How digital transformation works in the Office of Finance
Digital change presents enormous opportunities for the Office of Finance, as well as great challenges. But what exactly does it mean to digitalize the work of the finance department? What must be taken into account? What mistakes should be avoided and what opportunities should be taken? As part of a panel event, we spoke to experts who should have the answers, since they all have experience of digital transformation in the Office of Finance in various roles. Amongst those who talked to our moderator Katharina Heymann, Channel Development Manager at LucaNet, were: Shan Liu, Senior Manager Group Controlling at TOPWERK GROUP, Michael Schneider, Partner in the Management Consulting department of Ebner Stolz, Torsten Janßen, Partner in the department of Audit and Corporate Finance at Ebner Stolz, and Marc Kaminski, CFO of OBJECT CARPET. The exciting panel event, organized by our partner Ebner Stolz, was entitled: Digital transformation delivered - LucaNet as a success factor in digitalizing the Office of Finance. The panel focused on the following questions:
- Why is digital transformation necessary in the Office of Finance?
- What problems does digital transformation solve?
- What must be considered during the implementation process?
- How can LucaNet help with this?
Table of contents
Challenges in the Office of Finance
Katharina Heymann: Marc, what are the current challenges facing you as CFO and your finance department?
Marc Kaminski: The increasing speed of innovation and information makes it harder to identify key factors for profitability and to automate repetitive work. BI and standardized workflows no longer represent competitive advantages per se, but are still basic requirements for successful companies. “Best practice” was yesterday - “best thinking” is what’s in demand now and in the future.
Katharina Heymann: Torsten, as a financial advisor and auditor, what do you think are the biggest challenges in a finance department?
Torsten Janssen: Speed is definitely a big issue. For example, annual reports have to be drafted and submitted faster and faster. There are also a lot of legal requirements which have to be met. Overall, I've noticed an ever-increasing demand for professional digital solutions.
Example of digital transformation
Katharina Heymann: Shan, you introduced LucaNet at TOPWERK. How is the software being used now?
Shan Liu: We introduced LucaNet on a large scale. Since then, we’ve seen significant increases in efficiency, particularly when it comes to annual financial statements, reporting, and planning. Intercompany coordination has improved significantly, and data collection has been streamlined worldwide, thanks to various LucaNet interfaces. The flexibility of different reporting structures also provides great added value. With LucaNet, we can easily map complex reporting structures, which everyone can carry out, even without being an IT expert.
Katharina Heymann: Marc, can you tell us something about the One Finance project, which helped you digitalize and restructure the way things work in the finance department?
Marc Kaminski: Our main focus was on “insourcing” various tasks, and streamlining processes and business areas, which had previously been separate. We dealt intensively with reporting structures, planning processes, account designs to simplify management analysis, and optimized preparation of annual financial statements. Otherwise, bad manual processes risk simply being converted into bad digital processes.
Katharina Heymann: Wow, those are big changes. How was LucaNet able to support you?
Marc Kaminski: The introduction of LucaNet was a key building block, especially when it came to automating the preparation of financial statements, consolidation, and (scenario) planning. Together with Power BI, we can now simulate influencing variables and KPIs, as well as target group-oriented preparation. The increased level of automation lets us focus on critical drivers and their analysis, instead of wasting hours on preparation.
Michael Schneider: I think One Finance is a great project. On the one hand, you can see how a solution like LucaNet brings good and fast results. On the other hand, it shows how important it is to have a good conceptual framework behind a project of this magnitude, and that it fits with the goals and strategy of the company.
Change management: Vital for digital change
Katharina Heymann: Shan, how did TOPWERK go about becoming more digital?
Shan Liu: We’ve gone through a similar process. It’s important to have defined goals, defined milestones, the distribution of the individual work packages. Good change management was also just as important. As a result, we took the employees in our finance department with us. We were able to respond to concerns and show them the many positive sides of a digitalization project - such as the implementation of LucaNet - right from the start. That played a big part in the success of the whole project. And then you should always keep in mind that it’s better to proceed step by step. For example, we started with a core group and then gradually expanded our system to include more users in the company. Also, once the group finances were standardized each month, we reflected on "lessons learned" from the processes. It’s also important to give feedback to the auditors if there are different assignments in the process compared to the past.
Katharina Heymann: Torsten, what is the view of auditors, investors, and consultants on LucaNet?
Torsten Janssen: What we want is automatic, reliable, and transparent data, especially in the group reports. That's what LucaNet represents. Another great strength of the software is the ability to connect to different merchandise management systems. This is particularly helpful for medium-sized companies. Many have a completely fragmented IT set-up, and LucaNet makes it possible to connect and integrate different ERP systems. Another application which is important to us are the functions related to IPOs. As auditors, we have special obligations - we need 100% reliability. And with the SmartNotes and Group Report modules, LucaNet is really very well positioned.
Katharina Heymann: Torsten, an important point for you is the traceability of the data. How does LucaNet provide support in this area?
Torsten Janssen: Although LucaNet does not take care of the entire documentation, it is still a great support, for example through the integrated documentation process. Relevant documents can be uploaded - screenshots, corporate accounts - you can add anything in the entries. This makes it easier for us to keep track of the audit trails. And it ensures that neither we nor the customers waste any time. At the group level, we can see that LucaNet is a great help with group accounting and risk management. It's all about improving the quality of data.
Digital transformation in practice: Key learnings
Katharina Heymann: Shan, what do you think are the key learnings from your digitalization project?
Shan Liu: Firstly, you have to define your goals really precisely - then you've already done half the work. I also recommend taking a staged project approach. For example, first import the historical data, then set up the consolidation process, and then implement a module like Group Report. It’s also important to create a corporate culture which sees itself as a learning organization. And this is where further training plays a particularly important role. This means there must be sufficient training opportunities for teams within the company so they can best meet the requirements of digitalization.
Katharina Heymann: And what about you, Marc?
Marc Kaminski: You have to understand that there will be setbacks, mistakes will happen, some persuasion is required, and actual success is not always immediately visible. And the focus is on people, especially in digitalization. Transformation always means disruption, and that can be scary. This is precisely why we’ve formulated a concept for the transformation and worked out the advantages of the new digital possibilities together. Everyone should be on board and have confidence in our project. Only then can we really make use of the new tools and increase the returns.
Katharina Heymann: Michael, what insights do you have from the digitalization projects you’ve been involved in?
Michael Schneider: As Shan and Marc said: in the end it's always about people. What we do as consultants is get people excited about these kinds of processes and show them how our projects or a tool like LucaNet can help them in their everyday lives. And secondly, having an agile project approach plays a central role. A gradual rollout is also very important, so everyone stays on board. You also need a good concept which shapes all the relevant processes and satisfies the strategic requirements. Even the best tool cannot compensate for bad processes. Stable and standardized processes are very important for digital tools and vice versa. We see ourselves as coaches or sparring partners for our clients. We exchange ideas about successful approaches and we try to really inspire and engage people.
Even more insights into digital transformation
Would you like to watch the entire panel event and get even more exciting practical insights? We recorded the discussion and are happy to make it available to you.
What are the benefits of digital transformation in the Office of Finance and how does it pay off in terms of customer satisfaction? Our interview offers answers to this question. Read it now!