Achmea transforms financial reporting with SAP and IBM

Published on 11 Mar 2010

Validated on 03 Dec 2013

"IBM Global Business Services did a tremendous job creating and completing the change management program, supplying the people and skills necessary to explain what was happening, train the users and complete a successful technical implementation." - René Collé, Director of Financial Services, Achmea

Customer:
Achmea

Industry:
Insurance

Deployment country:
Netherlands

Solution:
Business Integration, Enterprise Resource Planning, Information Infrastructure, Optimizing IT, Optimizing IT

IBM Business Partner:
SAP

Overview

Achmea is the largest insurance company in The Netherlands, with 22,000 employees serving 4.7 million customers, generating a turnover of 14 billion Euros.

Business need:
Dutch insurance giant Achmea has grown rapidly through acquisition, and has inherited a variety of specialist financial services and general business management systems. Producing accurate accounting information involved complex and laborious data extraction from multiple systems, a slow process which delayed group-wide reporting.

Solution:
Achmea chose to standardize the entire group’s activities on SAP Business Suite applications, embedding best practices, integrated workflows and advanced analysis tools within the company. The first step was to deploy the SAP General Ledger and SAP Business Consolidation components to connect and integrate all Achmea divisions and other operating companies, with plans to introduce additional components later.

Benefits:
The elimination of manual data collection processes has reduced the full-time equivalent staffing levels by 30 percent within certain financial teams; month-end group financial reporting is based on accurate and reliable data, and can be completed within 14 days, an eight-day improvement. Timely and high-quality data allows executives to identify inefficiencies, highlight profitable opportunities and meet regulatory obligations with auditable statements of Achmea’s financial position.

Case Study

Achmea is the largest insurance company in The Netherlands, with 22,000 employees serving 4.7 million customers, generating a turnover of 14 billion Euros.

The group stems from the merger between Interpolis and the ‘old’ Achmea, which itself grew from mergers with Zilveren Kruis, Avéro and Centraal Beheer. The new Achmea consists of six business divisions, with group-wide shared central services, such as IT, group finance and compliance.

René Collé, Director of Financial Services, describes the inherited difficulties in a business built through mergers: “For example, insurance premium income was handled differently by each unit’s accounting systems, recognized at different points in the payment cycle, or held in a proprietary format. When we came to consolidate group-wide reports we found that in some cases financial calculations such as deduction of commission had already been completed, while in other cases we needed to extract that data too and run the calculation externally.

“Accurate month-end closing is essential, so that we can monitor financial performance, meet our regulatory obligations and provide the right figures to customers. It was very important to eliminate our information difficulties and accelerate information flow throughout the business.”

Wieger Wagenaar, Group Finance Director, remarks, “We had followed a fleet philosophy, with each business unit sailing on its own course. There had never been a necessity to integrate the general ledgers or multiple collections and disbursement systems. Faced with new group reporting and compliance requirements, our approach had to change, and we started the search for an integrated solution.”

Embedding best practice
Interpolis was using a range of SAP ERP applications at the time of the merger with Achmea, and managers attributed a great deal of the company’s success to the use of these solutions as a financial and business management platform. Many of the benefits were derived from standardized processes and workflows, embedded as best practices within the SAP software.

“Our multiple processes, ways of working and business cultures were holding us back,” remarks René Collé. “One of the major appeals of the SAP methodology is the insistence on standardization, which is key to success. The experience at Interpolis demonstrated the quality of data and the performance improvements possible, and we therefore chose to implement SAP applications across all of Achmea.”

Achmea selected SAP ERP applications, combined with the SAP for Insurance solution. The goal was to have of all of the finance and accounting departments sharing the same SAP General Ledger, to include cost accounting, inter-company accounting, budgets and reporting. By using the same core software in all its business units, Achmea would be able to standardize these processes, reporting standards and financial data, taking great strides towards its goal of unified operations.

To support this major transition program, the company selected IBM Global Business Services to assist with project scoping, defining the workflows, change management processes and, finally, the technology requirements and implementation.

“We needed to find a partner organization that could involve all our stakeholders in different divisions within Achmea, both the central service organizations and within the operating units,” says René Collé. “IBM Global Business Services was the most qualified partner, with a very high reputation in the insurance sector combined with excellent knowledge of SAP. Additionally, IBM had the ability to handle the scale, covering Achmea departments in five Dutch cities, and merging 17 separate general ledgers.”

Creating a new corporate culture
IBM Global Business Services recommended a focused project that would be managed in stages, first by implementing the General Ledger and moving on to additional components at a later date. To complete the program across the different business units, each of which was used to its own way of working, a major task was to create a new group-wide culture.

“A tremendous job was done by IBM Global Business Services in creating and completing the change management program,” says René Collé, “supplying the people and skills necessary to explain what was happening, train the users and complete a successful technical implementation. With assistance from IBM, collectively we were able to gain the involvement and commitment of both the central service teams in group finance and the operational teams in each business unit, to ensure that the investment would truly be worthwhile.”

The Achmea senior management team authorized the SAP program on the basis of predicted savings, benchmarked against other SAP users in the insurance sector and using full-time employee (FTE) equivalents as the unit of measure, setting a target of 40 percent efficiency improvements.

“We established objectives based on the reduction in the number of FTEs. With almost 1,400 people working in financial processes across Achmea, of which some 750 were in group finance, we estimated savings equivalent to 250 FTEs. This would be a result of the automation provided by SAP, which would eliminate many manual tasks, and to related improvements in business processes and structure.”

Technical Director Eric van Mierlo adds, “The results have been achieved with the implementation of SAP, the introduction of a Six Sigma program, and the creation of a technical infrastructure that allows us to continue optimizing our business, greatly reducing the costs of doing business and helping Achmea to survive and thrive.”

As a result of the implementation, month-end group financial reporting can now be completed within 14 days – eight days faster than before. In the near future, the company expects to reduce this further, to just ten days.

Cutting complexity to gain clarity
The introduction of SAP applications was in some senses a tactical move that solved the immediate, pressing need to provide integrated reporting facilities. Subsequently, it has opened up genuine strategic benefits.

Wieger Wagenaar comments, “With SAP, we now have common structures and processes across our general ledgers, with a single definition of an insurance premium across all the businesses. We no longer need to build unique interfaces to multiple general ledgers, and we know precisely the data, format and delivery requirements of the SAP general ledger.

“We are able to take the accurate and timely information from the single general ledger and use SAP NetWeaver Business Warehouse to analyze and understand our operations in new ways. For example, in the past it was possible for several divisions to claim the same revenue as ‘theirs,’ or insist that particular costs should be allocated elsewhere. With the shared general ledger data, analysis in SAP NetWeaver BW reveals exactly where the revenue should be recognized and where the costs were generated. We can take the same data and analyze it by division, type of business or legal entity, which helps understand our profit and loss in greater detail and make better-informed decisions.”

For the forthcoming Solvency II regulations, governing EU-wide capital requirements and risk management standards, the consolidation to the group-wide general ledger will also make Achmea more confident that it is fully meeting its compliance requirements.
“The single source of reliable data means that we will be able to generate accurate reports no matter how we are organized,” says Wieger Wagenaar. “The program led by IBM Global Business Services is helping Achmea transform itself into a fully integrated enterprise, able to respond to future regulatory, business and market challenges.”

René Collé concludes, “Working with IBM Global Business Services, Achmea is able to accelerate its wide-ranging transformation program. Implementing the new SAP solutions has been rapid and cost-effective, and Achmea is now in a position to fulfil its reporting, compliance and management objectives.”

Components

IBM products and services that were used in this case study.

Service:
IBM-SAP Alliance, IBM Global Business Services

Legal Information

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