailed status reports. Managers provide explanations for variances, which are consolidated into GE's report to Head Office. These progress reports support the weekly interdepartmental meetings at which revenues and costs are reviewed. Three to four times a year, forecasting sessions are held, which lead to revisions of budgets for the current year and the detailed plan for the following year.

From an HR perspective, staff turnover is low and a high emphasis is placed on staff training.

The company places an emphasis on lean workflow which helps streamline the accounts close process, which enables the end of year closedown to be carried out efficiently and without delay.

In addition external audit seeks to obtain a great deal of assurance from the control environment. The reporting process facilitates their interim planning and testing work.

The outcome achieved

By using the same accounts process, GE produces its monthly, quarterly and financial reports in three days. Annual statutory financial reports are however prepared to UK GAAP standards and this annual exercise is a manual exercise which typically takes a month from start to finish. This enables the group to present its financial reports within the statutory and regulatory deadlines.