The COVID-19 pandemic has highlighted the importance of business continuity. Millions of office workers worldwide shifted to working from home, in some cases literally overnight. The initial focus has rightly been on ensuring the safety and well-being of employees. As the world settles into a new rhythm, it’s also imperative to continue critical business operations under unprecedented conditions.
We had the opportunity to speak with Mike Neller, senior vice president, global controller and chief accounting officer at Aon plc. Aon is a global professional services firm, providing risk, retirement and health solutions, with 50,000 employees across 120 countries. In the midst of worldwide stay-at-home orders, Mike and his team closed the financial period remotely. Read on to learn how Aon delivered a fully remote financial close for the first time.
We have a six-day close process. The ledgers close in four days for most of the countries we operate in, and then we spend two days on consolidation and final reviews. When we started our journey with Workday, we were at an eight-day close, so we’ve reduced it by a couple of days. We could probably reduce it again by a full day, but we don't currently have the need, to be honest. It gives us time to work through any reconciling items and provide additional comfort on the accuracy of our financials.
For our largest geographies, we have been closing the books using Workday Financial Management for over a year. So it's business as usual for people. There's no learning curve any more. We have about 95% of our revenue flowing through Workday today, and we’ll be over 99% by the end of the year.
Our first quarter ended on 31 March and we typically begin our close process a few days before the balance sheet date. As COVID-19 required colleagues to work from home by mid-March, we were in a 100% virtual close when we began the process. We were all a little bit nervous because we didn't really know what to expect. I don't know anybody who's ever done a virtual close. Were we going to have issues? Was the system going to break down, and what happens if it does? Who do we talk to, and how do we get in touch with them?
Although we felt good about continuing to close the books on time, we laid out a contingency plan if the virtual close did not go as smoothly as we anticipated. In the end, our close went without a hitch – it was fantastic. It was quick and efficient. When you think about being in over 120 countries, that's a lot of people working to close a lot of sets of books. Everybody was able to manage it without any kind of delay and without any kind of inefficiencies. The team did an amazing job of staying connected to deliver on time, and we never had to use the contingency plan.
There's no way that that could have happened if we had 10 different systems; if we had systems that weren't as reliable and as effective as our Workday system. So Workday was a huge backbone and linchpin for our ability to be able to manage such an effective close, and something that I think our whole team has recognised and appreciated.
Despite all the changes – people being remote, doing lots of WebEx and Zoom calls – there weren’t any issues. In fact, Latin America had the quickest close ever. They were completely closed a day early and that's the first time that’s occurred.
Again, it’s all about the technology and our colleagues being able to know how to use it. If the technology doesn't work, it delays the close. We were going to have real problems if the technology didn’t work.
Without question. Workday provides us with a number of benefits, including automated workflow definitions for the journal entry review and approval process, the ability to attach all support materials for journals within Workday to efficiently process approvals, a mobile app for rapidly addressing tasks and drill-down capabilities within the system that allow for quick research and analysis.
Our company was built on hundreds of acquisitions. We have over 700 legal entities in 120 countries, so we are not a simple organisation. Moving from multiple legacy systems to a single system can be a daunting task, both from a capacity and cost perspective. However, after dedicating the right project team, it can be done economically with a very compelling ROIC once legacy systems are retired and productivity improves.
And although we couldn’t be happier with the performance of our Workday general ledger, the real game changer for us will be when we move our current planning and consolidation tools from our legacy systems onto Workday. In other words, getting to a single hub-and-spoke model – one source of truth – without all of the wasted time, effort and confusion of a linear close process with multiple systems that don’t always reconcile on the first try.
It will be the last mile of a long and challenging journey, but the pay-off, both economically and from a colleague satisfaction perspective, is well worth it.