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China’s power industry is facing a challenging future. On one hand, the national “Dual Carbon” strategy calls for implementing new development concepts centered on innovation, coordination, sustainability, openness, and sharing, placing emission reduction pressure on power companies. On the other hand, amid nationwide coal shortages and rising coal prices, power enterprises also confront volatile operating environments and intensifying market competition. Under these dual pressures, power companies urgently need management innovation to reduce costs, increase efficiency, and optimize assets.
▌ Project Objectives
A certain coal-power company, whose main business includes thermal power generation, coal production, logistics, and heat supply, operates multiple business departments. Against the backdrop of rapid development, the company has emphasized new development concepts through cost control, refined management, and efficiency improvements, exploring new models to reduce costs and increase efficiency. This supports the company’s “Dual Carbon” goals and high-quality development.
In recent years, aligned with strategic management needs, the company launched a comprehensive budget management and performance appraisal system project. The Business Management Department and IT Department collaborated with Intcube’s expert consultants to form a project team. Using comprehensive budget management as a tool for strategic and operational control, and building on existing budgeting practices, the project established a modern comprehensive budget management system incorporating advanced concepts, technology, and management methods.
A preliminary study identified the following issues in the company’s original budget management approach:
● Reliance on Manual Processes, Cumbersome Budgeting: Most budgeting tasks, including distribution, filling, and consolidation, were done manually. This required significant labor, lacked efficient cross-department communication tools, and made it difficult to control the process. The inability to share data in real time led to errors and compromised budget quality.
● Post-Event Control, Weak Budget Oversight: The absence of preemptive and process control tools meant budget issues were only addressed after the fact. This reactive approach made it difficult to provide timely feedback and adjustments, undermining effective budget execution.
● Isolated Data, Delayed Budget Analysis: Analysis and control were primarily conducted after the fact, making it difficult to proactively capture business dynamics. Isolated business systems caused a disconnect between budget data and operational data. Large volumes of data could not be comprehensively integrated into a unified budget management system, resulting in non-intuitive analysis outputs and an inability to forecast or analyze variances in the power industry’s business and market conditions.
▌ Project Implementation
During the preparation and initiation phase, Intcube’s team held multiple thematic meetings with the company’s project group. It was decided to focus first on the comprehensive budget management system, followed by the performance module. The approach was gradual—starting with optimizing the budget management system, deploying a unified budget management platform, and eventually enabling scenario-based budget analysis to support business development. This achieved a comprehensive upgrade in budget preparation, control, analysis, and performance management.
Improving the Budget Management System and Establishing a Multi-Dimensional Budget Model
The budget organization and accounts of the coal-power company were thoroughly reviewed. Based on corporate strategy and planning, an annual budget target linked with monthly rolling forecasts was established, creating a budget reporting model covering all businesses, processes, and cycles. Using a unified digital budget management platform, actual accounting figures were automatically extracted, enabling easy budget reporting and actual-versus-budget analysis. The multi-dimensional budget model clarified responsibility units and control benchmarks, forming a dynamic control process covering pre-event, in-process, and post-event phases. Variance analysis allowed timely operational adjustments and budget execution reviews, promoting continuous improvement in budget assessment.
Building a Data-Driven Comprehensive Budget Management System to Lead Business Development
By connecting business and financial systems, the comprehensive budget management system established a digital twin of physical operations and the budget model. It integrated planning, budgeting, accounting, control, analysis, and appraisal into a unified informatized platform. The solution enabled the issuance and decomposition of budget targets based on strategy and operational plans, followed by budget filling by subordinate organizations, data reporting and approval, multi-version budget management, budget adjustments, execution monitoring, and forecasting analysis. This digital approach empowered comprehensive budget management, enabling rapid sharing and dynamic analysis of business and financial data, thereby improving efficiency and accelerating management and decision-making.
Open Interface Platform with Maintainability and Scalability
Designed based on a multi-dimensional database platform, the comprehensive budget management system efficiently integrated business systems and unified data management standards. It provided the company with a budget management platform that supports multi-system integration and data collaboration, meeting integrated office requirements. The system also offered high security, stability, and usability, facilitating maintenance by the IT department under new products, users, and management structures. It supports future upgrades and expansions to accommodate new requirements and management models, enabling smooth online system upgrades.
▌ Implementation Results
As a modern integrated coal-power enterprise striving to become “safe and efficient, energy-saving and environmentally friendly, technology-driven, innovative in management, sound in investment, and internationally first-class,” the company has continuously adopted modern corporate management systems to improve capital operational efficiency. The comprehensive budget management system project represents a management innovation in response to intense market competition and transformation.
Starting with comprehensive budget management, the project enhanced the company’s management through digital upgrading. It established a scientific, rational, standardized, and efficient unified platform for comprehensive budget management, unifying indicator systems, budget forms, compilation methods, and control rules. The system enables closed-loop management across the entire budget cycle, including modeling, preparation, approval, execution, control, adjustment, analysis, and performance evaluation. The application of the budget management system not only helps improve efficiency and decision-making speed but also optimizes resource allocation, standardizes fund payment approval processes, and monitors production and operational risks, thereby continuously enhancing the company’s core competitiveness.
In the future, Intcube will continue to work with the coal-power company to further develop the performance appraisal module, supporting the company’s comprehensive budget management transformation based on operational management. This will empower the enterprise to achieve its “Dual Carbon” goals, promote high-quality development, and enable a green transition.
