Going big on digital transformation

Adam: Hello and welcome to PWC Canada's newest podcast, Finance in 15, a series that explores finance transformation and what it means for leaders in the finance function. My name is Adam Boutros and I'm your host. 

Adam: So we've said from the beginning of this series that finance transformation isn't just about technology, but it's still a very important aspect, especially with so many organizations moving to the cloud. So for this episode, we're going to talk about digital transformation and what it means for finance leaders. This is a huge opportunity that can truly be transformative for organizations that approach it as more than an I.T exercise. Joining me to talk about this is Michelle Bourgeois, ERP Consulting Partner at PWC Canada. Welcome, Michelle, and thanks for joining me.

Michelle: Thanks, Adam. It's great to see you online. 

Adam: Alright, so let's get started. Michelle, first, can you talk about what digital transformation means for finance leaders and what CFOs are looking for in moving to the cloud? 

Michelle: We've had quite a few conversations with the executive team, and we're finding that when they talk about the digital transformation, there's a lot of the aspects are around reporting and data. In my world, which is SAP and S/4Hana, obviously, it's become very relevant as it's an opportunity to really rethink how the data is being used and accumulated in those systems today. We've talked to customers who've had their ERP systems now for 15, 20, 23 years and obviously they are not running the same business they ran 15 and 20 years ago. And so this opportunity in this digital transformation is obviously more than just a technology exercise. But using that technology really allows an opportunity to take a look again, how they're running their business, how they want to run their business tomorrow, and how they can best reflect that in the new, the new system they're going to move to. You know, in general organizations through that 10 to 15 years either have built up either more complex types of businesses or sometimes they've had a number of what we call carve-outs or demergers and simplified. And often what they've built are reporting and data repositories outside of their larger ERP that they can use to translate so that they can get the reports they're looking for, because the system itself and the structures they have in place today no longer represent their business. It's really about data in this big opportunity to significantly improve transparency and ultimately the management reporting. 

Adam: OK, I really like the way you position that and I could not agree more. And so I would like to double click on that last point that you raised. What do you hear most often in your chats with CFOs around their struggles with management reporting?

Michelle: They have business partners, so they have whether it's the customer-facing or other types of logistics, types of partners or other business partners who are looking for key data from the system to make management decisions. And for them, they feel that they are a primary stakeholder of the larger ERP system. And having said that, though, many of the other stakeholders they provide services for when it comes to that data right? And properly using that data to make management decisions.

Adam: Yeah, OK. A different thing that I've heard you talk about quite often Michelle, is all roads lead to the CFO. What about the concept of a business-led approach to technology change?

Michelle: On the business-led what we found is twofold. Likely the move when it comes to the S/4HANA  piece is complex and large that it will impact the business. Often the CIOs I've spoken to recognize that to make such a large move really introduces the risk of, of missing that opportunity to add real additional value to their customers. In doing that, they reduce the risk when they do it just as a technical project, a potentially looking like the sole source of the issue. So from a CIO perspective, you want to involve the business. Now for the CFO, if they want to be involved, it's really important that they have strong vision, so an example would be is we often work with companies to discuss the pain points and what they're seeing now in their current systems and what are the types of opportunities you might look at it as the, the art of the possible of S4. But if the CFO doesn't have a clear vision of where they would like to improve, it'll end up being, just stay, but what doesn't work today, discussion versus how can we move the needle towards your new future? So, we want to take it away from just a migration to a transformation and so for the CFO to really help the CIO to do that, if I could just summarize, is to make sure that they have a vision of what that future looks like.

Adam: Yeah, that's great. And I think the concept you just talked about applies to the rest of the C suite as well. Let's shift gears to the people aspect. How do you get the whole organization on board for a successful transformation?

Michelle: One of the things I think we do well as this workforce of the future and there's a lot of discussion around upskilling today and everything is moving so fast with all the new systems and dashboards, the idea of digital transformation, which I think from now on is continuous improvement, really enables these finance teams to provide value to their business customers. So it does require that companies ensure that those finance teams and people, the employee experience is well adopted. We can introduce great data, we can introduce great tools, but we've got to make sure that the teams and our employees really understand how to use them because there's a lot of power in being able to successfully analyze that data once you know it's a single source of truth.

Adam: Great point. And, you know, as a side benefit, we know a lot of finance teams are really looking for the opportunity to move away from Excel jockeying and really get into some, some analysis, so can be a nice side benefit.

Michelle: Yeah, it's this idea of moving from the transactional focus and just trying to clean data and spreadsheets, which a lot of finance people do, and moving to more analytical work.

Adam: OK, let me hit you with the question that I probably get most often, Michelle. Clients always want to know, what are my peers doing? What's everybody else doing? What's their, what's their plan to tackle ERPs moving to the cloud, for example, we know SAP On Premise has a sunset date out on the horizon. So maybe you could share a little bit around what you're hearing with some of the organizations that you talk to across Canada.

Michelle: It's sort of a forced move. I think it's not an effort to win. So everybody needs to move by 2027 so we know that you'll need to back up a year. There's often a target, which is S4, and there's where you've come from. So a lot of the customers there is no perfect path, right? So you'll hear the idea of a brownfield or a greenfield. And so Greenfield would be a net new, which sounds really interesting to people. And then there's this at the far other end is just a technical move, which we don't recommend because we've had a few customers do purely technical and not be very happy with that and often it ends up being somewhere in between. And when you're taking a look at that in-between, you need to address data, process the impact on the business, also the art of the possible of what you will get in the new system. And then that allows you to better understand some of the impacts to the team and some of the, also just the changes that have been made. Now, today, we had a conversation, you and I, with a customer who's had the system for almost 20 years right? And not, not everyone has had it for, for twenty years, but some of our larger customers have had it for quite a while and I think they have more work to do then some than that have had it say two or three years who are reasonably pretty close to standard and really just are looking to see what are the, what are, what's the art of the possible in S4. And we spent a lot of time with finance teams helping them understand what is available, what are the new tools, how they, how they can do, how they can do their jobs very differently.

Adam: That is a great bit of insight there, Michelle, and I can't think of a better way to wrap this up than the words art of the possible that you used. I think that really describes the opportunity that's in front of organizations right now. So we've covered a lot here today, Michelle. And, you know, we always like to strive for simplicity. If you had to sum up where an executive out there could get started on their journey, what would your advice be?

Michelle: I think I'd have to say it's a, it's a pretty complex undertaking. The move to S4, I think if you were to get started, I, I'd suggest talk to your peers, understand how they've approached this this move and and try to educate yourself on some of the new aspects of S4 that can really create a case, a value case before you reach out to potentially a PWC.

Adam: We really do think at PWC this is a once in a generation opportunity to really transform and we've seen how powerful they can be when leading-edge companies take a business-led approach. So we really can't emphasize that enough and if you'd like to hear more about that, take a look at some of the resources that are available for your transformation journey. Pop on our website, there's some, some really cool examples there. And, of course, Michelle, myself are available to kind of further the conversation. We'd also encourage you to stay tuned for further episodes of Finance in 15 as we continue to explore these exciting opportunities ahead for our finance leaders. And if you like what you've heard so far, please leave us a review. Thanks for joining us. I'm Adam Boutros, joined by Michelle Bourgeois. And this is Finance in 15.