I had an opportunity to meet with Dr. Oliver Falk, CFO of Klöckner Metals Europe, to learn how Klöckner’s finance team is redefining the steel industry.
The steel market has experienced its share of challenges over the last decade. Back in 2008, it suffered a crippling crisis of falling prices and shrinking creditor confidence. And for steel companies, thriving in this climate required unprecedented ingenuity and reinvention. To safeguard themselves from such turmoil, companies such as Klöckner & Co. have maintained this mindset as they take on digital transformation.
Operating across 200 locations in 14 countries and serving more than 140,000 customers, Klöckner is one of the largest producer-independent distributors of steel and metal products and one of the leading steel service center companies worldwide. Its 9,200 employees generate more than €6 billion in annual sales. To maintain its industry leadership, the distributor quickly realized that it needed to ride the wave of digital transformation that is happening in the market and beyond to not get “Uber-ized” with a new market entrant running a next-generation business model.
“We have to redefine our business model. And one of the primary targets is to set up an open digital industry platform,” said Oliver Falk, CFO of Klöckner Metals Europe (which represents a significant share of Klöckner’s revenues).
Klöckner’s sales and operations teams were especially interested in this effort because it meant an opportunity to receive data and insights faster and more often. And of course, not only did they want numbers, but they also wanted to know the story behind them.
For its finance area, this demand spotlighted a need for new requirements, especially for controlling. Although the role of the CFO has always been important for Klöckner, “it might become more important. That’s because the knowledge of data and the ability to analyze that information to gain proper business insights makes the CFO even more requested than before,” Falk stated.
Looking for more consistent data based on a single source of truth, and the possibility to analyze data every second, Klöckner found a perfect match with SAP.
Thanks to its implementation of the SAP HANA platform, the response time for major transactions is now five times faster than before. The number of clicks and time needed to conduct postings are significantly reduced, resulting in a much easier and more efficient way of working. In fact, incoming payments and invoices are processed automatically. More important, costs related to accounting activities continue to shrink as Klöckner becomes more efficient.
“Live data gives us the opportunity to take a critical look at the business at any time. We do not need to wait until the month’s end and monthly closing. We can analyze data on request every time. And since the data does not need to be reconciled between different modules as it is residing in the single unified ledger, the quality of the data is significantly improved,” said Falk. “Implementing SAP HANA-based financial management was a big step to becoming a live business.”
To learn more from Oliver Falk and Klöckner, check out this video.
For more insights from other organizations on the benefits of the latest technologies, download the infographic and read the report, “Making the Business Case: Real CFOs Discuss the Benefits of SAP S/4HANA Finance.”