3 digital transformation takeaways from CNA's finance team

It's no secret the insurance industry urgently needs to modernize its core financial technology. For too long, insurers have been hobbled by outdated legacy systems, onto which new applications have been continually grafted—resulting in an unwieldy behemoth of IT infrastructure.

For years, the finance function at CNA, one of the largest U.S. commercial property and casualty insurance companies, had relied on an on-premises enterprise resource planning (ERP) system. But our ERP was - in reality - five different financial systems, including an accounting center and a journal processing center. This disconnected structure led to ongoing challenges with integrations and data reconciliation. Upgrades and customizations consumed a great deal of effort and money.

In 2018, we set out on a modernization journey and moved from our complex collection of systems to a unified, cloud-native platform. The goal? To provide our finance function with timely and trusted data, empower them through self-service and automation, and deliver more agile and accurate forecasting and planning to help drive the business forward.

Our transformation journey holds valuable lessons for any insurance finance function looking to modernize. Here are three key takeaways:

1. Seek out opportunities to drive agility and automate core processes. 

To alleviate the pains of having siloed data living in complex, inflexible systems, we were looking to move to a single-platform, cloud-based system. We ultimately decided to pursue a full transformation to the cloud to reduce our total cost of ownership as we would no longer be maintaining our own infrastructure. We wanted a partner - not just a vendor - to help guide us in this transformation and build what we needed. 

We transitioned in phases, moving to Workday HCM and Workday Financial Management in 2018, Workday Adaptive Planning in 2019, and Workday Accounting Center in 2020. With all our finance data on one platform, we've achieved the agility needed to manage our business in an environment like the one we're in now - where things are constantly changing. 

Prioritizing agility can have a dramatic impact on finance's ability to deliver for the business. For example, your team may currently publish one plan per year. But what happens when interest rates or inflation skyrocket and your static plan becomes obsolete? If your plan lives on a flexible, cloud-based platform, your finance team can replan and push the new plan out to your sales team multiple times throughout the year as the macroenvironment changes. 

Having your data on one platform means the full, global finance team is working with the same data, in real-time. If someone in the U.K. enters a revenue adjustment, somebody in the U.S. is going to see the income tax effect immediately. 

We also prioritized automation. In late 2020, the accounting team started automating journal entries, executing 14 automations that November. By the end of 2021, we had delivered over 100 automations. Now, we deploy two or three automations every single week. This simply would not have been achievable with our old system and ways of working.

2. Focus on your people—enable the work they want to do and provide them with the support they need to do it.

As part of our evaluation process, we captured feedback from the people using the systems day in and day out. We heard some consistent themes: users wanted systems consolidation—one place to perform their daily work– and to be less reliant on IT to run integrations and configurations. Top talent doesn't want to live in spreadsheets and spend their days reconciling pivot tables. They want to do more meaningful work to make a bigger impact for the business. 

Because our old system was so burdensome and complex, the finance team constantly had to rely on IT to code changes in multiple systems. We felt helpless because we were unable to make changes on our own–and it was time consuming and expensive. By moving to a flexible system, our finance team is now empowered to make configurations quickly and build automation into everyday core processes, which drives agility for our team and frees up time to do more meaningful work. 

It was also essential that our finance team has the support they need, so we prioritized enabling vendor support 12 months out of the year. Surprisingly, this ended up being more cost effective compared to our previous planning tool vendor, which offered only four months of support.

3. Demonstrate how finance transformation brings value to the entire business and benefits the bottom line.

So, we transformed our finance function. The question was, does anyone outside of finance care? At CNA, the business answered that question with a resounding "Yes!"

Our transformation had a significant impact on our bottom line. We realized 30% cost savings in our financial systems by no longer hosting and maintaining on-premises hardware. We saw a 27% improvement in IT efficiency. We spend about $100,000 less per year on support and licensing. And we were able to reduce our accounting resources by 15%.

In our old system, any last minute request to make significant changes to a financial plan probably would have taken days to complete and likely would have caused a massive fire drill for our FP&A employees. However, when a similar request was made after CNA had undergone its financial transformation, CNA's FP&A director made changes to the plan over the phone in real-time and was able to deliver an updated plan to the head of the business segment and a senior executive in only 90 minutes. This agility really hit home for me, and I believe it will drive our success in 2023 and beyond.