How Challenger Limited Accelerated Finance Transformation

Talent shortages. Market volatility. The demand for transparent environmental, social, and governance (ESG) data. These are just a few of the challenges businesses face as disruption remains the norm and new trends emerge.

For James Spurway, CFO of Challenger Bank, these challenges highlight the importance of delivering information quickly to stakeholders: “It’s vital that businesses today have access to timely information and can perform scenario modeling and stress testing while deploying resources in an efficient and prioritized manner.”

This is why James and the finance team at Challenger, a Sydney-based, ASX-listed investment management company with more than $96¹ billion in assets under management, were looking to accelerate their finance transformation journey. With nearly 300 entities, over 700 employees, and three core businesses, providing leaders key information quickly has a profound impact on Challenger’s continued growth.

Knowing that demands were only going to increase, Challenger’s forward-thinking finance team embarked on a transformation journey with the end goal of reducing time spent on manual tasks and processes.

“Our goal as a finance team is to spend more time supporting the business and its initiatives and less time on the process of reporting and closing out the month and year end,” said David Conley, Head of Reporting at Challenger.

By not settling for the way things have always been done, the finance team has become a strategic business partner for Challenger’s leaders.

“I’m elated to be a part of a team that has pushed the boundaries and questioned the status quo,” James said. “This mindset has transformed finance into a value-added business partner—assisting leaders in driving growth and strategy.”

A three-part approach to finance transformation

When the Challenger team set out to accelerate their finance transformation initiatives, they invested in technology to ignite change in three fundamental areas: strategic planning, the financial close, and reporting.

Streamlining strategic planning

First, Challenger conducted a deep dive into their strategic planning process. They determined they needed an adequate governance model to manage the process. In addition, they were looking to save time on the overall process, and needed technology that was purpose-built for budgeting and planning. With a new solution in place, the team were able to reduce time spent on the planning process by 50%.

Modernizing the financial close process

Finding an ERP system to replace their general ledger, which would no longer be supported by the vendor, was the next phase of the team’s finance transformation journey.

“This was a great opportunity to find a contemporary ERP the team could deploy to streamline the financial close process, enhance the data we capture for better insights, consolidate our systems, and set the finance team up for the future to continuously support business needs,” James said.

Gathering information to better understand the issues the team faced on a monthly basis during the close process, James discovered that nearly half of the team’s time was spent waiting on the system to refresh, extracting data, and posting manual journals.

“I knew that by selecting the right ERP, nearly 40% of people’s time would be given back to them,” James said.

Revolutionizing reporting

The final part of Challenger’s finance transformation journey was to find an integrated reporting solution that could help the team scale reporting processes: “This was a critical component to capitalize upon all the upstream efficiencies and system capabilities,” James said.

David agreed and was keen to find a solution that helped address the inefficiencies and risks inherent in manual reporting processes.

“Despite all the technological improvements we made and the benefits we realized, we were still preparing and providing the final reporting output in basic Microsoft products. It was an inefficient process,” David said.

Prior to implementing the Workiva platform, the majority of Challenger’s reporting was prepared in either Excel or Word, including its 150-page annual report.

“Every year during the year-end process, finance would fear a late change to the numbers, which would mean long nights manually updating the financial report, increasing the risk that something would be missed,” James said. “Workiva revolutionized this process. Reporting is now integrated with the general ledger and other source systems. Finance no longer fears that late change to the numbers.”

Finance transformation ‘best-of-breed’ tech stack

With three technology investments in place, the Challenger team has amplified efficiencies across their financial processes—giving them the opportunity to be more strategic in their roles.

“We now see the finance technology stack approaching best of breed. No longer do we have a spaghetti of systems and databases. We now have a simplified technology offering that provides end- to-end integration, making our finance processes more efficient while allowing us to put information into the hands of business leaders in a more timely manner,” James said.

And as Challenger continues to grow, the team now has scalable processes in place across the business, helping them keep up with increasing demands without increasing headcount.

“Despite business acquisitions and the significant growth of the business, headcount for the finance team has remained at the same level for the past decade,” James said. “This has only been achievable through the use of digital technology, which has fundamentally transformed our processes.”

Passing the transformation baton

In addition to the annual report, the team looked at improving other key year-end outputs such as financial statements and the analyst pack that are “highly critical documents to the business.”

With a true eye on transformation, the finance team also wanted to increase efficiency and accuracy throughout their monthly reports, including the board report and management reports, which were predominantly being created manually in Excel before the Workiva platform.

By connecting data directly to the source through integrations on the Workiva platform, changes to data now update automatically across numbers and commentary in their reports.

“We no longer have to go through the document to find, replace, or manually scan to make sure the update is applied everywhere. It’s just automatically done. That’s a real game changer for us,” David said.

This has led to a significant time savings, especially in the annual and monthly management reporting processes.

“It’s estimated that the Workiva platform has already saved us a week in our annual reporting process. At the busiest time of year for finance, that’s huge,” David said. “In the management and board reporting space, I estimate we’re saving a full day every month. This allows us to get our reports to our stakeholders in a more timely manner and allows teams to move onto business-planning activities.”

In addition, David said they’ve reduced the risk of errors and inconsistencies by having a single source of truth for their data.

“We have a lot more trust in our data and see far less human error creeping into the reports. There is also a very clear audit trail of where the data has come from and who has made any changes to the report,” David said.

David notes this goal of saving time directly ties back to empowering his team to focus on the work that matters and requires their expertise.

“We want to enable them to focus their talents on the key business initiatives and value-added work, not ticking and tying a set of financial statements for the fifth time or manually shuffling data around,” David said.

Reducing risk and headaches with the review process

Challenger’s reports go through a number of reviews from executives and auditors, which used to create a painful back-and-forth editing process that led to multiple versions.

For example, they used to hand out physical packets of their annual report to stakeholders for review. When the finance team received written comments, they had to quickly decipher the feedback and turn around changes within 24 hours.

Now with the Workiva platform, every reviewer can work together in one centralized, controlled location, including auditors.

“Finance and management can work concurrently on the annual report, being able to leave comments directly on the report with questions and answers passing seamlessly within the Workiva platform,” James said.

There is now less risk of error and increased consistency across reports, relieving the headache of managing multiple versions.

“Prior to Workiva, we could have only one person in the file at any point in time,” David said. “We used to have 70 versions of our annual report throughout the year, and now we have one.”

Challenger’s use of Workiva’s blackline functionality within the platform is another significant time saver in their review processes. The blackline functionality, which shows when and where changes were made, allows the finance team to compare versions of the document and highlight what’s been changed without needing to review the entire document again.

Three essential implementation steps for long-term success

To kick off implementation, the Challenger team initially selected seven reports to migrate to the Workiva platform. These seven reports were identified as some of the most important year-end, monthly management, and board reports, headlined by the annual report.

1. Find the right champions

To maximize the implementation process, David noted the first step is involving the right people up front. Having champions embedded throughout the team helps set you up for long-term success.

“I think having the employees responsible for running reports on a day-to-day basis involved in the implementation of Workiva was one of the most important and beneficial steps we took,” David said. “The more people feel involved in the project and a part of it, the more willing they are to adapt to the change.”

2. Gain managers' support

Having the continuous support of senior management to keep the project on track is crucial: “This ensures the team knows their efforts are appreciated. We were very fortunate to have this at Challenger,” David said.

3. Embrace flexibility as a part of the implementation process

“Being able to adapt and change your plans and designs as new information comes to light is critical,” David said. “We changed our initial plans multiple times throughout the process. While this might have taken us a little more time at the start, it set us up well for the future.”

Spearheading change: The transformation journey continues

In addition to using the Workiva platform for the annual reporting, management reporting, investment reporting, and statutory reporting, David said Challenger is considering how to bring the benefits of Workiva to other teams and processes.

Currently, they are exploring Workiva for ESG reporting. Their risk and compliance team is also looking into the Workiva platform for multiple risk and reporting processes.

Another major focus for David’s team is to capitalize on their technology investments and continue boosting efficiency. His team can envisage a lot of ways in maintaining Challenger’s transformation momentum on the Workiva platform.

“We are focusing on maximizing our finance transformation technology investments. With Workiva in particular, it's a testament to how well the platform has been received by the team,” David said. “There is still a long list of existing reports that the team wants to transition onto the Workiva platform.”

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¹ At September 30, 2022

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