A “No Regrets” Approach to Financial Transformation

⇨ Financial transformation is a journey, and sequencing and roadmap are key upfront considerations.

⇨ F&A transformation is a catalyst for broader digital transformation.

⇨ Rapid, tangible wins provide a strong foundation for future use cases.

As businesses look to the future and modernize their practices, digital transformation has become a top priority. Although IT and the business team often take center stage in digital transformation initiatives, finance, and accounting teams and processes can play a critical role in delivering success.

Digital transformation, like a move to SAP S/4HANA, for example, should be approached as a journey. And as with any expedition, it helps to have a guide who has made the trip before, can lead you on your way, and help find the solutions that make the most sense for your business.

Planning Your Journey

Before starting on the financial first steps of a digital transformation journey, your team should understand the challenges it is currently facing and how financial transformation can ease these pain points.

As it stands, the vast majority of accounting departments are bogged down in mundane accounting, compliance, and financial close work. These processes can be a major hindrance to financial and accounting teams working on more strategic initiatives.

SAPinsider spoke with Molly Boyle, head of SAP Solutions and Strategy at BlackLine, about how companies can address capacity and other challenges as they transform their finance and accounting processes.

Boyle noted that even in the most sophisticated ERP landscapes, a lot of accounting work is done outside the ERP.

“Even though the ERP is the system of record and provides many capabilities, there’s a tremendous amount of work that’s done outside—typically on spreadsheets—and often managed and maintained via emails, shared folders, network drives, and meetings,” Boyle said.

This traditional way of working can restrict global visibility and slow down reporting of key financial results. It can also harm talent retention. Amid the Great Resignation and low unemployment, employees who hammer away at repetitive tasks instead of focusing on strategic initiatives may be inclined to look for a new job where they can avoid this kind of work.

The changing business landscape requires companies to adapt the way they operate to keep up with current trends or stay ahead of the curve for future shifts. For instance, 2021 was a record year in terms of mergers and acquisitions, which can cause ERPs and other systems to stack up as enterprises combine.

“It’s not always realistic for companies to implement and maintain a single instance of any ERP for the long term. As business models develop, companies need solutions that provide that agility and flexibility,” Boyle said.

Collaboration

In digital transformation initiatives, a collaboration between IT and F&A teams is critical for success. As the fiscal steward of the organization, the finance and accounting department can help set the foundation for the overall transformation. Getting actuals that add an extra layer of efficiency and accuracy around data early in the transformation process will be “no regrets” work.

“There are critical controls, compliance, and reporting capabilities and considerations that need to be part of the overall project scope. If it missed or not considered that upfront, there are a lot of extra resources, sometimes rework or delays, that happens later in the process when issues are found,” said Boyle.

One example of successful collaboration between F&A and IT teams is identifying and implementing purpose-built solutions that minimize IT effort and extend ERP capabilities. BlackLine’s financial close solutions, for example, uniquely enable efficiency for finance and IT because of the strategic relationship between BlackLine and SAP. BlackLine is one of a few providers selected as an SAP Solution Extension, a strategic third-party solution that complements other SAP software.

With the partnership, BlackLine and SAP maintain the highest level of connectivity and collaborate to align innovation roadmaps. Today, over 1,300 SAP ERP customers use BlackLine solutions to maximize value and efficiency.

Boyle said, “BlackLine provides a user-friendly, cloud-based platform that already has embedded best practices, segregation of duties, controls and dashboards built in.”

Corning’s Transformation

The most successful transformations begin by identifying processes that consume the most time or introduce the most risk and addressing those use cases before branching out to other areas of the business.

Recently, materials science giant Corning began its digital transformation. At the outset, Corning had 29 ERP instances. As it looked to merge and simplify ERP systems, Corning turned to BlackLine to help centralize financial data and processes and to increase efficiency.

Corning’s CSS senior manager Liza Melnychuk and SAP controlling transformation lead senior manager Anthony Crum shared with SAPinsider how BlackLine is helping Corning meet its objectives. Using a Center of Excellence model to centralize the work, Corning looks at BlackLine as an enabling technology and has already made progress in modernizing areas like account reconciliation and journal entries.

Corning brings data into BlackLine from multiple sources, including its SAP ERP. The SAP Connector allows journal entries to be posted from BlackLine directly to SAP with real-time validation and confirmation.

Overall, BlackLine has helped Corning complement its evolving SAP ERP landscape, providing both quick wins and longer-term opportunities from process modernization. BlackLine aligns with the company’s digital mindset goals as it helps standardize, centralize and automate key activities.

“What BlackLine does is provide a centralized purpose-built cloud solution where all of this work can be managed from anywhere, which is huge, particularly in this time of remote and hybrid work where there’s not a reliance on meetings, emails, network drives, or other disconnected systems and processes. So, it provides a space for collaboration,” Boyle explained.

Corning is also taking advantage of the integrated nature of BlackLine’s financial close platform. Because BlackLine’s solutions live in a single cloud, they communicate with each other and provide opportunities to create touchless processes.

Benefits

Moving to SAP S/4HANA is a large undertaking, and teams may be reluctant to take on other projects. However, considering the broader digital transformation journey and goals is also important. Complementary solutions that allow for rapid deployment and quick time to value can create an early momentum that pays dividends later. BlackLine’s solutions are purpose-built to integrate quickly and easily with any ERP, including SAP S/4HANA. Businesses can reap all the benefits of better speed, accuracy, and control for accounting without dependency on other projects.

“At BlackLine,” Boyle said, “finance and accounting transformation is not something we do; it’s all we do. Our software was built by finance and accounting professionals for finance and accounting professionals and provides a best-in-class user experience for executing work in the most efficient and effective way possible.”

BlackLine transforms traditionally repetitive processes like journal entries, account reconciliations, and more. The platform frees up finance and accounting team members to do more strategic work like digital transformation and analysis and boosts job satisfaction to reduce employee turnover.

“Companies are more focused than they ever have been on making sure they can not only recruit and retain top talent but also develop talent and use the talent they have in the best possible way,” Boyle said.

Conclusion

Before embarking on a financial transformation journey, it is critical that companies have a roadmap to adhere to through all the twists and turns of the process. Having solutions like those from BlackLine assures a company or a team that it has a partner and a guide through the journey. That partner has the experience of knowing the way and the ability to incorporate all aspects of the company’s financial landscape.

As Corning’s experience shows, having a partner with a proven track record of working with both users and SAP to get the most out of the finance and accounting team is a critical step.