Use Case
OneConsolidation
The Company
is a globally operating company in the electrical engineering and automation industry. The company offers a wide range of products and solutions, including industrial connection and automation technologies such as terminals, connectors, surge protection devices, controllers, software solutions, network components, and safety products. It is known for its innovation and high quality. Particularly noteworthy is its commitment to sustainable technologies and solutions, such as electromobility and renewable energy.
The Initial Situation
The monthly corporate financial statements are currently prepared exclusively by the Controlling department outside of the integrated system environment. The consolidation at the group level follows simplified, pragmatic approaches. However, a legal, consolidated group financial statement is not prepared. In some areas, there is a lack of mutual knowledge and understanding of the methodological approaches and process flows in internal and external accounting.
Initial thoughts on better collaboration between the two departments have been internally developed in light of the upcoming S/4 HANA migration and the planned introduction of S/4 Group Reporting, but they have not yet been integrated into a comprehensive concept.
The Approach
The project was divided into five different modules that built on each other and were conducted partially on-site in person but mostly remotely online. The use of MIRO boards, combined with clearly defined preparatory activities on the client side, proved to be particularly effective.
In the first module, "Data Structures & Consolidation Requirements," the reporting requirements from FI and CO were aligned and defined. Based on this, 14 data fields were identified that must be available in the future to meet the reporting requirements for consolidated financial statements.
The second module, "Process Flows," covered the target closing processes for the various reporting cycles, which were jointly modeled and then documented in VISIO, including all content-related handover points. These serve as the basis for the future closing schedule.
In the module "Systems and Modules," all relevant systems were recorded, including their functionalities, users with their permissions, and the interfaces.
In the fourth module, "Organization & Roles," the organizational structure, responsibilities, and key tasks were defined and documented in a RACI matrix. The mutual dependencies between this and the previous module were carefully monitored through continuous feedback loops.
Finally, all essential activities and outcome types were compiled into a roadmap leading up to the go-live of the future SAP Group Reporting consolidation system and the new processes. The roadmap specifies responsible parties and implementation timelines.
4C Use Case: OneConsolidation
Target Operating Model for Consolidated Financial Statements in Accounting and Controlling.
The Solution
The solution represents a Target Operating Model for consolidated financial statements and is complemented by an implementation roadmap leading up to the go-live. This ensures that in the future, harmonized consolidated financial statements between CO and FI will be available on time, derived from a unified, quality-assured data pool through transparently designed processes.
A roadmap with defined deliverables, clear responsibilities, and target deadlines ensures that the project's momentum is maintained throughout the long journey to go-live and that all activities are completed on schedule.
The Target Operating Model includes the following core elements in summary:
- Identity/Branding: The virtual team "One Consolidation" positions itself as the process driver with a quality seal, "One Consolidation Inside."
- Product: The team's ‘signature product' consists of "harmonized, quality-assured consolidated financial statements from a single source."
- Methods: Fourteen required data fields for all FI & CO reporting formats have been identified, and the consolidation approaches for each reporting cycle have been defined.
- Organization: There will be no changes to the organizational structure. One Consolidation will position itself as a virtual, agile team composed of members from FI, CO, and IT specialists.
- Governance: Quality and timeliness are established as the key performance indicators for internal team management and process control.
- People/Skills: Future team members from FI, CO, and IT support will follow the concept of the "Biltroller," who can navigate confidently in both worlds of accounting.
- Processes: A common, visualized FI & CO closing process with all content-related handover points has been modeled as the target process and serves as the basis for the closing calendars.
- Governance: A RACI matrix documents the responsibilities of the new team as well as other process participants.
- Systems: The target landscape will include SAP Group Reporting in conjunction with CFIN and ICMR, with reporting done via MicroStrategy.
Your Benefits
The structured approach taken in the workshops initially created significant transparency regarding the activities and methods used in other areas.
The very open and constructive approach of all participants enabled the development of viable solutions for the future joint closing process.
The documented processes, methods, and responsibilities provide excellent guidance to ensure efficiency in the closing process and the high quality of the financial statement data.
This also lays the groundwork for enhancing the quality of the financial statements through improved consolidation methods and optimizations in the adjacent operational accounting processes, ultimately enabling the generation of monthly consolidated financial statements in external accounting.
Your Temporary Co-drivers
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