"SAP Group Reporting is a stroke of luck for us"

Anja Schoeck is Senior Director Finance Innovation, Payroll & Travel at Adtran. Thomas Pasquale is Managing Director at GAMBIT Consulting.

Thomas Pasquale: Anja, on September 1, 2023, ADVA went live with Finance for Group Reporting and previously with SAP Central Finance. How did you experience the days leading up to the go-live?

Anja Schoeck: The days leading up to such a go-live are always particularly exciting and stressful. But in the end, everything worked out as we had hoped and as we had planned and prepared together. Now I'm happy that everything is going well.

Thomas Pasquale: But let's start at the beginning. Can you briefly tell us how it all started? Why did you choose Group Reporting and Central Finance?

Anja Schoeck: It all started with a merger. ADVA was acquired by the Adtran Group in mid-2022. Adtran is an American telecommunications group. Unlike is often the case, however, we are not moving into the parent company's systems as a new subsidiary, but the parent company is moving into our SAP ECC system and also into our new consolidation solution SAP Group Reporting.

Thomas Pasquale: When we held our first talks with you in mid-2021, we didn't know anything about this acquisition. That's why we didn't really understand at first why you wanted to introduce Group Reporting as a stand-alone solution before the move to SAP S/4HANA. You wouldn't have been able to take advantage of all the benefits on your own.

Anja Schoeck: Yes. I remember it well. The takeover was still secret at the time - due to our stock market listing. It must have sounded strange that we at ADVA said: Dear GAMBIT, we already have a functioning consolidation tool, but now we still want to set up a new consolidation tool with Group Reporting. We already knew that we would be consolidating together with a consolidation solution in the future. We therefore need a tool that enables us to meet the various reporting standards and reporting requirements, for example. US GAAP, for example, was new to us.

Thomas Pasquale: How did you want to implement the joint consolidation?

Anja Schoeck: Initially, we wanted to solve this using a balance approach. In other words, we planned to simply load the balances of all Group companies into Group Reporting. But then we realized that wasn't enough. Drilling down to the accounting data of the Group companies, for example, was not possible with this balance approach. We therefore first reconsidered what we really needed and could implement. Following a recommendation from you, we then examined together in a detailed pre-study how SAP Central Finance could help us here. This gave us the necessary clarity.

Thomas Pasquale: Initially, we also suggested that we go straight to SAP S/4HANA with a greenfield approach. But we didn't know about the takeover at the time.

Anja Schoeck: That's right. But this change simply has to wait due to the takeover. First we have to complete the parent company's move to our SAP ECC system.

Thomas Pasquale: SAP Central Finance then proved to be a suitable way of mapping the many requirements that arose from the takeover.

Anja Schoeck: That's right. US GAAP was just one thing. The parent company also had various other requirements for mapping aspects such as inventory valuations, group currencies or functional currencies. SAP Central Finance was the only solution to solve all of this. We already suspected this beforehand, and the pre-study clearly confirmed it. Above all, with this preliminary study we had a reasonable roadmap and a clear timeline and were able to get started.

Thomas Pasquale: "Finance first" is the keyword here.

Anja Schoeck: As I said, we have not yet been able to switch completely to SAP S/4HANA. But what we have been able to do is take the first step in this direction with Central Finance.

Thomas Pasquale: SAP Central Finance is based on SAP S/4HANA and is basically an intermediary between various SAP or non-SAP systems and SAP S/4HANA.

Anja Schoeck: Yes, all documents are replicated in real time to a new SAP S/4HANA target system via Central Finance. And not only that, the documents are automatically adapted and harmonized to our new target organization. Finance and Controlling are therefore already in SAP S/4HANA, so to speak. Many companies are unable to switch to SAP S/4HANA in a single step due to the complexity of their own system landscape. In my view, this "Finance First" approach is an extremely good solution. And it now also enables us to use Group Reporting as an integrated solution and thus process accounting documents directly from the Group's finance department.

Thomas Pasquale: That was also quite time-critical for you, wasn't it?

Anja Schoeck: We had a strict timeline because we had to deliver the joint financial statements on time. With Central Finance and Group Reporting, for example, we can now really meet all the requirements for clean US GAAP reporting. For the timeline we had set ourselves, the two solutions are therefore a real stroke of luck!

Thomas Pasquale: It was certainly also helpful that you got to know working in the SAP S/4HANA system through the approach with Central Finance, wasn't it?

Anja Schoeck: Yes, it was very important for our colleagues from Finance, for example, to see and experience during all the tests that their world will not change completely after the switch to SAP S/4HANA. Not everything is solved directly via apps. There's a lot that can be done, but it's not a must. I had also only ever heard about SAP S/4HANA before, but had never seen it - and I thought it was a great insight. It's clear that a project like this is always a change project. Change is part of it, but it has to be shaped. It was and is important to us to get people on board at an early stage, involve them and convince them! And this "look into the new system" was an important building block.

Thomas Pasquale: And all of that with a high level of professionalism in this project.

Anja Schoeck: That's right. These insights, but above all the resource and roadmap planning, are just one thing. At the same time, the technical aspects of our project were extremely demanding. The various accounting regulations such as US GAAP, IFRS and, of course, the German Commercial Code, the functional currencies, the ledger issues. It has been and remains very important to engage in an intensive exchange with the parent company and you as an SAP partner on these topics.

Thomas Pasquale: Anja, what would you personally recommend to other companies interested in Group Reporting or SAP Central Finance?

Anja Schoeck: Use all the options available to you to find out more and talk to people who really know their stuff. When I think about the actual implementation, I need answers to these questions: Is there a reliable roadmap and sensible resource planning? Is everyone on board and well informed, i.e. both IT and the specialist departments? And most importantly, do the company's stakeholders support the project? Anyone who doesn't answer yes three times here still has work to do! Last but not least: Good and trusting cooperation with a project partner - with lots of communication, lots of transparency, lots of expertise, but above all with good humor! Everything is given at GAMBIT!

Thomas Pasquale: Thank you for the kind words and the interview, Anja!

ADVA Optical Networking SE (today: Adtran Networks SE) is a multinational provider of telecommunications equipment, in particular for fiber-based transmission technology. In 2022, the ADVA Group generated consolidated annual sales of 712 million euros. According to the company, ADVA Optical Networking's solutions are used by more than 250 network operators and over 10,000 companies around the world. The American parent company Adtran acquired ADVA in 2022. ADVA has been operating as Adtran Networks SE since June 2023.