One of the biggest draws to the SAP Sapphire conference is the range of real-life transformation stories that SAP customers and partners share. It’s always exciting to discover new ways to elevate business performance, improve functional processes, and build a level of growth that benefits everyone.
The panel discussion, “Optimize Your Top Line and Bottom Line with Finance Innovations,” was one of those sessions. SAP North America’s Chief Operating Officer Thack Brown interviewed finance leaders from Excelitas Technologies Corp., Mohawk Industries Inc., and Pfizer Inc. to explore how they tackled critical challenges within their finance organization to pursue healthy and lasting business growth.
Centralized finance boosts visibility and speeds closing
For finance leaders, steering the business is about top-line optimization. All areas of their organization must be ready to support growth in new business units, markets, and product areas. And when done well, the finance team adds more value to the bottom line with efficiencies, cost reduction, and improved quality and controls.
Excelitas Technologies decided to centralize its finance function to gain enterprise financial visibility and flexibility to continue growing and bringing on new businesses. By deploying the SAP S/4HANA solution for central finance, the company provided a standardized, unified single chart of accounts and a template for all entities to increase visibility into enterprise-wide financials.
Robert Ersoni, vice president of global business services for Excelitas Technologies, recounted: “Our finance team needed to become an active business partner to effectively support Excelitas’s aggressive growth strategy by integrating new acquisitions more quickly. However, integrating disparate SAP and third-party finance systems demanded automated data reconciliation across business units, geographies, and systems.”
To extract data from various sources and harmonize master data, the company integrated the SAP Central Finance Transaction Replication application by Magnitude with SAP S/4HANA for central finance. The application’s purpose-built APIs and templates accelerate the unification of third-party ERPs and future acquired business. Excelitas Technologies’ group reporting uses the same data structure to consolidate information without moving data out of the business system.
With an enterprise-wide view of its financials, Excelitas Technologies improved controls, achieved real-time reporting, and advanced analytics. Best of all, it has transformed the accounting function from a transactional bookkeeper into a collaborative, decision-making partner. Furthermore, solution extensions by BlackLine support a faster financial close cycle that includes calendar, task management, and journal entries.
“Standardized processes are now automated with prebuilt robotic process automation service. A single chart of accounts and unified reporting means without data replication yields a much faster financial close with group reporting directly in the core ERP,” stated Ersoni. “Even the enforcement, auditing, and review of global accounting policies are more efficient due to standardized processes, reducing risk, and strengthening compliance.”
Additionally, business users have real-time insight into how each line of business performs against our strategy. As a result, they can model and understand how decisions impact business financials faster than ever, so they act more strategically and proactively.
A unified view leads to more strategic, bolder moves
Data harmonization is another must-have for better decision-making. Increased data visibility, reliability, and consistency of financial, business, and market drivers deepen understanding of market conditions and economic factors. This advantage makes planning more precise and responses more strategic across products, channels, and regions.
Inspired by this line of thinking, Mohawk Industries – Flooring NA division (FLNA division), extended the breadth and depth of its analysis of its internal data footprint to streamline forecasts with core ERP operations. Within Mohawk Industries’ digital landscape was a mix of SAP and third-party ERPs scattered across the globe. While Mohawk Industries is on a path toward deploying SAP S/4HANA in major divisions, the FLNA division based in Georgia, still struggled with tightly integrating its financial forecasting system with its core ERP and business operations.
According to Chintan Sandesara, global senior director of financial systems at Mohawk Industries, a single source of truth is needed to improve what-if analysis and data-driven decision-making. “We needed to implement a cross-functional collaborative approach to visualizing each business unit based on consistent data and KPIs. With a harmonized planning system, we gained an integrated view of information across all business units.”
The company started its digital transformation journey with the SAP Analytics Cloud solution. By having a detailed view of the business, the entire financial planning and analytics team could focus less on mining data and more on the strategic aspects of planning with improved forecast predictions and accuracy. In return, the FLNA division is more agile in responding to market conditions.
“With a modern foundation for extended planning and analysis and cross-functional collaboration, we modernized our systems and helped ensure a smooth integration between our operations and financials,” said Sandesara. “We were able to rationalize our cost centers for planning and locate gaps in process and drivers. In addition, we aligned our cost tracking methods to impact profitability and make more accurate and strategic operational decisions faster across business units, products, and channels.”
Automated close cycles drive cost out of finance
The efficiency of financial closing is usually considered a bottom-line discussion about cost reduction. However, when the process becomes automated, the topic quickly evolves into a digital vision for becoming an intelligent enterprise.
Take, for example, Pfizer. In the second half of 2021, the multinational pharmaceutical and biotechnology corporation piloted the “SAP S/4HANA cloud solution for Advanced Financial Closing (AFC)” and went live with a subset companies in North America. And by the first half of 2022, the deployment was extended globally to all subsidiaries across Africa, Asia Pacific, Europe, Latin America, and the Middle East.
“The speed at which we implemented SAP AFC is telling of how much we believed in the direction of our digital strategy,” acknowledged Rajesh Hase, senior director, digital finance solutions at Pfizer. “The solution enables us to expedite the global close process by enhancing planning, execution, monitoring, and analysis of period-end tasks.”
Real-time monitoring and analytics are key since the project’s scope includes approximately 450 companies with 100% of revenue is on a single instance of SAP. Currently, all the company’s record-to-report closing tasks on SAP globally use the SAP AFC solution.
“A key element of our success was a remarkably close and trusted partnership with our business stakeholders and implementation partner. We also have excellent support, thanks to the customer care experts from SAP, especially since we are an early adopter,” added Hase.
A benefit of using the cloud solution is access to upgrades and new capabilities at regular intervals – eliminating the need to plan and invest in a major upgrade every few years. Looking forward, Pfizer plans to extend automation across the business and take advantage of enhancements aligned with the road map from SAP.
Hase concluded, “Now that we have our global closing information standardized and simplified on a single instance, our next step is to benchmark the current process, gain further insights, and identify additional opportunities for improvement.”
Great conversations inspire finance innovations
First and foremost, I would like to thank Robert Ersoni, Chintan Sandesara, and Rajesh Hase for joining us at SAP Sapphire and sharing their finance transformation experience. It’s always exciting to discover new and unique strategies that allow finance organizations to help their businesses run better, stronger, and more profitably.
And SAP is extremely fortunate to have many more customers share their real-life stories as well. I invite you to explore them here.
More on SAP Sapphire here.