24/03/2017 | Written by: Katleen Aems
Categorized: Data & AI
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In what follows, we’ll take a look at how a company that is future-ready product- and service- wise, can ensure that its finance department is future-ready as well. A great example is Materialise, a company famed for its expertise in everything related to 3D printing. They recently collaborated with IBM to renew the entire handling of their financial processes. We sat together with them to talk about their story. They’ll also share tips and tricks for companies who want to tackle similar problems.
Society is moving at an ever faster pace, and new innovations always lie just around the corner. The fourth industrial revolution is in full swing, and the products manufactured and services provided by companies keep baffling us day after day. However, having a product or service that is up to the task of dealing with the challenges of the future, does not mean that your company itself is automatically future-ready as well.
One of the key areas of business management in which a lot of improvements can still be made, is the finance department. Often dreaded, sometimes despised – the negative attitude towards the department in the rest of the company may have become a bit of a cliché, but every cliché is grounded in a certain truth. This unfavorable view is largely based on the hopelessly outdated, rigid processes for everything finance-related. Moreover, a myriad of problems can cause an even greater deal of frustration: forecasting that is not precise, unrealistic KPIs not based on financial data – data that often lies dormant and unused within the labyrinthine depths of the company -, reports packed with difficult financial lingo that fails to resonate with people in other departments…
Getting finance departments up to speed
However, the potential of a finance department adapted to the speed and agility of the company as a whole cannot be underestimated. The question, then, is not if a company should modernize their finance department, but how soon they can start doing so. Some companies lead by example. One of those companies is Materialise. The fast-growing, Belgium-based company has more than 25 years of experience in a range of software solutions and 3D printing services. Active in almost all areas of the 3D printing ecosystem, they cater to sectors as diverse as healthcare, automotive, aerospace, and art & design, with activities in five continents. As the fast-growing backbone of a fast-growing industry, Materialise needed financial solutions that were flexible and agile enough to keep up with their complexity and pace of growth in a smooth manner.
Gudrun Verhelst, Financial Reporting & Consolidation Manager at Materialise: “Over a relatively short period, Materialise evolved from a medium-sized, international family company to a Nasdaq-listed multinational. We’re overseeing a great deal of activities, across different sectors and across different continents even. Our initial goal, then, was to make our complex consolidation processes less manual. That is why we approached IBM.” For that consolidation process, Materialise is now using the IBM Cognos Controller platform, which was set up in August 2015. Other platforms that are being rolled out as we speak are Cognos TM1 for planning, budgeting and forecasting processes, and Cognos Disclosure Management for company-wide consistent reporting.
So, what changes are visible nearly a year after the initial deployment?
For one, it allows people to free up time by getting rid of tedious number gathering, so they can really do what they were hired for – sharing their financial expertise. Gudrun Verhelst: “Before, our finance teams would spend 80% of their time gathering all relevant numbers and data, and only 20% remained to be dedicated to the real deal – the analysis of those numbers. Now, we see that it’s the other way around: only 20% of the time is dedicated to gathering numbers (which have the additional benefit of being much less prone to human error), and 80% can be spent on analyzing those numbers. That has consequences for the people in our team: they evolve more and more towards roles like business controllers and real financial advisors. And with numbers and data that are more robust, agile, and reliable, people feel more confident and stress levels are down.”
Johan Albrecht, CFO at Materialise, confirms the positive influence technology has on his finance department. “Whereas before, the finance department was not very integrated into the business process of the overall company, new technologies allow us to kick that integration up a notch or two,” he says. “Now, we can create real added value – for a fast-growing company like ours, the leveraging of scale effects and the acceleration of performance are key – accurate, data-based forecasting tools are not a luxury at all in these times.”
“It also helps us to cut to the chase, in an automatic and fast manner, and in a complex international organization like ours, that is of primordial importance. To take but one example: if I want to know the effect of currency conversions on our results, a push on the button suffices to get a complete overview of the overall effects, within a matter of minutes. You don’t have to be a rocket scientist to see how much time that saves.”
From chief financial officer to chief financial partner
Johan Albrecht acknowledges that his role as a CFO has been changing as the project is being rolled out. “Of course, this is not a project that you implement overnight – we’re moving step by step. We’re in it for the long haul, but I did notice that my role as Chief Financial Officer, like that of my finance teams, is gradually evolving in the anticipated direction. Technology actually makes my job both more business-oriented and more human. Time-consuming tasks are now left to the software behind our new platforms, freeing up time for the things that really matter, the things that make your work as CFO much more worth it. I’m fulfilling a role as partner, communicate much more across departments, and now that reporting is more robust and is being validated reliably, I can create more added value to the organization. As the finance department is getting integrated more and more into the organization as a whole, the CFO is getting more and more integrated into the executive team at Materialise. For example, blending financial KPIs with operational KPIs is done more often, and I now have the right reports to back up my story. Reports that, I should add, have much more impact now that they resonate well across different departments, for instance by using production engineer lingo for reports targeted towards production engineers, and so on.”
“And these developments can only be amplified when we really dive into management reporting, seeing opportunities at the flick of a switch – literally. My role is becoming less technical, and I can focus more and more on the bigger picture now.”
Truly a chance for change
Looking back at the past year since the project was first deployed, we asked Materialise whether they had tips for companies willing to take the step toward a more automated and agile handling of finances.
“Having the right people in the right place is key here,” Johan Albrecht asserts, “along with solid project management. It’s quite an undertaking, but the return on investment in terms of efficiency and quality gain is more than worth it. Gudrun Verhelst can only affirm the importance of good change management. “As far as the software itself is concerned, there are not a lot of problems. The ‘go live’ phase went marvelous as well. It’s all extremely intuitive – there’s a relatively small input required from IT. However, a big challenge is getting all people aligned – big changes take time to get used to, and that aspect might be the predominant obstacle to work around. But with a solid change management, even that shouldn’t be too big of a hurdle.”
Johan Albrecht: “What’s more, projects like the one we have undertaken with IBM are an ideal opportunity to rethink your whole way of going about your business. It makes you stop and wonder about what can be done better elsewhere in the company too. Since we started implementing the different Cognos platforms, we’ve also rethought our accounting systems, analytical structures… We’ve fine-tuned processes, reinforced teams,…”
“Having the platform installed was not just a sound investment with regard to price/quality – it’s much more than that: the change that is brought about by these projects reverberates throughout the company, and we feel confident that we can really realize our financial future now.”
If you want to find out more about how IBM solutions can help your finance transformation, please visit this page.