Grupo Aeroméxico approves purchases in seconds instead of months while improving control; consolidates financial data 40% faster with Cloud Solution

Standardize the group’s 26 operating companies on a single enterprise application platform to consolidate information and gain greater visibility into airline costs and financial performance

Improve the quality and availability of information, including payroll, operational costs, and inventory, to make more informed and timely decisions

Automate the procurement process to accelerate and improve control over purchasing

Issue financial reports with detailed information about costs, including aircraft purchases and payments to ground personnel, allowing for more accurate analysis to increase profitability

Focusing on Process Improvement

The group first rolled out Oracle E-Business Suite Managed Cloud Service to Aeroméxico, which generates most of the group’s earnings, with the goal of transforming business processes.

Even though every company in the group is part of the whole, we were not acting like it. Each subsidiary had customized systems, and we were using technology to support integration tasks and manual consolidation, instead of enabling processes for analysis and performance improvement. As such, we lacked the visibility needed to create more actionable financial reports and make more informed business decisions,” said Benjamín Hernández Sepúlveda, corporate director of technological development, Grupo Aeroméxico.

We standardized on Oracle E-Business Suite Managed Cloud Service for several reasons, including the catalog integration, system unification, and ability to analyze all transactions at the group level,” said Luis Islas, sub-director of finance, Grupo Aeroméxico.

Oracle Managed Cloud Services provides us the best hardware infrastructure and world-class application management. We selected Oracle Managed Cloud Services to support the solutions, since this guarantees scalability, high availability, and effortless maintenance,” Hernández said.

With Oracle Purchasing, we standardized purchase flows for all companies and benefited from self-service capabilities. As a result, we are eliminating all paper from the purchase request process. Previously, purchase authorizations could take up to three months. Now, they take seconds, and we have greater visibility into the process,” said Jorge Espinosa, technical procurement manager, Grupo Aeroméxico.

The company also has greater control over expenses and procurement requests. “The most important benefit pertains to direct staff requests using Oracle iProcurement, either for purchase requests or internal requests to our warehouses. We have rolled out the solution to approximately 1,700 employees, 35% more than we had originally targeted, with the addition of groups such as the ground staff of Aeroméxico and Aeroméxico Connect, which are the two airlines with the highest number of employees. We extended our rollout because of the value that the system delivered,” Espinosa said.

Grupo Aeroméxico has a complex supply chain, which includes purchases of stationery, staff uniforms, and materials for building maintenance. Each company managed the process differently.

Using Oracle Inventory Management Cloud Service, we significantly improved inventory management efficiency across our enterprise. The central storage facility is more efficient in fulfilling requests, and those making requests can easily check on their status in the system. With accurate inventory, we can deliver materials to users on the same day of the request, whereas before the time frame was three to four days,” Espinosa said. “This is a quantum leap in terms of procurement and supply chain control and efficiency, which we have achieved thanks to Oracle applications.”

We now have an enterprise-wide repository of all suppliers, clients, and account data, aligned under a single accounting methodology. Today, all of our companies use the same suppliers, so there is just one supplier for stationery, for example, which creates a procedural synergy that leads to savings,” Islas said.

Streamlining HR Management

“We wanted to standardize and improve the efficiency of HR management across all group companies,” said Isabel Ríos, human resources project manager, Grupo Aeroméxico. To achieve this goal, the holding company simultaneously implemented Oracle Human Resources Managed Cloud Service for five companies in Mexico, encompassing more than 14,000 employees.

The company’s legacy HR system presented many challenges, including difficulties in standardizing payroll processes, accommodating contracts for different groups of workers, including pilots and flight attendants, as well as streamlining the recruiting process. “The overall plan was to simplify HR management,” Rios said. “Now all HR-related information is located on a single platform, providing greater visibility into resources.”

“With Oracle Payroll Managed Cloud Service, we now use automated funds transfer to pay almost 14,000 people—which is faster as well as more accurate and cost-effective. The system automates payments, separating them according to the various banks and financial accounts where our employees have their accounts,” said Olivia López, payroll manager, Grupo Aeroméxico. The company also loaded the requirements for each collective labor agreement into the system.

“There are 12 groups per company, including pilots, flight attendants, on-board executives, and customer service representatives. Previously, we managed each collective agreement separately. Today, they are unified under the same system, reducing complexity and accelerating the payment process. We also can more effectively track absenteeism,” López said.

“Previously each company managed recruiting independently, and it was largely a paper-based process that was not standardized across the group. With Oracle iRecruitment Managed Cloud Service, we have integrated the recruiting process, gaining greater control from the time a person applies until he or she is hired. We also have a consolidated record of applicants and greater hiring efficiency,” López said.

Expanding Financial Analysis Capabilities

Grupo Aeroméxico also wanted to consolidate financial information for all companies to gain greater insight into and control over its financial performance. “Oracle Hyperion Financial Management Managed Cloud Service allows us to consolidate the financial information from all the companies to drive more informed and timely decisions,” Islas said.

The companies from the group create monthly balance sheets for each business, and the group displays a consolidated version including all the companies. “We reduced account reconciliation from five days to three days, for more timely performance information,” Islas said.

“We now have more detailed information on operational expenses from procurement, HR, and payroll functions. Having all information within a single database and a single enterprise application platform helps us to deploy indicators for analysis and decision-making purposes,” Islas said.

“With Oracle Hyperion, we have greater visibility into operating costs, giving us greater control over spending and allowing us to expeditiously question any deviations from what the company has planned. We can now quickly create reports on crew costs, traffic and layover costs, aircraft maintenance, in-flight services, airplane rentals, and financial debt, giving us more time for analysis and follow up,” Islas said.

"We chose Oracle E-Business Suite Release 12 for several reasons. First, the solution could meet our finance management requirements for 26 different companies without the need for customizations. We also took into account the strategy, methodology, implementation time, experience, the strength of Oracle Consulting, and overall cost. Another important factor was that the solution is available in the cloud, which allows us to focus our resources on the implementation."
— Benjamín Hernández Sepúlveda, Corporate Director of Technological Development, Grupo Aeroméxico

Grupo Aeroméxico worked with Oracle Consulting to implement Oracle E-Business Suite Managed Cloud Service in phases, starting with the roll out of Oracle Financials in Aeroméxico.

The company first consolidated all of Aeroméxico’s financial information onto Oracle Database, Enterprise Edition Managed Cloud Service, and then integrated information from the other companies into the same database. This approach enabled the group to use consolidated information for enterprisewide reporting.

The group wanted to ensure that it effectively trained users on the new system. To support this effort, it used Oracle User Productivity Kit Professional. “Key system users documented each of the business processes and manual tools, which we later published on our online portal. This became the foundation for training the rest of our employees outside Mexico. Thanks to Oracle User Productivity Kit Professional, we incorporated all of the knowledge about the solution without any inconvenience,” Hernández Sepúlveda said.

“We went live with Oracle Financials in 10 months at Aeroméxico, as planned,” Hernández Sepúlveda said.

Implemented Oracle E-Business Suite Release 12 Managed Cloud Service as the group’s standardized enterprise application platform, enabling it to create a consolidated balance sheet for all group companies in three days instead of five days

Automated and eliminated paper in the procurement process and gained the ability to approve purchases in seconds instead of months

Improved control of payments and expenses for staff requests using Oracle iProcurement

Automated calculation of employee paychecks with Oracle Payroll Managed Cloud Service for personnel in Mexico, including pilots and flight attendants, complying with the requirements of the various unions

Used Oracle Hyperion Financial Management Plus Managed Cloud Service to automate financial consolidation across several companies, improving financial decision-making

Improved profitability thanks to expanded financial reports, including crew costs and layover costs, aircraft maintenance, and corporate debt

Ensured scalability, high availability, and effortless maintenance using Oracle Managed Cloud Services to support the Oracle solutions