Transforming a Finance Department
Key Lessons Learned From ABB’s Transformation Program
Efficient and transparent financial processes, with reliable reporting structures, are crucial for informed decision-making. Informed decision-making means that management is able to take decisions based on accurate and complete data – that should be readily available – best case even on a real-time basis.
This sounds almost like an utopia – especially the bigger the company the more complex a real-time reporting system is. And even if reporting is real-time, the “language” that the different reporting units talk must be the same (think of account standards; management reporting structure; ERP structure; master data structure etc.).
That is why I am excited to share some personal experiences of the Finance Transformation Program I led for the Benelux organization of a company that does over 32 billion USD revenue in 2023 worldwide – and that is able to do exactly that: have top-notch financial processes and a reporting structure that enables informed decision making based on real-time information. On a global scale!
Utopia in practice!
ABB’s Finance Transformation Program
The company: ABB. ABB is a global leader in Electrification, Motion, Process Automation and Robotics & Discrete Automation. That pushes the boundaries of technology, driving innovation and value for their customers every day.
In a 2024 interview (available at Deloitte.com) between Deloitte and Group CFO of ABB Timo Ihamuotila ("CFO of the Year" in the category Swiss Market Index Expanded®) – Timo mentions that one of the key priorities of ABB is a successful roll-out of the ABB Finance Transformation Program. The purpose of this program is to harmonize and where necessary redefine all mandatory financial data in the company.
It was an amazing opportunity to have been asked to manage the program for the Benelux Organization by ABB Benelux’ CHO Ties Verbruggen – which ultimately led to the successful launch the program in the Benelux of in July 2023. The Benelux was part of the first wave of countries and in many ways pioneered their way through the program.
The Challenge of (SAP) Finance Transformations
Undertaking a large-scale SAP finance transformation is a complex endeavor for any organization. It's not just about installing new software; it necessitates a complete overhaul of existing financial processes, data structures, and often a cultural shift within the finance department.
This can be a significant additional workload, demanding considerable time, effort, and resource allocation – at least in the short to medium term. Whilst the benefits come somewhat with a delay to the wider organization.
Although the above challenges of such transformation might sound obvious – there is one somewhat less foreseeable challenge that I noticed over the course of the program that should be top of mind when running such a program: people.
Because it is true that in the end every business, is a “people business”. I have a Big4 background, so this might be easy for me to say – but I truly believe that no matter how automated your organization is, at each key cornerstone of a process there are people involved.
And especially if you want to change, and move from A to B with your organization – you can only get it done if you work together towards the same goal. You cannot do it alone or without the buy-in of the wider organization.
It’s cliché, but very true.
Balancing Transformation with Core Activities
While a Transformation project can temporarily distract from core finance activities, the long-term benefits of a modernized finance function are undeniable. Increased efficiency, real-time data visibility, and improved decision-making capabilities all contribute to a more agile and competitive organization.
However, navigating the complexities of a SAP finance transformation requires a strategic approach that balances the need for change with the need to maintain ongoing financial operations.
One of my main tasks was to ‘safeguard’ and act as a gatekeeper where needed the local operations and activities – whilst still getting the transformation job done.
5 Key lessons That I Want To Share With You
Even though it is hard to capture a 1.5 year program where I had the opportunity to bring along a multi-disciplinary team that easily exceeded over 40 colleagues and various external consultants, in 5 key learnings. I will try. If you are running a finance transformation program or if one is coming up – I hope the following lessons will help you:
Solid Project Team & Sponsorship: Setting up a solid Project Team is by far the most important first step for a successful project deployment. Ensure you have a good representation of all relevant functions (Finance, IT, Tax, Treasury, HR etc.) and build a team. And by team I do not mean just a collection of people, but really a team. Talk about the projects goals, vision, strategy, targets, roles & responsibilities and ensure that there is sufficient senior sponsorship.
Change Management: The “emotional cycle of change” is a concept that most of us probably know (if not I recommend looking it up, you will recognize it!) – but also most of us probably underestimate the importance of. As I said earlier, to successfully change the way you operate – you need to bring the people of the organization along. So do not only focus on what processes change etc.; but also focus on what changes for our colleagues! Bring them along, but especially listen to their voices and take action where needed timely.
Talent Development & Upskilling: Transformational programs are an amazing opportunity for your Team to develop themselves. The war for talent is a real one, and attracting people to your organization is one thing – but keeping them is a whole other thing. Giving colleagues the opportunity to learn, grow, take responsibility and get a successful outcome within the project setting is an amazing feat. It will help you identify your leaders of tomorrow!
Determine your ‘gatekeeper’ criteria: A project can be chaotic, timelines pressuring, and project stakeholders will be breathing down your neck at some point. What is most important then, is keeping your calm and knowing where you stand and what your key attention points are. I recommend everybody to write down all critical success factors of the program, where you focus on business operations and key-processes continuity. Then when the pressure is on, focus on these points first, because if these are not “there” yet – you need more time. Simple as that. Such messages will in the heat of the moment not always be appreciated, but in the longer run they absolutely will! Get this list sorted, get these topics resolved and in a good shape – and then you always know how to act when the heat is on.
Green lights? Go! If you have met all your ‘gatekeeper’ criteria, and all signals are on green – you should not be scared to “Go”. Cutting over old to new processes and switching on a new system might be scary at first, and yes some things will go wrong initially, but fact of the matter is that you will never reach a state where 100% will be perfect directly. Take into account all above lessons and make sure your team is ready to handle whatever comes at them – and I am sure you will ultimately be successful! Good luck!
Final Thoughts
It was a great and rewarding experience to have led the Finance Transformation Program for the ABB Benelux Organization – and I realize now more than over the course of the program itself what a great team I have worked with. In the end you have to work together to get the job done, and my role of keeping everything and everybody on the same path towards project completion was a great experience.
The lessons I learned (and shared with you above) are universal and apply to all big projects.
If you are currently in the midst of a program where you need an extra pair of hands – or about to embark on a similar program, then feel free to reach out!
