Finance Summit: Transformation Through Innovation
Digitalization at Bertelsmann affects the finance department at Group, division and company level as well: 110 top executives from the finance department recently met to discuss how new technologies influence or will in future influence work processes, and how Bertelsmann can take advantage of this development. At the invitation of CFO Bernd Hirsch, they met in Berlin for the “Finance Summit 2017” under the motto “Transformation through Innovation.”
Digital transformation is one of the core elements of the Bertelsmann strategy. Digital businesses already account for a growing share of revenues, and new technologies are being used for more and more work processes, making them faster, more effective, and more future-proof. The diverse tasks of the finance department at Group, division and company level are also subject to ongoing technological transformation. A transformation that needs to be actively managed so that Bertelsmann can continue to remain successful in the global competition. Against this backdrop, some 110 executives from the finance department of all divisions from 17 countries met upon the invitation of Bertelsmann CFO Bernd Hirsch for the “Finance Summit” at Bertelsmann’s Berlin premises – accompanied and supported by Bertelsmann University. Under the heading “Transformation through Innovation,” they spent one-and-a-half days talking about the opportunities and challenges that arise from the transformation to digital – besides the ones arising from changes in the political environment – for Bertelsmann's finance community. Their conclusion: the work processes in finance need to become more agile and innovative. In workshops called “Fin Labs,” the Finance Summit participants were able to find out what this means for them and which technologies can support them. Of course, the participants also took the opportunity to interact and to strengthen their network.
“High agility is the key factor”
“The work all of you do in your companies every day ensure that our processes work, and that the transformation process initiated at Bertelsmann can be implemented. Nevertheless, it is of great importance that, as a 'finance community', we address the question of how we can adapt our work to new developments and mutually benefit from our experience in the process,” said Bernd Hirsch. However, he added, this is not a matter of issuing central specifications. Instead, opportunities should be identified and exploited through mutual exchange. All in all, permanent change is needed: “High agility is the key factor for the success of our work, which in turn supports Bertelsmann as a whole in implementing its strategy,” emphasized Bernd Hirsch.
In his speech, the CFO once again summed up what Bertelsmann has already achieved in recent years. The Group’s portfolio of companies, with its eight divisions in the three revenue mainstays Media, Services, and Education – more diversified and internationalized than it was in the past – is now clearly focused on growth businesses, which already account for nearly a third of all revenues, while there are hardly and structurally declining businesses left. Moreover, the revenue share of the digital activities is increasing year by year. “Practically all businesses are affected by the transformation to digital,” he noted. Now the idea is to even better monetize the growing digital activities. All in all, he said, Bertelsmann is on a clear growth and profitability path.
Bernd Hirsch described to his listeners the economic and political challenges that Bertelsmann currently faces – and then turned to the aspect to which the Finance Summit was dedicated: technological change. From the analysis of big data to process automation, from database-driven networks to artificial intelligence: there are a whole array of new technologies that have great disruptive potential, meaning they can have a really significant impact on the businesses in the medium term. Hirsch said that the technology corporations that have arisen over the past 15 years clearly show how greatly they have come to influence our everyday lives. “We can benefit from these developments,” said the CFO, “if we prepare thoroughly for change, and seize our opportunities.”
At the same time, it is necessary to expand skills and put new innovative technologies to use in practice, so as to redesign work processes. “A successful transformation depends not on our budget, but on our mindset,” the CFO told the Finance Summit participants. “This makes your task all the more important: You must acknowledge the need for transformation and act as its ambassador in your department, to be able to win over and motivate your employees.”
Leveraging the Bertelsmann advantage
Steven Ehrenhalt from the international auditing and consulting company Deloitte went on to explain, in his presentation, how much the financial world has already developed and in what direction it is likely to continue to develop. Based on the latest technological developments, he outlined the skills that will determine the financial organization of businesses – and thus their overall commercial success – in the future. Ehrenhalt said it is already evident that repetitive, simple tasks are increasingly being replaced by automated processes ("Robotic Process Automation"). The same is true for chatbots, which can automatically answer queries in appropriate areas. The analysis of accumulated data can help to predict the future behavior of customers (“predictive analytics”), while “blockchain” is laying the foundation for decentralized business processes without the need for intermediary institutions such as banks or public authorities. The Finance Summit participants would go on to take a closer look at these topics on the second day of the event. In the end, according to Steven Ehrenhalt, there would be major upheaval in the financial system, in which the expert believes not the strongest, but the most adaptable, will survive. For this reason, he also emphatically encouraged his listeners to cooperate more with each other. “Many technologies already exist in some units at your company – leverage this advantage,” he urged the Bertelsmann representatives.
After hearing about these theoretical findings, it was up to the participants of the Finance Summit to think specifically about the opportunities and challenges they need to deal with – decentralized and with regard to their respective businesses, as Bernd Hirsch quickly reiterated. “We need to begin with this now,” he said. And so, on both days, Bertelsmann's financial executives got together in smaller groups to compile theses and buzzwords, which the 15 members of the Finance Council then presented on the stage of the large conference hall at Bertelsmann Unter den Linden with Isabelle Körner, a TV presenter known from N-TV and RTL. The focus topics of the three “Fin Labs” were also covered: “Blockchain,” “Predictive Analytics,” and “Robotic Process Automation (RPA).” Blockchain is a database technology that allows a decentralized, direct digital linking of consumers and suppliers. Predictive Analytics is the Big Data-based prediction of future behavior as a basis for current decisions. And Robotic Process Automation, presented by Arvato Financial Solutions, is the software-controlled automation of business processes that is increasingly being applied in various industries –at Bertelsmann as elsewhere.
At the end of the event, Bernd Hirsch took the findings gained in the one-and-a-half days of the summit, and distilled from them an outlook and recommended actions. He said he sees an especially great need to build more skills and competencies in the new technologies. A cooperation platform to be set up as part of the follow-up to the Finance Summit could collect successful examples and the technologies used, and disseminate them to the Group. The Bertelsmann CFO expressly encouraged the Finance Summit participants to initiate pilot projects in their respective areas and to promote the necessary environment of innovation for applications in the finance realm.
“I am delighted by the excellent atmosphere and lively debate, which I believe will contribute to deepening cooperation,” said Bernd Hirsch, commenting with satisfaction on the Finance Summit. “I am sure that, together, we will be able to build and expand our digital competences, and use them to actively shape and support our businesses going forward.” (benet/mal)