Digital journey towards Finance 4.0 – a talk with OMV CFO Reinhard Florey
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Digitalization – probably the buzzword of the century. And yet a concept that is generally hard to grasp, as seemingly everybody perceives a different connotation to it. Nonetheless, it is probably not associated with finance all too often. OMV CFO Reinhard Florey talks to us about OMV’s digital journey and how to balance ‘quick wins’ with a long-term journey towards Finance 4.0.
What Finance has got to do with digitalization
“The way into digital reality – leaving aside illusions” – this was the title of OMV CFO Reinhard Florey’s keynote speech at this year’s Controller Days, organized by the Vienna Controller Institut. The first question that came to our minds when hearing about it was “What has Finance got to do with digitalization?”. Very broadly speaking, the main aim of digitalization is to decrease complexity and increase automation. In OMV’s case the application span starts with the automation of rule-based processes, but structured and unstructured data are being processed in order to provide relevant information for decision-making. In this context, machine learning and advanced analytics are used to provide information more rapidly. Ultimately, in the best case scenario, digital technologies enable an increase in the efficiency, quality and performance of finance processes.
A 4-step path leading OMV to Finance 4.0
An agile approach has been adopted to introduce digital technologies at OMV. But what does that mean? Dedicated teams have identified a four-step path ranging from exploring technologies to scaling them. “In a first step, various technologies are explored in order to keep up with the information available on the development of tools and market stories”, says Mr. Florey. Simultaneously, a candidate pipeline is set up to balance business opportunities with a continuously growing overview of business requirements for automation and digitalization. In a next step, our colleagues test the newly identified technology in pilots and develop experiences on specific use cases. The last step is about ensuring successful pilots are rolled out throughout the organization, “The idea is to support fast delivery of results whilst at the same time creating space for smart scaling up”, adds Mr. Florey.
At OMV, we have identified the cornerstones of our digital path: from process automation to machine learning and artificial intelligence. Nevertheless, these are not ‘quick win’ projects – internal readiness in terms of processes, systems and organization are key elements for success. Maturity of available solutions in an enterprise environment has to be considered as well. Hence the key is to define the right level of ambition: we have to focus on the benefits which we can derive today, whilst keeping in mind, we are investing in a long-term journey.
Reinhard Florey, CFO and Member of the OMV Executive Board
Change management and training are critical for the success of SAP, RPA and AI
When first confronted with the abbreviations SAP, RPA and AI, it might all sound very complicated to someone not working in this area, but Mr. Florey was happy to shed some light. SAP is a software that supports various business processes in a company, ranging from accounting, controlling and sales to procurement, personnel management and many more. In the context of digitalization, OMV is currently running the SAP S/4HANA project which should increase business value by providing real time, digital, big data and analytics functionalities based on harmonized data and processes.
“RPA stands for Robotic Process Automation. It was successfully launched at OMV in 2018 with a central team driving the project in strong collaboration with IT and business. Around 40 activities have already been automated with RPA focused on reducing bottlenecks and eliminating repetitive tasks,” explains Mr. Florey. Even more automation ideas are currently being collected. RPA helps to increase efficiency in three ways. It supports in redirecting resources towards more value-adding activities, it eliminates process bottlenecks and utilizes 24/7 availability of robots. However, RPA cannot be regarded as a “quick win” project since it requires time and the effort of various contributors. “The adoption of RPA is challenging due to its interaction with an existing IT ecosystem. Furthermore, change management is critical for success. Some low-hanging fruits include the automation of repetitive activities in the financial closng process”, says Mr. Florey.
From “quick wins” to a long-term journey, it is about defining the right level of ambition
Automation and Artificial Intelligence (AI) form an integral part of the digital agenda of OMV Finance. Both clearly have benefits at present, but even more so in the long term. “It is critical to have realistic expectations during the initial adoption. Which is why defining the right level of ambition is crucial. At OMV we are taking an evolutionary rather than a revolutionary approach”, explains Mr. Florey. Short term, the focus is to benefit from “quick wins”. Looking at the long-term journey, new technologies require substantial time and effort before reaching internal maturity, which is why digital roles and competencies have to be developed within the enterprise. Here is where training of the workforce comes into play. No matter how digital, at the end of the day it is people taking decisions based on the information provided – “Allowing our people to concentrate on the interpretation of data and making more educated decisions on this basis is what digitalization in Finance is all about in the end”, concludes Mr. Florey.