Finance Effectiveness Benchmarking Report

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How Leonardo brought independently run subsidiaries to one single chart of accounts

A complex high-tech outfit leverages leadership support, cooperative people and motivation to become one company.

The challenge: Bringing together multiple subsidiaries under a single CEO

Achieving finance transformation that delivers the expected business benefits is not easy. The larger and more complex the business, the harder it becomes. But the “One Company” project at Leonardo proves that it is possible, and can be successfully achieved at high speed even in a very large and highly complex business. How has it been done?

Leonardo is a global high-technology company focused on the aerospace, defense and security industries. The company employs over 45,000 people, with a revenue of €11.5 billion. Headquartered in Italy, Leonardo also has a significant presence in the UK, the United States and Poland, as well as industrial and commercial operations in over 20 countries worldwide, with about 170 sites. Founded in 1948 as Finmeccanica, the company has been involved in numerous mergers and acquisitions over the years and was ultimately renamed in 2016 in honor of Leonardo da Vinci, a universal symbol of genius and creativity.

Leonardo began a large-scale finance transformation, called “One Company,” in 2016. At this time, the company integrated multiple subsidiaries into one industrial company under a single CEO, Mauro Moretti. The new vision of the company and its CEO was described as “one name, one voice, one company.” A key goal of the transformation in the first project phase was to bring all the different former organizations into a single ERP system and a single chart of accounts, with standardized processes enabling the One Company. At the beginning of the transformation, the seven divisions of the new company had their own rules, systems and custom processes.

Building new divisions and bringing them together

Sponsored by the CEO, a crucial early decision was the choice of leader of the One Company program. Jean Paul Giani was previously a CFO of one of the integrated subsidiaries, and as one of the most senior leaders in finance with deep experience, he was the ideal choice to lead the finance transformation alongside the CEO and CFO.

Jean Paul explains how Leonardo managed the transformation, building some new divisions from scratch, such as aircraft and defense. In particular, the defense division, resulting from the merger of two companies OTO and WASS, was chosen as a pilot for the implementation of the new standardized processes for accounting and the new ERP, which was based on SAP S/4 HANA technology. This initial step was highly successful and widely celebrated—and it created momentum. Leonardo followed by rapidly defining the road map to bring other divisions onto the new standard ERP.

The One Company project, started in Italy, was then exported to the UK, where a new One company, Leonardo MW, has been created, based on the same principles and on the same model previously defined for Leonardo. The transformation journey is currently in progress, having launched the rollout of the new standard ERP SAP S/4 HANA for the two divisions of the aeronautic sector in September 2018.

Gaining the right support, planning and people

Jean Paul notes that one of the keys to the success of the finance transformation and integration was the fact that the project had strong support from the leadership team.

There was full commitment from the CEO, stating “I’m the CEO of the group and I’m the first project manager of this program.” Jean Paul describes how the top management of the group saw the transformation as a key strategic initiative, staying involved in the transformation and making sure the whole company knew it was a top priority.

The importance of this strategic initiative was also confirmed in 2017 by the new CEO, Alessandro Profumo, who continues to sponsor it alongside the CFO, Alessandra Genco.

Building a house, not switching apartments

Jean Paul also outlines how top management was fully behind the investments required for the success of the initiative, knowing what benefits a successful transformation would provide to the company. Staffing the transformation initiative was also critical. Jean Paul describes how he insisted on getting the best finance people from each division assigned to work with him on the transformation.

He emphasizes the importance of working with the right people, rather than just whoever was available. In the end, he says, the success of such a project is about “having the right support, doing the right planning, choosing the right people. It’s those kinds of things that organizations don’t do right, and you have to do right to get this kind of technology-enabled transformation program working.” 

Although adoption of a new ERP was a key part of this process, Jean Paul emphasizes that the process that Leonardo is going through is a business transformation, not an IT transformation.

The challenge: Bringing together multiple subsidiaries under a single CEO

Achieving finance transformation that delivers the expected business benefits is not easy. The larger and more complex the business, the harder it becomes. But the “One Company” project at Leonardo proves that it is possible, and can be successfully achieved at high speed even in a very large and highly complex business. How has it been done?

Leonardo is a global high-technology company focused on the aerospace, defense and security industries. The company employs over 45,000 people, with a revenue of €11.5 billion. Headquartered in Italy, Leonardo also has a significant presence in the UK, the United States and Poland, as well as industrial and commercial operations in over 20 countries worldwide, with about 170 sites. Founded in 1948 as Finmeccanica, the company has been involved in numerous mergers and acquisitions over the years and was ultimately renamed in 2016 in honor of Leonardo da Vinci, a universal symbol of genius and creativity.

Leonardo began a large-scale finance transformation, called “One Company,” in 2016. At this time, the company integrated multiple subsidiaries into one industrial company under a single CEO, Mauro Moretti. The new vision of the company and its CEO was described as “one name, one voice, one company.” A key goal of the transformation in the first project phase was to bring all the different former organizations into a single ERP system and a single chart of accounts, with standardized processes enabling the One Company. At the beginning of the transformation, the seven divisions of the new company had their own rules, systems and custom processes.

Building new divisions and bringing them together

Sponsored by the CEO, a crucial early decision was the choice of leader of the One Company program. Jean Paul Giani was previously a CFO of one of the integrated subsidiaries, and as one of the most senior leaders in finance with deep experience, he was the ideal choice to lead the finance transformation alongside the CEO and CFO.

Jean Paul explains how Leonardo managed the transformation, building some new divisions from scratch, such as aircraft and defense. In particular, the defense division, resulting from the merger of two companies OTO and WASS, was chosen as a pilot for the implementation of the new standardized processes for accounting and the new ERP, which was based on SAP S/4 HANA technology. This initial step was highly successful and widely celebrated—and it created momentum. Leonardo followed by rapidly defining the road map to bring other divisions onto the new standard ERP.

The One Company project, started in Italy, was then exported to the UK, where a new One company, Leonardo MW, has been created, based on the same principles and on the same model previously defined for Leonardo. The transformation journey is currently in progress, having launched the rollout of the new standard ERP SAP S/4 HANA for the two divisions of the aeronautic sector in September 2018.

Gaining the right support, planning and people

Jean Paul notes that one of the keys to the success of the finance transformation and integration was the fact that the project had strong support from the leadership team.

There was full commitment from the CEO, stating “I’m the CEO of the group and I’m the first project manager of this program.” Jean Paul describes how the top management of the group saw the transformation as a key strategic initiative, staying involved in the transformation and making sure the whole company knew it was a top priority.

The importance of this strategic initiative was also confirmed in 2017 by the new CEO, Alessandro Profumo, who continues to sponsor it alongside the CFO, Alessandra Genco.

Building a house, not switching apartments

Jean Paul also outlines how top management was fully behind the investments required for the success of the initiative, knowing what benefits a successful transformation would provide to the company. Staffing the transformation initiative was also critical. Jean Paul describes how he insisted on getting the best finance people from each division assigned to work with him on the transformation.

He emphasizes the importance of working with the right people, rather than just whoever was available. In the end, he says, the success of such a project is about “having the right support, doing the right planning, choosing the right people. It’s those kinds of things that organizations don’t do right, and you have to do right to get this kind of technology-enabled transformation program working.” 

Although adoption of a new ERP was a key part of this process, Jean Paul emphasizes that the process that Leonardo is going through is a business transformation, not an IT transformation.

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Leonardo is not simply swapping out systems for each division, but rather building an entirely new structure. He likens this to building a house, rather than changing apartments; and “to build a house, you need an architect.”

A single view across the entire business

Leonardo has realized huge benefits through this finance transformation. Jean Paul stresses that they are no longer an Italian parent company with independently run subsidiaries. “Leonardo is now truly one global company.” Having a single ERP system with a single chart of accounts really enables this. For the first time, the company can see across the entire business and, for example, compare the margins of selling a product in Italy to the margins of selling that same product in the United States. Invoices can be processed more quickly, with more working capital freed up for new ventures.

Jean Paul states, "Previously, we were comparing apples with tomatoes!” and he goes on to explain that now the head of manufacturing in any division can “trust the numbers you have delivered to them and trust the figures when they know that you have processes and the system that make those figures perfectly available and accurate.” Technology has been a key enabler to get here, and in the future this brings a need for new skills in finance. According to Jean Paul, “These are not IT people, but we need skills in areas like data analytics, big data and robotics. However, these systems and processes need to be maintained by finance people who really understand the CFO’s needs.”

“These are not IT people, but we need skills in areas like data analytics, big data and robotics. However, these systems and processes need to be maintained by finance people who really understand the CFO’s needs.”

Jean Paul is very excited about the the progress Leonardo has made, and the speed with which the business has been transformed. He attributes their transformation success to “top-level support and leadership, outstanding people and a strong motivation to succeed."

This profile is part of PwC’s 2019 Finance Effectiveness Benchmarking reporting. PwC would like to thank Alessandra Genco, Group CFO, and Jean Paul Giani, Senior Finance Special Projects for their insights on Leonardo.

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Robert Bishop

Consumer and Industrial Products & Services Finance Leader, PwC US

Christopher Dimuzio

Principal, Finance Transformation Leader, PwC US

Ed Shapiro

Director of Finance Effectiveness, PwC US

Brian J Furness

Global Consulting Finance Leader, Partner, PwC United Kingdom

Gavin Hildreth

Finance Benchmarking Lead, PwC United Kingdom

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