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S/4HANA Finance brings data consolidation to major insurer

A finance leader at New York Life explains how S/4HANA Finance helps manage and analyze data on $528 billion in assets, and the key role of change management in a successful project.

ORLANDO, Fla. -- SAP has positioned S/4HANA Finance (formerly Simple Finance) as the logical starting point for...

migrating to its next-generation ERP platform, S/4HANA. At New York Life Insurance Company, S/4HANA Finance has been the primary tool in One Finance, an ongoing, three-year effort to consolidate the insurer's accounting and finance functions and improve data access and analytics.

At the Sapphire Now 2016 user conference, SearchSAP sat down with Raymond Carney, a vice president at the 171-year-old insurance company, to discuss progress on the S/4HANA implementation. Carney has spent his entire 30 years at New York Life in finance jobs and calls himself a "fish out of water" when it comes to the IT aspects of financial management.

A Fortune 100 company, New York Life has $528 billion in assets under management and is the largest mutual insurance company in the U.S., according to Fortune magazine.

What is the One Finance initiative? When did it start, and why did you do it?

Raymond CarneyRaymond Carney

Raymond Carney: We really kicked it off in 2013, and at that point it was more [CFO John Fleurant's] own vision. Over the course of the last 15 years when we first implemented SAP as our general ledger, we really became an organization that did a lot of things in [Microsoft] Excel and home-grown databases. We created a lot of stuff offline and then we had to try and manage that and get after it and consolidate that. It was a big hurdle.

We wanted to be able to get at data easier and faster so we could become less of a data steward or data collector and more telling a story. We knew we needed the right tools to help us get there.

We created a better reporting platform, so instead of everyone doing things on their own, we have standard reports that the entire organization is using, so we know they are all using the same data. They get more transparency, more consistency.

Since you had the business vision, did you have an IT partner?

Carney: Yes, I was able to pull some of our best people out of our IT area to work very closely with me, and they worked closely with Deloitte, [which] was our partner in this. Deloitte [provided] the experts, but they transferred that knowledge.

I was able to make the business decisions and set the business vision, but I had this great support team on the IT side.

What does New York Life have on S/4HANA Finance, and what isn't on it?

Carney: The main thing that's on S/4HANA is our ledger, our budget and planning system, BPC [business planning and consolidation], and our reporting, which comes in [SAP BusinessObjects Analysis, edition for Microsoft Office]. By having that as an integrated system, it makes our reporting easy, [and] it makes it that when we're doing budgeting, it's right in line with how the actuals are produced.

With everyone using the same data now, the reconciliation process is going away.
Raymond Carneyvice president, New York Life Insurance Company

We do have a lot of other types of sources that produce reserves, our investments, [and] we account for our investments in a product that [SS&C Technologies] puts out. So we do have a lot of other systems that feed the ledger.

All of our hundreds of billions of dollars are in that [SS&C] system, and then that's interfaced to the ledger. We also have stood up [SAP] Insurance Analyzer, which is a sub-ledger, really, but we're just scratching the surface. We're starting now to feed some of that investment data into it, so we can really store the more granular data in the sub-ledger and then it just feeds into the ledger, and you can do reporting out of both.

If we can get the raw data into Insurance Analyzer, we might be able to do a better mortality study. Right now, we do those studies, but on a platform that's not SAP. It's one-offs.

Right now, there are probably 10 different reserve and mortality-type systems from our different products. [The goal is to] get it all in one place and be able to report out of there, and do analytics out of there. And the same thing with the investments ...  We want to do a treasury transformation as well.

Would that be something you could do within the SAP platform?

Carney: I believe so. That's maybe our next hurdle after this year. We have our HR, accounts payable, fixed assets now in [SAP] SuccessFactors. That went live before our ledger went live in July 2015.

How is using S/4HANA Finance requiring you to change your processes?

Carney: We knew we had to change our processes to work more effectively. This is a tool that's helping us do that -- processes around being more consistent with how we report, how we produce data. As I mentioned, we had a lot of disparate systems, so everyone was kind of working in their little silos. We want to have more of a One Finance mentality, a One Finance community as opposed to a bunch of little communities. Getting everything on the same platform, in a consistent, transparent way we think will help get us there.

What's another example of a true finance process that is affected by the move to S/4HANA Finance?

Carney: You would have multiple insurance businesses and investment businesses, and then corporate would have to bring it together.

It was a struggle because it was almost like they were speaking a different language. Now there's a real consistency. We know that the different business areas are using the same data that corporate is. There are fewer reconciliations.

With everyone using the same data now, the reconciliation process is going away, which is good, and the stories are being told earlier in a consistent manner.

Are there learning curves for people?

Carney: People are resistant to change, even if they don't think they are. That's been an interesting journey. We really reached out to the whole company. We wanted them to feel included. We said,  "Here's what we're doing: We're streamlining how you do business."

People were comfortable with what they were doing. Even though it was a convoluted process, it was their process.

A third of the people were totally accepting: They were like, "What took you so long?" They were really willing to change. Another third was downright resistant: "You guys are messing with my processes. You don't need to do this!" The [final] third was in the middle. I think they wanted to change ... but it was tough for them. They would say, "I'm all about change, as long as I get exactly what I have."

What change management and training processes are you putting in place?

Carney: I'm meeting consistently with the business areas [and saying], "OK, what do you guys need help with?" When we close our books on a quarterly basis, every day we meet in the morning. It's, "OK, what's working well, what isn't, where do you have roadblocks?" So we can attack those right away.

We have a series of post-mortems. It gives the businesses a forum to say, "OK, corporate's not forcing this new ledger and this new process down my throat. I have a say."

What is your advice to people who are thinking of migrating to S/4HANA Finance? Is there anything you would have done differently?

Carney: We probably did too much custom building. We were trying to get people exactly what they had in the past. I think we missed an opportunity to standardize stuff. Some of our allocations are too complicated even now.

Another lesson learned is more from a project point of view. If you're doing a project like this, you've got to make sure your best people are on the project in a full-time role. It's a struggle if you've got two jobs.

You have to own it as well. It's great that you have consultants that are very knowledgeable and can offer recommendations. But at the end of the day, you as the company have to own it. You have to make the decisions.

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