How systems modernization using SAP S/4 HANA and process overhaul revved up decision making, growth, and agility for a top global reinsurer
Our client, a global reinsurance major, had an extremely comprehensive financial systems landscape that served them well for a long time. However, the existing business systems were not fit to catch up with the surge in global regulatory reporting demands.

The organization needed 55 days to bring its annual financial reconciliation cycle to closure. The process was fraught with data inconsistency, inordinate complexities, and access to insights for decision making. There was an immediate need to transform the financial reconciliation process to deliver faster, robust, and accurate results.

Today it takes five days for them to close their reconciliation cycle. Let's look at how they achieved this paradigm shift by partnering with us.
The Challenge
Keeping pace with the dynamic organization demands, becoming trusted advisory to business, and reducing exposure to risks with non-compliance.
Europe went through a turbulent phase post-2008, and regulators brought in new regulatory requirements to drive transparency around solvency and taxation. They also recommended a slew of internal measures to counter any non-compliant activities

2013-14 tuned out to the tipping point for our client when they realized the current set up would not carry them to the next level market demands. It was a ticking timebomb, and the risk they were sitting on was massive. They decided to build a long-term financial transformation program that will help them become agile in financial reporting and drive F&A excellence.

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Figure 1 – The evolution of regulatory reporting requirements
The leadership team realized the sprouting business needs that demanded consistency and increased capacity for business analysis and intelligence. This shift of approach was possible only if they had strong foundations of standardized processes, robust reporting, and timely delivery of financial information. These three pillars were critical to building a resilient and steering balance sheet. That's how they began their 10-year journey to drive excellence by transforming their financial management function. Three priorities clearly emerged out as mission-critical to the success of this transformation program:
  • Reducing the lead times of various processes and closures in their finance ecosystem was crucial to its mission.
  • Modernizing its historically grown legacy systems into a simplified and integrated set up with a high degree of automation, data analytics, and process control enables swift closures supporting a cultural shift towards data-driven decision making.
  • Bringing an end to the ineffective collaboration between multiple teams for financial reconciliation.
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Figure 2 – Three priorities clearly emerged out as mission-critical to the success of this transformation program
The Solution
Simplify and standardize reconciliation to build efficiency, transparency, and reliability
As part of the operation model review, our client identified the need to switch to one integrated general ledger to drive simplification and standardization. To support this objective, our team of experts built an integrated one general ledger and one chart of accounts built on SAP S4 HANA platform that served as the interface between consolidation exercise and the information flowing in from multiple sub-ledgers. It provided a single source of financial data and a harmonized multi-valuation chart of accounts.
Accelerate and reduce process cycle times by removing obsolete steps from the reconciliation cycle
Our team collaborated with client to reduce the redundancies and number of obsolete steps that existed in the account reconciliation process. We worked with the team to build an agile methodology-based framework, refined their target operating model, and laid the foundation for future product development and change management. We leveraged the cloud to bring in scale to streamline their process and counter redundancies that were pervasive across their operations.
Build financial information transparency and drive faster and accurate decision-making at-scale
We worked with the client to improve the availability and management of financial data, eliminate effort-intensive reconciliation, and reduce critical personnel dependency. To minimize the number of exchanges between a sub-ledger with multiple ledgers, we built an integration layer that served as the intermediary between one general ledger and various sub-ledgers. Instead of fleshing out numerous reports and then consolidating them, everyone now had access to one consolidated monthly report on the cloud (SAP S/4HANA) to drive agility at-scale and drive cost optimization. This program transformed these aspects of their financial management process - cost transparency, general and sub-ledger, reporting, lease accounting, controlling, and intragroup retro acceleration.
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Figure 3 – Our three-pronged approach to driving financial business transformation
The Impact
An agile, efficient, transparent, and risk-averse organization
  • The financial reconciliation cycle time for the client has shrunk tremendously – from 55 days to 5 days. The standardized and integrated finance platform is highly efficient and now supports regional and local compliance needs. Now, they don't have to deal with excessive general ledgers now that they have a single, standard and integrated general ledger for all.
  • Everyone now has access to one consolidated MIS that has massively improved the consistency and timeliness of the generation of management reports. Checks and balances are now in place to ensure the reliable production of financial information and auditability of all financial statements and valuations.
  • They are now compliant with US GAAP, STAT, and EVM, making its balance sheet more resilient and steering through multi valuation. From mere SOX and GAAP to this level of compliance has been nothing short of transformational. While supporting this global reinsurer on their first milestone of their transformation journey, as you read this, our team of experts is now helping the organization achieve the second milestone – more on that in times to come.
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