Today, the Chief Financial Officer has the most important strategic position in the company, directly after the CEO. As a rule, this unites several departments, and the turbulent day-to-day business is repeatedly dominated by three core issues within complex process chains: transparency, speed and compliance. These three terms can be used as categories for many of the top needs in finance and controlling. There is hardly a topic that cannot be classified here. On the one hand, this is good news because it suggests that targeted measures in these areas generate the most incredible added value. Since these areas have extensive entrepreneurial dependencies, missing or non-penetrating concepts can quickly lead to a competitive disadvantage.
Transparency is the crucial factor for making the right business decisions. Only those with a clear view can steer with foresight and react ad hoc to changed circumstances. In a world that is becoming more and more digital with global networks and decentralised structures, clarity has become a challenge today that must be implemented in IT but controlled by top management. Clear concepts and structures are the guidelines that are then implemented technologically. And that across continents, but adapted to local conditions.
The foundation for having agility makes the difference in the decisive moments. The right decision can only be made if the correct information is available at the right time. For the CFO and his staff, “fast” naturally means real-time these days. Combining and comparing relationships across the entire supply chain in real-time is not just a nice gimmick but a critical competitive advantage.
From local tax law to global accounting, the regulatory challenges continue to increase. A risk-averse approach is certainly advisable based on rational considerations; in addition, a high level of compliance penetration of the strategy and implementation also reduces the burden on one’s resources.
Which levers is the CFO turning now?
As a holistic concept with all three core goals of transparency, speed and compliance in mind. “Our experience shows that successful renovations in the finance structure always have to be built based on the entrepreneurial goals and top management input,” says Sebastian Hellmann, Consulting Director at cbs Corporate Business Solutions. With the support of the departments, a holistic approach generates a best-practice control concept and target image. These are compared both with the current situation and with the technical possibilities. The underlying technology, often SAP, does not only act to a limited extent here but mostly also “enablers” – new hardware and software possibilities are not exhausted in many cases.”We know from our large number of global FiCo projects that CFOs are ideally positioned with a uniform and globally standardised financial and reporting platform – from strategy to concept to implementation. The end-to-end technical coverage of the information minimises possible errors, accelerates reporting and maximises compliance. Harmonised processes and coordinated structures across a wide range of business units ensure maximum transparency and efficiency,” says Maximilian Thür, Manager at cbs Corporate Business Solutions.
The resulting standardisation and automation reduce the operational effort significantly, and the resources are freed up to make it possible to invest in value-adding work and generate meaningful insights. This creates the basis for further innovations that, among other things, enable the CFO to make forward-looking entrepreneurial decisions at short notice. The way to a uniform and globally standardised financial and reporting platform is certainly not an easy one, but certainly, no other way promises such a successful and sustainable restructuring in finance and controlling.
cbs ONE Finance
With ONE Finance, cbs delivers a comprehensive and integrated corporate and transformation solution. This consists of a global best practice concept for control and mapping in a large company operating on SAP systems. The introduction takes place at top speed and with a minimally invasive end to end transformation approach.
To better assist CFOs in accelerating digital transformation, cbs Corporate Business Solutions has created a product named ONE Finance, which includes:
- ONE Corporation: Designing end-to-end, digital business processes
- Landscape Transformation: Achieving lean, consolidated systems and data
- Globalisation: Successfully completing sustainable, efficient worldwide rollouts
Instead of working with a myriad of partners involved in defining the target picture, business and IT implementation and data migration, cbs ONE Finance provides a direct way to the global standardised solution.
The success factor is the holistic view of the target picture’s customer-specific design with all services out of one hand, market-leading transformation skills, and smooth and successful implementation.
To ensure future-oriented steering, consistent and real-time reporting, and process efficiency involve more than merely adopting new technologies, upgrading current systems or investing in some fancy gadgets. The key to success is through globally uniform structures and procedures.
These efforts will need to be accelerated if not completed in preparation for the post-digital era. There are three main stages to achieve standardisation:
Companies need to define a digital transformation strategy and identify business priorities. Think about the outcome you want to achieve, whether you need innovation to keep/gain new customers, stay competitive or reduce the cost base to deliver higher margins.
As digital transformation is a significant endeavour involving many parts of a business, it is crucial to align with all key players.
Next will be the technical part of creating global standardised solutions. Technology will have to be adapted to achieve target business outcomes that align with your digital transformation strategy.
Multi-national companies will also need to consider country specifics to ensure the transformation is successful enterprise-wide. It is also in this stage that the realisation plan is drafted.
The realisation stage will be the execution of transformation towards a harmonised target structure.
There will be a need to transform data, structures and activities with minimal disruption to current business. The realisation will involve agile testing, proper training and usage of high-end transformation software to facilitate data transformation.
The outcome is a globally standardised finance and reporting platform. The newly created structures enable the CEO, CFO and CIO to control the company more actively and precisely. Uniform structures make the company units comparable with each other at all times, harmonised and standardised processes accelerate month-end closing activities, and new technologies further facilitate this. As a result, management decisions can be made based on the company’s latest key figures, and measures can be taken in a targeted manner.
Also, the newly created target image enables a more agile reaction to future changes. In this way, new technologies and functions can be used more efficiently, and structural changes can be implemented more quickly and efficiently. The result is a transparent and efficiently controllable company that can optimally use and implement future innovations.
Customer Success: How Schott is driving the company-wide digitisation strategy with a uniform financial system based on SAP S/4HANA
Dr. Jens Schulte, CFO SCHOTT AG and Oliver Böhm, S / 4HANA Finance project manager SCHOTT AG on the change of the international glass technology specialist from the previous SAP environment to the new, digital S/4HANA world. This lays the foundations for the next generation of the already existing ONE Finance organisation. The processes are digitised and system-supported, forward-looking analyses are becoming a routine tool – worldwide in all countries and societies.
From a management perspective, logistical and financial questions always arise: At which location can a product be produced most cheaply? Where do I have the shortest transport routes? Does the initial cost and price calculation fit? This is precisely the question asked at SCHOTT AG. With a history of more than 135 years, the company is considered to be the inventor of special glass. Today the technology group is a partner for many industries with a global turnover of 2.2 billion euros and 16,200 employees.
The challenge in implementing ONE Finance
Change management is the focus of these projects. In the case of SCHOTT, there are around 80 companies that have to be converted on a go-live (“Big Bang”) and 270 finance employees in the group who need to be picked up for change management. In addition, the stakeholders in the group use the processes or sub-processes or draw information from the business processes. “We are entering new territory with many aspects, particularly the new profitability analysis, margin analysis, and the parallel assessment using the material ledger, including data migration. As far as we know, no one has done it in this way before,” says Oliver Böhm.
Improvement of company-wide control
The existing ONE Finance from SCHOTT has uniform standards, processes, databases and a uniform organisational structure based on the current SAP ECC system. The company-wide control arises both on the controlling and on the accounting side. This is now to be further developed with the help of S/4HANA. This enables SCHOTT to achieve comprehensive reporting based on optimised data structures quickly. That means a global controlling area, a fiscal year variant and a detailed description of the functional areas. In addition, Dr. Jens Schulte: “In summary, ONE Finance offers us the opportunity to make our system more granular, more concise, more flexible and faster to be able to react much better to market situations.”
The development plan as the linchpin of the digitisation strategy
In principle, S/4HANA defines a whole series of guard rails as a development plan that will shape the integrated system of the entire company over 20 or more years. “We expect a whole range of advantages that will take us further, regardless of whether they are faster or better decisions in day-to-day business. S/4HANA is a major investment that our group makes as part of system development. There are many resources associated with this. We wanted to get as much out of our business as possible,” said Dr. Jens Schulte. For this reason, switching to S/4HANA as a technological upgrade (brownfield) would not have been enough for SCHOTT.
What are the advantages of ONE Finance based on SAP S/4HANA
With S/4HANA, SCHOTT now forms the basis for faster closings, such as monthly and annual closings. In addition, an optimised and individual reporting system. Added to this is the speed in the operational area, such as Realtime Processing. In addition, Dr. Jens Schulte: “Think about sales, where, for example, the real-time credit limit assessment enables a quicker response to customer requests, or where faster quotation calculation through an immediate reaction of the local sales team brings a clear competitive advantage. If we move on to the management view now, real-time data processing will surely fulfil the dream of every CFO to generate the complete group image up to the balance sheet at any time at the push of a button. This overall picture is our target picture, which we want to achieve.”
Interim balance and target image for 2025?
SCHOTT started 1.5 years ago with a proof of concept. “We fine-tuned our setup, both technologically and in terms of project organisation. As part of a preliminary project with our consulting partner, we were able to put this setup to the test to then work together efficiently and in partnership,” says Oliver Böhm.
This digitisation project will result in consistently agile corporate management for SCHOTT AG so that you can quickly shift the focus even in times of crisis, e.g. from growth-oriented evaluations to strict cash and cost management. Then the reporting frequency must be increased significantly, and the company’s key KPIs tracked weekly to enter into a dialogue with the business areas promptly.
“We now want to further increase digitisation by 2025, and this applies to both the financial sector and the entire company. The finance department was one of the first to deal with new digitalisation possibilities, e.g. with analyst tools to create monthly sales forecasts from daily ramp-ups. We want to be the role model for the rest of the group. We have well-prepared processes, and we have people with an affinity for IT and processes who are very interested in working with digitisation topics,” adds Dr. Jens Schulte in conclusion.