A transforming experience

Finance seeks to achieve common processes, systems

BY ANNE EISELE

For most folks, balancing their checkbook every couple months is relatively simple. But imagine how tricky it would be if you were trying to reconcile more than a dozen general ledgers comprising thousands of different accounts with data input from hundreds of distinct information systems that use different charge lines and cost-accounting methods.

Earlier this year, Chief Financial Officer James Bell tasked his 8,700-person team with migrating to common Finance processes and systems wherever possible. Finance Transformation, as it's called, is a companywide drive to establish a common financial process and systems environment that reduces variation among Boeing business units and maximizes shared computing applications. The initiative aims to effectively collapse hundreds of disparate applications into a streamlined and interoperable architecture that speaks with a single voice and provides financial data faster, better and cheaper than today.

Finance's emphasis on commonality reflects market trends at Boeing business units. Integrated Defense Systems is helping its military customers' transformation for next-generation warfare by making the most of information technology and a common, open architecture to support precision and better, faster decision-making. Commercial Airplanes is helping its airline customers meet their need for greater efficiency, cost-savings and interoperability.

Spearheading the initiative is Rich Smoski, vice president for Finance Transformation. He oversaw similar integration efforts in Boeing's People organization. There he led implementation of a single, integrated payroll and human resources system that replaced 47 previous systems.

"The Finance Transformation vision is to achieve common execution of critical finance activities across Boeing and have processes and systems capable of supporting them more quickly, efficiently and cost-effectively than we do today," Smoski said.

Clearly, some Finance systems are unique because of differing business and customer requirements, (e.g. commercial vs. government). But by making common those that aren't, Smoski said, Finance can provide better and more timely data, facilitate more informed business decisions and improve company competitiveness. This also will allow Finance employees to spend less time mechanically entering data and more time performing value-added analysis.

The move to common Finance systems also is driven by business and regulatory imperatives. The current lack of operability delays closing, requires rework and manual data entry, and limits Finance staff mobility among Boeing's business units. It's also a big part of why it costs nearly 3 percent of the company's annual revenues, or $1.5 billion, to perform Finance at Boeing.

For the past four months, Smoski's team has reviewed Finance processes and systems, and created implementation plans to achieve commonality in five main areas over the next few years (see box above).

The first item to be tackled—a single, common chart of accounts—will be implemented by the end of the first quarter 2005, said Ken Fuegmann, director of Finance Transformation. Defining the common charge-line is expected to take the first half of next year, and it will be implemented in parallel with the common accounting system beginning in 2006. The common consolidation system should also be in place by 2006. And a common financial planning system will be partially implemented by the end of that year.

Additional integration may be added later. Some 50 to 75 percent of Finance systems could become common by 2008, but that decision will be driven by what's best for the enterprise, Fuegmann said.

While final budget and resource needs are still being hammered out, a ballpark cost estimate for Finance Transformation is $750 million over four years, Smoski said.

The return on this investment will be reduced Finance costs over the long term. That, and an uncommonly better way of doing Finance at Boeing.

anne.f.eisele@boeing.com