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Reporting and insights accelerated with a digitized, connected, and faster close

KPMG and Workiva help a global IT company transform its financial processes from good to great

Client

A global IT company

Industry

Telecommunications, media, and technology (TMT)

Primary goal

Digitally transform the record-to-report (R2R) process and reduce time required by five days

Primary platforms

Workiva and SAP S/4HANA

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When an acquisition doubles your revenue in your largest market, there are some big numbers at play—especially when you’re a $48 billion CPG company. And the bigger the numbers, the bigger the impact of every strategic and tactical decision you make. You can’t afford to have your visibility clouded and your decision-making hampered by having two disparate financial operations functions each with its own systems, software, and people. So, when a global CPG company found itself in this situation, it called on KPMG to drive fast, smooth, cost-efficient integration of financial operations.

Key outcomes

1

Increased engagement 

and global alignment between cross-functional teams

2

Greater visibility

 into consolidated spend driving meaningful insights and more proactive decisions

3

Days shaved off

the monthly close cycle

4

More accurate

revenue and sales forecasting

When a leading multinational IT provider of hardware, software and services was about to complete its implementation of SAP S/4HANA, the CEO issued a challenge to the finance department: Find a way to cut five days out of the close and earnings reporting process.  Although the company was already known for the accuracy of its financial reporting, speeding up the process would get quarterly and fiscal year-end numbers to investors more quickly and enhance its reputation as a leader in technology and digital transformation.

Compressing the R2R cycle wouldn’t be easy. The first step would be persuading the talented and dedicated people managing the reporting process to rethink the way they worked. Next would come identifying optimal ways to leverage the value they could realize from existing software platforms including SAP, Workiva, and other R2R specialty providers. KPMG was ready with the savvy and experience to do both.

Key outcomes

Making a measurable difference

Increased credibility

with internal stakeholders and the investment community

Five-day reduction

measured precisely acrosa in close and reporting times markets

Enhanced reputation

Client’s reputation enhanced through faster, technology-driven reporting

Reduced duration

of R2R process by five days

Automated reporting

New, automated reporting process

Greater speed

and insight into factors affecting quarterly numbers

Client transformation journey

Click on each part of the journey to learn more about our client’s transformation.

Client transformation journey

Before

Poor visibility threatened business objectives.

Acquiring a large organic food and beverage business helped a global CPG company expand its operations and nearly double its revenue in the U.S. However, as with most mergers, the integration posed some challenges. Two disparate IT environments with different accounting and reporting models, separate enterprise resource planning (ERP) systems, and multiple business intelligence (BI) tools required extensive manual intervention and offline data manipulation, preventing uniform reporting and analysis. Data was trapped in silos. Visibility was insufficient. A new CFO and the finance and accounting teams lacked the insight to support effective forecasting and both strategic and tactical decision-making. In a sector as competitive and fast-changing as food products, this company needed to increase visibility quickly.

After

Unified financial operations support global success.

While this CPG company’s business is spread across two continents (and originates from a number of acquired companies), its financial operations are now centralized and unified. A cloud-based platform extracts and loads data from numerous global sources, then configures and stores it in a central location. Accounting staff across multiple back offices work within a single governance structure and with a single set of streamlined processes, enabling effective reporting and supporting a swift, accurate close. Across the enterprise, visibility is excellent, and insights are at the ready, because analysts can perform real-time calculations and drill down swiftly to the meaning behind the numbers. Unified financial operations helps this $48 billion player predict accurately, plan effectively, and act swiftly—all crucial in a sector where windows of opportunity close as suddenly as they open.

Future

A strong foundation that can keep pace with continued growth.

There will be more acquisition targets in the company’s future. And with a cloud-based platform, governance framework, and standardized processes in place, integrating financial operations will be a swift, sure process. A successful integration inspired the CFO and global finance team to consider other areas for transformation. From evolving multiple layers of the target operating model within Finance, to jump-starting transformation across other functional areas, a powerful ripple effect began and continues across the enterprise. Having the right tools and processes to support a grander vision driven by meaningful insights will continue to empower positive change.

Before

Poor visibility threatened business objectives.

Acquiring a large organic food and beverage business helped a global CPG company expand its operations and nearly double its revenue in the U.S. However, as with most mergers, the integration posed some challenges. Two disparate IT environments with different accounting and reporting models, separate enterprise resource planning (ERP) systems, and multiple business intelligence (BI) tools required extensive manual intervention and offline data manipulation, preventing uniform reporting and analysis. Data was trapped in silos. Visibility was insufficient. A new CFO and the finance and accounting teams lacked the insight to support effective forecasting and both strategic and tactical decision-making. In a sector as competitive and fast-changing as food products, this company needed to increase visibility quickly.

After

Unified financial operations support global success.

While this CPG company’s business is spread across two continents (and originates from a number of acquired companies), its financial operations are now centralized and unified. A cloud-based platform extracts and loads data from numerous global sources, then configures and stores it in a central location. Accounting staff across multiple back offices work within a single governance structure and with a single set of streamlined processes, enabling effective reporting and supporting a swift, accurate close. Across the enterprise, visibility is excellent, and insights are at the ready, because analysts can perform real-time calculations and drill down swiftly to the meaning behind the numbers. Unified financial operations helps this $48 billion player predict accurately, plan effectively, and act swiftly—all crucial in a sector where windows of opportunity close as suddenly as they open.

Future

A strong foundation that can keep pace with continued growth.

There will be more acquisition targets in the company’s future. And with a cloud-based platform, governance framework, and standardized processes in place, integrating financial operations will be a swift, sure process. A successful integration inspired the CFO and global finance team to consider other areas for transformation. From evolving multiple layers of the target operating model within Finance, to jump-starting transformation across other functional areas, a powerful ripple effect began and continues across the enterprise. Having the right tools and processes to support a grander vision driven by meaningful insights will continue to empower positive change.

Client transformation journey

  • Before

    Poor visibility threatened business objectives.

    Acquiring a large organic food and beverage business helped a global CPG company expand its operations and nearly double its revenue in the U.S. However, as with most mergers, the integration posed some challenges. Two disparate IT environments with different accounting and reporting models, separate enterprise resource planning (ERP) systems, and multiple business intelligence (BI) tools required extensive manual intervention and offline data manipulation, preventing uniform reporting and analysis. Data was trapped in silos. Visibility was insufficient. A new CFO and the finance and accounting teams lacked the insight to support effective forecasting and both strategic and tactical decision-making. In a sector as competitive and fast-changing as food products, this company needed to increase visibility quickly.The preconfigured assets and technology accelerators delivered by KPMG Powered Enterprise let ambitious leadership teams take advantage of embedded leading practices to speed up the decision-making process while instilling confidence.

  • After

    Unified financial operations support global success.

    While this CPG company’s business is spread across two continents (and originates from a number of acquired companies), its financial operations are now centralized and unified. A cloud-based platform extracts and loads data from numerous global sources, then configures and stores it in a central location. Accounting staff across multiple back offices work within a single governance structure and with a single set of streamlined processes, enabling effective reporting and supporting a swift, accurate close. Across the enterprise, visibility is excellent, and insights are at the ready, because analysts can perform real-time calculations and drill down swiftly to the meaning behind the numbers. Unified financial operations helps this $48 billion player predict accurately, plan effectively, and act swiftly—all crucial in a sector where windows of opportunity close as suddenly as they open.

  • Future

    A strong foundation that can keep pace with continued growth.

    There will be more acquisition targets in the company’s future. And with a cloud-based platform, governance framework, and standardized processes in place, integrating financial operations will be a swift, sure process. A successful integration inspired the CFO and global finance team to consider other areas for transformation. From evolving multiple layers of the target operating model within Finance, to jump-starting transformation across other functional areas, a powerful ripple effect began and continues across the enterprise. Having the right tools and processes to support a grander vision driven by meaningful insights will continue to empower positive change.

We worked with our client to gain the perspective that looking at the close was not only about producing accurate numbers about the business, but also supporting all functions to engage around what those numbers mean to the business. The real value occurs when you use technology to support your discussion of the story behind the numbers—the factors and conditions that are affecting your business.

Ralph Canter

KPMG Managing Director, Finance Transformation

1. Vision Phase
Reimagining Reporting

Understanding how financial reporting could be improved meant understanding how the current process had evolved as well as the culture behind it.  Most of the company’s business comes from selling PCs and other hardware—categories that have existed for decades.  And many of the financial professionals involved in reporting are long-term employees accustomed to working within an established (if unwieldy) system that consistently produced strong reports. Finally, it’s worth noting that achieving consensus among teams and managers had always been a key element in the company’s organizational culture.

All of this meant that persuading the finance department to embrace change wasn’t easy. But once our KPMG team had demonstrated an in-depth grasp of the background, work processes, and technology used for reporting, we began to gain greater acceptance for a new approach. Only after this essential buy-in was achieved did we explain how to leverage the cloud-based technology they already owned from SAP and Workiva to execute the work.  Key steps included:

  • Establishing a target operating model for how a best-case R2R process should work
  • Challenging embedded governance and “rules” that no longer added value
  • Breaking down established functional silos for better workflow and data sharing
  • Establishing an enterprise global process owner
  • Optimizing the functionality and value from the existing technology landscape.

2. Validation phase
Making the most of a dedicated, experienced financial team

Early in the engagement, the client asked our team to document the current R2R process since little formal documentation existed within the company.  Each participant had their own set of rules, systems, and procedures, but a full perspective on how the entire process worked was hard to pin down. In a matter of weeks, we were able to show the client the reality of the multiple inputs, data challenges, and constant revision that went into each report. Yes, the final output was still on time and accurate, but the method for getting there was labor-intensive, requiring the finance department to work longer and harder than necessary.  To address these issues and identify better alternatives we began by:

  • Reviewing and documenting the existing R2R processes and technology
  • Defining success criteria for an improved reporting process
  • Rationalizing an overall strategy across key reporting packages
  • Developing a detailed data model identifying all required data points.

3. Construction phase
Saving time where it matters most

While the upgrade to SAP’s S/4HANA platform delivered company-wide efficiencies, it had little impact on the later stages of the reporting process. One reason was that two sets of reports were developed simultaneously for different constituents: purely fact-based quantitative external reporting for shareholders and regulators and more qualitative reports used by management to explain quarterly results. The process for creating these reports was only partially automated through older techniques that required extensive human inputs. To replace this, KPMG made changes to Workiva’s reporting software that allowed it to access data from a single, validated source and generate fully automated reports. Other improvements included:

  • Removing 99 percent of export/import activities through common data model linking
  • Configuring all reports in Workiva, including rollforwards to support cash flow reporting
  • Developing a process to support commentary creation in Workiva
  • Eliminating unnecessary extracts and Excel models
  • Streamlining communication and discussion by removing emails as the primary discussion forum
  • Enabling a more digital process for comparing differences between periods
  • Streamlining the process automation connections between similar external and internal reports.

4. Delivery phase
Building the processes needed to support a modern, digital platform

Implementing a full digital transformation instead of spot fixes for individual problems was a key factor in shortening the R2R process by five days.  Quarterly and monthly reports are already being created on this new schedule, with fiscal year-end reporting set to follow. Other benefits being realized include:

  • Streamlined, quantitative monthly enterprise report and qualitative “story behind the numbers” processing
  • Automated cash flow reporting process
  • Reduced validation across report packages
  • Automated data integration/availability to report preparers and end users
  • Developing a leaf-level data repository capable of supporting a growing set of reporting demands
  • Improved employee morale due to lack of redundant processes
  • Increased collaboration in commentary compilation and review
  • Reduced control effort and reconciliations of data.

 

5. Evolution phase
From fixers to futurists – Spending less time ensuring data

Helping the client make the most of technology from Workiva and SAP was an accomplishment in itself.  But the bigger achievement was changing their perspective on how to manage the R2R process and expanding its value within the organization. Historically, R2R participants found themselves spending too much time focused on double- and triple-checking numbers, seeking out bad data, or working around anomalies in the system. But as reporting grows faster and more automated, it promises to make information more available and relevant—not just on a monthly or quarterly basis but continuously. By building on this foundation, finance departments can look ahead to providing forward-looking strategic information and analysis to a wider range of end users inside and outside the organization.

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Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. KPMG LLP does not provide legal services.

The information contained herein is not intended to be “written advice concerning one or more Federal tax matters” subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

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