Client Challenge:

When more is not better: A proliferation of systems and processes leads to management blind spots, inefficiency and the high cost of Finance

Our client, a well-known multinational conglomerate operating in multiple industries across multiple regions, had grown over time through an aggressive acquisition strategy (PwC had worked with them on many of these transactions). Their acquisitions operated with a high degree of autonomy, and this had been a good thing -- until it wasn’t. Our client found themselves in a situation where they were dealing with hundreds of separate ERP instances, finance organizations that were not integrated from prior deals, no standard processes, no standard data strategy and various processes being performed in high cost locations. This all led to a very high cost of Finance relative to their peers. Our client realized that they needed a company-wide finance transformation to address their structural problems and enable them to continue their acquisition strategy with accelerated synergy and time to value. They called PwC.

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Approach:

Simplification and digitization led by a global team

Our client understood that undergoing a total company finance transformation would not be easy and would take time. Their business is about as complex as it gets. Working with the client, we began by focusing on a data strategy and the necessary changes involving people and organizational structure needed to support that strategy. This enabled us to recommend changes to the client’s global operating model to improve effectiveness and lower costs. Over time, we also began to help the client address close process simplification, targeted process improvement, shared services, HFM, Planning RPA, FX accounting, Treasury, SAP and Oracle Cloud. With a cross-functional global team of specialists in finance, strategy, accounting, people & organization, operations, IT, tax and risk assurance, we began working in parallel on multiple aspects of the transformation. Our overriding objective was to leverage digital technologies to simplify the finance function and enable it to operate with greater efficiency and effectiveness.

While each focus area was important for a successful finance transformation, a real strategic trigger for the client was establishing a standard chart of accounts. This meant that for the first time, the various business units and Corporate were using the same language from transaction through consolidation. For a business operating in multiple industries, this was no small feat, and it made possible a global shared services model and streamlined intercompany processes. We worked with the client to develop a target global operating model to identify which processes would be retained in the business units and which would be phased into the shared services centers.

We also worked with the client across 16 Finance teams globally to align its close calendar to the last calendar day reporting convention and simplify the close process through a combination of technology, automation (RPA) and improvements in transparency, control and accountability. In parallel, we assisted the client with adoption of the ASC 606 revenue recognition standard (the largest accounting standard change in the last decade) and established a standardized ERP environment to improve FX reporting consistency. And in a first for the client, PwC helped design and implement a cloud-based Oracle shared services ERP hub, quickly migrating three businesses and four countries off of aging legacy platforms in nine months.

Impact:

Massive transformation drives massive leverage

This massive transformation has been moving full steam ahead for more than five years and PwC’s involvement with the client’s complex M&A activities continues. We do over 500 projects with the client annually. While the finance transformation is still a work in progress, it has already produced tangible results:

• Overall Finance spend reduced by 30%
• Back office functions from the business units have been consolidated into four global shared services hubs
• The client now has a formal, fully documented and implemented global accounting policy and procedures
• The number of ERP instances in use throughout the company has been reduced from almost 500 to 37
• Close cycle times have been reduced by 25%
• Over 86% of the client’s banking systems consolidated and 54% of all payments digitized
• The Oracle cloud-based shared services ERP hub has reduced purchase order timing by 75%, mitigated the financial risk of transactions and increased the accuracy and timeliness of revenue recognition. This project serves as a rapid deployment model for the client’s future acquisitions
• Implemented 100+ bots and a strategic global data lake

Our work together has resulted in innovations in the areas of blockchain, Oracle Cloud transformation and robotics, providing the basis for accelerated solutions we’ve gone on to use in subsequent large-scale finance transformations with other clients. And importantly, for a company that thrives on M&A, our finance transformation work has enabled greater ease of integration for new entities as well as more immediate synergy and accelerated time to value.

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