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CFO Magazine - H.Essers - Best Finance team of the year

H.Essers, the logistics service provider with roots in Genk, has a financial department of approximately 54 employees. During three years, the department has worked hard to give the service a thorough 'upgrade' , headed by CFO Koenraad Rogiers: from a mere figure -processing unit to a true business partner for all operational units in the company. And that transformation is now bearing results: greater financial awareness throughout the company , streamlining of all activities and a saving for dessert !
It is not easy to drive around without encountering trucks of H.Essers on our roads. The logistics company was founded in 1928 by Henri Essers. Since 2000, all shares are owned by Noël Essers. H.Essers currently has 16 sites in Belgium, 32 in eleven countries (mainly in Western and Eastern Europe). The company specializes not only in transport (the company has 1.250 trucks, daily driven around the globe), but develops in-house systems which add value during storage (think packing chocolates). And value-added logistics is critical because the gross (and net) margins are traditionally very low. This unique focus on ICT and flexibility gives the company year after year brisk growth shoots. The organic growth of H.Essers annually averages six to seven percent. The headquarters is located in Genk: a unique base in the axl Netherlands - Belgium - Germany. In 2007 H.Essers was named Company of the Year, and earlier this year the company won even the Export Lion awarded by FIT.

Greenfield exercise
The financial department of a logistics company has traditionally been a complex issue. There are massive amounts of transactions happening. Add to that the international dimension and the many different currencies, and you understand that working in finance is hard. And yet Koenraad Rogiers CFO H.Essers, felt that it should be better. "We have more than fifty financial staff, and in 2011 was time to rethink our strategic mission. We held a greenfield exercise: how can wedeliver more with our team more than just what we are required by law." That would lead to a total transformation of the finance department. At the core of this transformation is the determination of the strengths of the finance team. Rogiers: "We have three advantages: people, information and know-how. Add those three together, and then you realize that your finance team can truly become a real business partner for all operational units within the business group. "Regular tasks such as booking invoices, must give way to more strategically targeted support to other departments. Just how do you go about it? Rogiers has a complex -looking diagram drawn on the board in his office. It should demonstrate how the transformation process from purely executive accounting operations towards full-fledged business partner was accomplished. Rogiers: "We have begun to standardize all processes that existed in our forty legal entities. We have put all the processes on a single platform. Believe me, that alone took a lot of change management. But it was needed to generate room for more business-related activities." 
Better reporting
Next we looked at what was needed in terms of tooling. In 2012 we developed a web application for credit management: an easy decision, a first ' quick win'. As ERP software MySQL was preserved, and on top of that a data warehouse was installed. Rogiers sees that data warehouse as the second quick win "that allows us to no longer have to determine whether there are errors in the bookings done a posteriori. Thanks to the data warehouse, we get daily feedback on those bookings, before the closing date. That is a proactive monitoring." All this immediately leads to a first clear measurable result of conversion: reporting can happen much faster. Rogiers: "as we previously reported at six weeks after the end of each quarter, we now deliver ten days after the end of each month. The big strategic advantage is that the Board of Directors, as well as the Audit Committee, can come together quickly and if necessary decide on strategic adjustments. As joint planning tool, Cognos TM1 was reactivated. Rogiers: "We already had TM1, but hardly used it. It was like a truck in which we only transported one shoe box, without exploiting its fullotential." In 2013, Cognos Controller was selected for the consolidation process. Rogiers is quite happy with that choice, "you should know that we previously worked with Excel spreadsheets. That was not convenient, especially if you know that we use eight different currencies."

150 years of expertise
What makes the case of H.Essers strong, is the conscious choice to achieve. Rogiers, who is also a computer scientist next to economist, calls it a conscious choice. "Nearly three years we have worked with fifty employees on this transformation from accountant to business partner. In that way we have built up internal expertise of about 150 years. Something like that is priceless. That knowledge is now so evident that I can focus on an acquisition for three months without losing the role of business partner as our entire information system is running as usual. Rogiers likes to emphasize the importance of the transformation towards a business partner. "We are encouraging all of our operational departments to start thinking about ways to add value. Finance has gone completely to operations. It is important to realize that we are have a low profit per truck per day. It is therefore important that everyone is involved in the quest for value creation. By making the operational units financially aware, they're there now thinking more in terms of cash flow." H.Essers has its own service center installed. In Moldova twenty employees assist all operations in the group. This center has been active since 2011, where six accountants do all physical payments. Rogiers stressed that it was a conscious decision not to outsource the service center as H.Essers can retain full control.
Flexibility
Within the department, the transformation process caused a big evolution. The employees are disengaged from their old roles. That requires a lot of adaptability and flexibility, we hear from the CFO. "Both externally and internally many people were afraid of the change. That is a natural reflex. Still, I am proud that during our entire transformation nobody left the company. We have not lost anyone in this rather difficult process! Everyone is gradually evolving, both the company and our department. I am very proud of the agility and flexibility of our people. At the same time the cost of our department dropped from 0.79 % to 0.70 % of our sales. With a turnover of more than EUR 400 million those are significant savings. Other departments are now being encouraged to achieve the same efficiency." The story of H.Essers reads like a difficult exercise: This case had a big impact in terms of ICT systems and in terms of streamlining processes through the 40 entities, requiring a lot of flexibility of the people in the company. But the results are measurable, visible and tangible. Therefore CFO Rogiers thinks his finance team deserves "The Best Finance Team trophy". Somewhat surprisingly he concludes: "They do not really need to get that title because they are already the best finance team. Enduring such a process without people leaving, proves how flexible they are and how well they were able to transform themselves throughout the process. And that's harder than passively watching from the sideline. I think this is a very prime example of change management."

Post Date

Lundi 17 mars 2014

Technologies