A world-class financial close process on SAP®
Accenture today closes its books in four days at the country level, in five days globally, and in two days to deliver pre-close management reporting
Accenture business leaders need an up-to-date view of critical financial information to monitor global financial results and view activity throughout the close process. They also need it to report quarterly earnings results to analysts and the public on a predictable and timely basis.
In the early years, Accenture faced challenges in optimizing the financial close process among countries, local controllership teams and applications. Demands on support teams to produce reporting were excessive. These challenges drove the need for rethinking the monthly financial close process to streamline it. The financial close process is an accounting procedure undertaken at the end of the month to close out the current posting period. It consists of tasks that occur on a periodic basis (every day, period or month) and is the combination of system (batch) processing and manual tasks.
Accenture operates its business on a single, global instance of SAP® applications such as SAP S/4HANA® for its internal business functions. This posture enabled Accenture to establish a single financial close process, an effort that began from the ground up. A team from Accenture Finance and Accenture's global IT organization focused on rethinking the key components of organization and people, processes and technology.
The first step was to strengthen the organization by creating governance around the financial close process. Governance starts with the steering committee, which includes the corporate controller, global IT leadership and key business stakeholders, and sets direction on the close schedule and processes. A financial close operating committee was also established, representing Accenture’s global functional process areas, to ensure an end-to-end close process view that is integrated and owned by the business.
This step was followed by the formalization of a dedicated, centralized financial close team. This team is responsible for providing day-to-day oversight to the planning and execution of the financial close process, managing the toolset, measuring performance and driving continuous improvement. An important decision during this process was shifting accountability for the content of the financial close from IT to the business.
The final major step was adopting a follow-the-sun approach for executing the close process. This model enables financial close teams to be spread across Accenture’s geographies, allowing the financial close process to run on a 24/6 basis rather than be restricted to US time-zone hours.
The financial close team, together with Accenture’s SAP Finance Transformation domain, applied leading financial practices to industrialize the financial close processes. They focused on enhancing automation, schedule management, incident management and performance measurement processes.
Automation. The financial close team is automating manual and execution-related activities using commercially available tools, such as BlackLine Smart Close. Activities automated include SAP batch processes, validations that were previously manual, communications and close-related status reporting. As a result, 85 percent of the close playbook-related activities are now automated.
Schedule management. The critical first step in industrializing the schedule management process was the development of the financial close playbook. It contains approximately 3,000 automated IT and business tasks that need to be executed throughout the close process, together with their dependencies and timing. Those tasks spanned the financial close process and expanded to include interdependent, critical business processes such as time and expense, management reporting, and forecasting and budgeting. The global process functional area leads are held accountable for that schedule.
The team implemented subsequent processes to establish the upcoming schedule early—up to six weeks in advance, taking into consideration weekends and geographic-based holidays and working-hour schedules that led to a much more predictable schedule. The financial close playbook is then locked one month out. This approach drives stability in operations and work schedule/life balance expectations for Accenture people. The team also operates to a plan that limits members to the business hours of where they are located, but also work as required to meet service level objectives, which include contingency. A tight change control process forces discussions to limit unforeseen consequences.
Finally, a comprehensive communications approach was developed that provides clear, precise and timely information on the close schedule and availability of reports to users.
Incident management. With a better understanding of critical-path milestones in the financial close playbook, the teams could better prioritize the severity of incidents based on time-to-business impact. The incident management process was further enhanced by defining better escalation steps. It was also enhanced by ensuring the right level of leadership was driving the corrective measures, root-cause analysis, preventative actions and recovery options to modify the financial close playbook that minimize impacts to the close schedule. A robust incident management playbook enables the team to manage issues with defined escalation principles.
Performance measurement. The financial close team introduced a performance measurement process for operating the financial close capability and to serve as a baseline for continuous improvement. Three primary metrics were rolled out that assessed whether 1) service level objectives were met (reports delivered on time), 2) support teams operated to their internal plans, and 3) the close schedule contained sufficient contingency time to manage issues and support future growth. Establishing this process later confirmed the importance of achieving process excellence through well-defined processes first as input to IT design and development rather than immediately implementing new technologies.
“Operating Accenture’s SAP ERP system in the cloud has brought more agility to respond to business demands and the ability to use new SAP S/4HANA functionality, providing additional benefits to the financial close process.“
— MELISSA BURGUM, Assistant Corporate Controller, Accenture
Both Accenture Finance and global IT collaborated on the technology approach, keeping a constant eye on aligning smooth business operations and capability demands with viable technical options. The approach involved four key elements, the first of which was to enable high system availability, followed by a focus on monitoring and alert management, system performance and scalability.
High system availability. Global IT implemented a high-availability architecture in the infrastructure and established the necessary technical support to make the SAP system highly available, which is especially critical during the financial close so that users can access reports, data and process transactions to support the close process.
The IT team upgraded Accenture’s SAP system architecture and improved batch scheduling. Batch execution was distributed across multiple application servers to improve performance and reduce overall execution time. Batch execution is managed by a robust job scheduling tool. This allows Accenture to track job runtimes that are used to feed a predictability model. The model helps IT to analyze the impact of new changes or data growth to the overall close execution timeline. A move to a fully resilient and fortified cloud batch scheduling solution provides a high-availability and fault-tolerant architecture at all levels of the stack. The move to the cloud delivered on the business benefits of scale, agility and performance, all while reducing complexity.
Monitoring and alert management. Teams from Accenture’s Advanced Technology Center network play a key role in providing cost-effective support and monitoring SAP applications using such tools as SAP Solution Manager, which manages monitoring and sends alerts. At the same time, monitoring data is interfaced into Accenture’s infrastructure capacity plan, which enables the global IT organization to keep pace with Accenture’s growth.
As Accenture has grown, demands on its tools and people have increased. In response, Finance worked with IT to take technology to the next level. A digitization initiative replaced a suite of Excel-based tools used to manage the thousands of system and manual steps in the financial close with robust, integrated and automated execution and reporting software. The software integrates with Accenture’s SAP platform and a batch scheduling services platform that manages the execution and sequencing of those system jobs. This software now supports simultaneous updates from more than 50 financial close support team members and provides real-time status and alerts of the close against the financial close team’s internal plans and against its service level objectives.
System performance. High system performance enables the financial close process to run faster. Global IT uses three levers—system tuning, code optimization and data archiving—to maintain system health, maintain the close schedule and keep system headroom while the business is growing. System performance and health are automatically monitored in real time using industry-standard key performance indicators (KPIs) that serve to predict or identify a problem quickly.
In recent years, Accenture migrated its SAP enterprise and finance system to SAP S/4HANA. Accenture also migrated its SAP Business Warehouse (BW) system to SAP HANA®. SAP BW is a mission-critical system that supports statutory and management financial reporting, consolidations and business forecasting. The migration has made the availability of information during the monthly close process 30 percent to 70 percent faster with a greater level of stability.
Scalability and predictability. As Accenture continues to grow, the amount of data in its SAP system also grows. This data growth has the potential to place more burden on Accenture’s SAP system from a processing standpoint, which could significantly adversely impact the close team’s ability to meet its data and reporting availability service level objectives.
For this reason, Accenture’s technology approach also involves understanding the future demands of the business to make sure that Accenture can scale up the systems to meet that demand. The move of Accenture’s SAP production landscape to the Microsoft Azure public cloud and the power of SAP HANA facilitate the ability to scale and yielded substantial improvements in system performance.
After migrating to the cloud in early 2020, Accenture seamlessly expanded memory and disk capacity of its SAP S/4HANA environment from 6 to 12 terabytes a few months later—demonstrating the value of being in the cloud. Combining performance metrics, a forecast of Accenture’s business growth and a robust close schedule enables Accenture to plan for maintaining headroom at the service level objective.
Performing the financial close in Accenture’s early years posed difficulties for our people and placed excessive demands on support teams that led to employee engagement issues. Today, the situation is tremendously improved. The process is more automated and streamlined. Issue analysis is easier and faster. The execution steps that remain manual are only those that involve adding value through human ingenuity, mainly analyzing exceptions and results. The financial close team gained notable contingency as well. Instead of compressing an already short close process even further, however, the team decided to keep the close schedule as is to support a better work/life balance.
The strong foundation the financial close team has laid in terms of organization, processes and technology enables it to be proactive and perform the financial close process faster and more predictably than in the past. Accenture today can close its books in four days at the country level, in five days globally, and in two days to deliver pre-close management —what business leaders consider world class.
Accenture also has greater flexibility than in the past to make changes to its close schedule in a short time frame. This capability was put to the test during the initial months of the COVID-19 pandemic. The financial close team made two changes to the close schedule: the first was giving Accenture client teams an additional day to recognize revenues and the second was accelerating days 4 and 5 . In the past, initiating such changes could not have happened. Today, it is not only possible, but happens seamlessly and successfully among the participants.
As Accenture has grown, it continues to do more in shorter time frames—doing things better, faster and more cost effectively. To maintain an efficient steady state, however, takes concerted dedication around this area and continuous improvement. Accenture continues to focus on performance tuning, data archiving, infrastructure upgrades and other ways in which to further enhance its close capabilities as it rethinks ways to lead in the New.
Speed. Fast business decision making, optimized technology and appropriate staffing enable speed in closing the books—and importantly, speed while at the same time producing quality data. Fewer errors during processing rather than after means IT spends less time looking for and correcting processing issues. This advantage contributes to generating quality data and getting data to users faster. Improved efficiency overall translates into lower costs.
Quality. Quality remains paramount, and quality data can be made available sooner than in the past. Process rigor, skilled teams and robust tools enable efficient output with fewer issues, reducing cost and time spent in the close process. Over the past 10 years, for example, the number of critical close issues has dropped by more than 75 percent.
Predictability. Through industrialized processes and governance rigor in the close schedule, Accenture enables predictability of data and report availability for its business leaders. The close team now operates to a predictable schedule that drives stability in operations and release planning.
Flexibility. Flexibility is achieved through process rigor, identified tasks and well-defined interdependencies encompassed in a comprehensive toolset—all enabling the ability to be in control of the close schedule. For example, it is possible to start and stop the close at any time, making it feasible to respond to sudden requirements such as the need to extend the global close for additional postings, or to accelerate the quarter close to accommodate a holiday period.
Scalability. Understanding Accenture’s future growth and having the right technology strategy headroom drives an action plan to address service level objectives two years out. The technology strategy supports Accenture’s business growth direction without jeopardizing management expectations.
Automation. The digitization initiative enabled much automation into the close process, reduced detailed efforts of support teams for redirection to more value-added tasks and improved real-time status contributing to a faster, flexible and more reliable financial close. The new reporting and execution software also helps teams better manage work/life balance.