SAP Customer Journeys Lead to Finance Transformation
By John Yuva, Editor, SAPinsider
The drive to transform finance with SAP S/4HANA can stem from several factors — the need to standardize processes, mergers and acquisitions activity, a growing global landscape, or a combination of these dynamics pulling on the enterprise. It’s a journey that goes beyond technology and requires the human element for success.
During SAPinsider’s March 2020 virtual event, executives Laurence Uzureau, Global Finance Platform Lead for Cargill, and Robert Ersoni, Vice President, Global Business Services for Excelitas Technologies Corp., provided strategic insights into the success factors of their transformative journeys.
Watch the on-demand session: SAP S/4HANA Finance Customer Journeys: Innovative Business Use Cases That Have Delivered ROI.
This article summarizes six key insights shared by these leading companies, which can serve as a roadmap for other companies embarking on a similar SAP S/4HANA journey in their finance organization.
Insight #1: Establish the business case at the onset of the transformation process.
What do you want to achieve as an organization? What are your current processes and staffing requirements? How do you want to transform? How can you achieve that transformation through technology and process enablement? What are some of the challenges and implications on the business?
Finance reaches stakeholders throughout the enterprise and beyond, and a decision to transform has implications across those touchpoints. It’s imperative to know why a transformation needs to occur and what the target vision looks like.
Transformation involves more than technology and simplification. Having a vision at the beginning of the program can be critical to its success. While there will likely be learnings along the way and pivots based on those findings, staying the course to the central vision and the core of how finance wants to impact the business is essential.
Identify the potential strategy before making decisions about technology. If you’re adopting a global structure, like Excelitas Technologies, prioritize understanding how to structure the business and operate effectively to achieve your growth agenda goals.
And while the tangible benefits of a transformation are important to identify and quantify, intangible gains like user experience can be equally important. It can be challenging while building the business case to portray the endpoint to stakeholders. Only once they’re able to touch it and feel it does the speed of SAP S/4HANA and the access to data, for example, become real — and opportunities occur.
Insight #2: Do not underestimate the criticality of change management.
Technology implementation is an essential part of a finance transformation. However, without change management, employees are unable to transition successfully to new processes and systems. How will the project team engage with the employee base about the transformation? What is the messaging to employees? What business units outside of finance should be involved?
Transformation success relies heavily on the ability of employees to adapt to new technologies and processes. Communication with impacted employees and business units about potential decisions and project progress is paramount.
Create interpersonal relationships with every individual affected by the change and understand the implications for each person — regardless of the employee’s company title. While this can take time, it provides valuable insights into possible challenges during implementation. Also, because project details may be clear to those on the team, don’t assume that same level of understanding across the organization.
Have the executive leader communicate project details and milestones to the organization. Messaging from the chief financial officer, for example, can have a major impact on how the project is perceived, how employees should manage their priorities, and demonstrate support from the top about what’s occurring.
Change management should be embedded on day one. Investing in a resource who is experienced in change management and who is focused on organizational change and communicating what the transformation means to individuals and why it matters to them is recommended.
With a finance transformation, engaging with outside business units that are critical to the transformation project is essential to ensure the project reaches its goals and avoids setbacks. This could include working closely with your legal teams to identify and resolve potential issues as well as your operations group to determine supply chain implications. Conversations should focus on the project direction, what that direction means to the business units, and any implementation challenges that could arise.
Insight #3: Transformative data discussions lead to business benefits and metrics.
A finance transformation opens the door to a variety of data insights. What KPIs is the business tracking? How often are they being tracked? What are the opportunities for efficiencies?
Data discussions often lead to more questions and analysis — and ultimately, improved workflows and simplification.
Encourage conversations between members of your company’s finance team(s) early in the transformation journey. Developing an internal communications plan can accelerate discussions and open dialog that ultimately identifies efficiency opportunities.
KPIs may evolve as the team transitions from the data technology build stage to deployment. During Cargill’s transformation, for example, KPIs tracked against the process build, processes involved, and number of reports. Tracking of automated data also occurred, along with accompanying scorecard reviews.
When Cargill’s project went live, daily tracking of data accuracy within 24 and 28 hours were measured, as was a measure against the percentage of Cargill’s revenue . There are several metrics the finance organization should help establish. It’s not an isolated effort, but rather a team-based approach to track how you’re progressing against the original business case.
Transformative data discussions are more about the original business case than the technology itself — the vision of what you want to achieve and the potential impact on other areas of finance and the business. It is critical to have the right partners and the right approach during a change management transformation. The people who have gone on the journey know that change is bigger than you think.
Insight #4: Don’t try to eat the whole elephant in one bite — stay within scope.
What are you trying to achieve? What are you not trying to achieve? If the answers to these questions change over the course of the implementation, which of them are non-negotiable?
“Scope creep” — a common phrase in project management referring to continuous or uncontrolled growth in a project’s scope — can occur on any size project, and when it does, the project can be derailed and its success impacted. For an initiative as large as a finance transformation with several business units involved, remaining within scope can be challenging.
The transformation team should clearly define what it wants to achieve. Equally important is deciding before a project begins what is not in scope. However, as a project begins and other stakeholders are brought in for their insights, a project can morph into other areas the team never intended to solve. This doesn’t mean that changes to the implementation plan can’t occur. Consider a famous quote from American novelist F. Scott Fitzgerald, who said that “the test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function.”
As the project moves forward, the business may change along with how it operates, requiring the team to adapt with the implementation. Remaining within scope and identifying what is non-negotiable upfront is critical — but remaining open minded to different interpretations and adaptable to unexpected situations is an important balance to maintain.
For example, you may realize that management reporting means many things to different people. This is especially true as the team interacts with other business units outside of finance.
The project can take a life of its own. Defining the focus of the project upfront and engaging with stakeholder management throughout the process ensures that any pivots or decision making has their buy-in and support.
Remain true to the focus of the project and what you want to achieve. Pivoting may be necessary, but the core purpose of the project remains unchanged.
Insight #5: Equip people with the proper training and skills to make the transformation transition.
When it’s time to begin testing and training on a new system, what skill sets already exist across the employee base, and which need to be added?
Communicating to employees about the finance transformation is critical. However, if they lack the training or resources to adapt to the change then the project fails. Consider that the challenge of adapting to SAP S/4HANA may differ across the employee base. Developing tailored training for users ranging from absolute beginners to advanced SAP users within the company can help with adoption.
Establishing learning journeys for individuals based on their role or skill set can help foster a training roadmap. Having those conversations with employees and determining their skill levels can help enable training consistency across the company.
Never assume employee skill sets. And don’t underestimate the value of training to level-up skills and help employees succeed in the new business environment.
Insight #6: Technology provides clean and consolidated finance data.
Like a puzzle, technology connects data together to show the full picture. How can finance gain data efficiencies through technology? What are the possibilities for data cleanliness?
Where the human element keeps the finance transformation moving forward to deployment, the technology pulls it all together. For both Cargill and Excelitas Technologies, it was SAP S/4HAHA and other technologies that enabled the target vision of their transformation.
In a large enterprise, there may be multiple ERP systems from years of acquisitions. A mix of systems and varied in-house skill levels creates a challenging financial reporting and legal compliance environment.
However, it’s in those times that a shift in mind-set can be a catalyst for change. Partnering with IT to untangle the data streams is essential to unlocking financial insight and business value. Those insights can culminate through efforts to map master data, implement central processing, and achieve data accuracy.
Master data mapping. With hundreds of potential data points across the enterprise, master data mapping can be a complex endeavor. A finance transformation is the ideal opportunity to follow those data points, gaining a clearer understanding of a company’s accounts. Why was data placed in certain accounts? Who has account oversight? How was the mapping put in place? Tracing those connections provides greater awareness and knowledge around finance tasks. It also drives strategic insight into how those tasks impact the overall financials of the organization and help accelerate the business.
Central processing. SAP S/4HANA for central finance can be a gamechanger for an enterprise by enabling central processing of accounts payable (AP), accounts receivable (AR), and general ledger activities.
For an international enterprise, central processing brings transparency to all the separate accounts globally and aligns them under a single chart of accounts. For example, Excelitas Technologies’ German locations operate under complex tax laws. Now, all legal entities in Germany are integrated into SAP S/4HANA for central finance.
When enterprises harmonize processes, it yields valuable conversations around standardization and control structures. Both AP and AR efficiencies can be realized as well as necessary controls to ensure vendors are under true governance. In the case of Excelitas Technologies, master data mapping and central processing repositioned the finance team from being the historical record keeper to becoming an architect for business value. The finance team now leverages data for analysis and reports back to the business.
Accurate reporting. Even after going live, the journey is never really done. There are ongoing assessments and adjustments to systems and processes. That doesn’t mean you don’t celebrate the big wins, however. At Cargill, for example, the data work across its five ERP systems resulted in 99.8% data accuracy on any given second, with some ERPs reporting 100% data accuracy. That level of data accuracy can help any finance team leverage its financial reporting, as well as month-end activities and balance sheet reconciliation support.
As reporting capabilities come online, the benefits of a transformation become tangible. While companies are on a never-ending journey, what they can achieve is a solid and important foundation for future capabilities.
Excelitas Technologies Corp.
- A global leader in delivering high-performance, market-driven photonic innovations to meet the lighting, optronic, detection and optical technology needs of customers worldwide.
- Headquartered: Waltham, MA
- Nearly 6,700 employees across North America, Europe, and Asia
Key Takeaways for SAPinsiders
- Know the questions you’re trying to solve.
- Create interpersonal relationships with employees impacted by the transformation to understand the implications from their perspective.
- Don’t try to eat the whole elephant in one bite.
- Supplies food, agricultural, financial, and industrial products to customers across the world.
- Headquartered: Wayzata, MN
- Global presence with 155,000 employees across 70 countries
Key Takeaways for SAPinsiders
- You can pivot while on the transformation journey but remain on target to achieve that ultimate vision.
- At the end of the day, it’s all about the data — you can’t do anything without data.
- Have your line in the sand of where to start from, what you want to achieve, and how you want to get there through technology and process enablement.