Like changing the direction of a supertanker, business transformation is a process that takes time. So while Danish shipping giant AP Moller-Maersk (better known as Maersk) began a global consolidation and transformation programme back in 2016, the transformation journey to integrate the company’s three business divisions – ocean, logistics and services, and terminals – continues.
The company’s finance team has been the engine room for this mammoth task and can provide pointers for other finance functions that are about to take the transformation plunge. ‘To manage this new business and service offering, we’ve had to transform the finance function,’ says Scott Elliott, who joined Maersk four years into the transformation programme, first as finance chief for Asia Pacific in Singapore and now also CFO for Maersk’s logistics and services division at its Copenhagen HQ.
‘As long as you explain what’s changing and why, people seem to understand’
Because logistics is such a fragmented sector, a high level of controllership is needed across the business, Elliott says. ‘The finance function has focused a lot on maintaining sufficient transparency to understand what’s going on in each different business, what’s driving outcomes,’ he explains, ‘and finance needs to work closely in partnership with the business and support that.’
M&A challenges
During the transformation programme, Maersk has also carried out a number of mergers and acquisitions, which bring their own technology infrastructure, software, approaches to management reporting and financial reporting, and ways of working. ‘We’ve built a good framework for integrating the new businesses,’ says Elliott. ‘It gets easier.’
The finance function has had to standardise the way it looks at each part of the business and manages its performance, Elliott says, identifying the right financial views and key performance indicators. Differences in how some accounting standards have been applied in newly acquired companies have been a particular focus.
One example is lease accounting. Elliott explains: ‘Some of the companies we’ve acquired do their accounting for leases under IFRS 16 at a very high level, whereas Maersk does this at the level of each individual lease.’
‘It’s exciting and there is a big demand for specialists that know about sustainability and finance’
It’s part of the standard due diligence the finance department undertakes for each acquisition, but it’s not just a technical issue. The management team of an acquired company need to be brought alongside if they are to be comfortable managing the business with an unfamiliar view of the P&L.
‘As long as you explain what’s changing and why, and show what the change is, people seem to understand,’ says Elliott. ‘It’s about transparency and communication.’
The finance professionals also appreciate the benefits to their careers of being involved in M&As and transformation more broadly. ‘These activities have brought finance folk interesting opportunities to broaden their experience,’ Elliott says, from the perspective of deals, due diligence, integration and more.
For example, Nav Sidhu FCCA, Maersk’s area head of business controlling, UK and Ireland, says her role changes from one day to the next, but adds: ‘I can see opportunities for myself and my team to learn, and find our niche, as we support our non-finance business partners.’
Net zero
Reporting around sustainability, and environmental, social and governance (ESG) matters, is another area where transformation projects can offer opportunities for finance professionals. In 2021, when Alina Koriakina ACCA became compliance and reporting manager at Maersk in Denmark, it was a purely financial role. ‘I was looking just at the annual report but then I was asked if I wanted to also look at ESG reporting.’
Now, her role is increasingly focused on ESG. ‘In the future I see us creating a team or project group under finance to look at sustainability reports.’ With the arrival of new sustainability reporting standards, Koriakina has taken the initiative to stay on top of developments. ‘It’s exciting and there is a big demand for specialists that know about sustainability and finance.’
‘I have had to learn fast – otherwise you get left behind’
She stresses the need to stay up to date, as changes are happening in sustainability reporting at such a pace. ‘I have had to learn fast, and I have to keep on top of it because I talk with stakeholders and need to explain the numbers. You have to be fast-paced – otherwise you get left behind.’
Koriakina is full of enthusiasm for being at the leading edge. ‘It’s really a great area in terms of learning and growing your career. There is a big demand for specialists like me.
‘There are multiple systems, multiple stakeholders involved, and sometimes you’re working with completely new information. We will be comparing numbers over future years and we’ll all get better at integrating and streamlining this reporting.’
Managing change
One of the sessions at ACCA’s annual virtual conference ‘Accounting for the Future’ is about dealing with change: ‘Coping with change: tune in, connect, respond. Find out more and register to watch the sessions live on 21-23 November or on demand
