Enhanced Finance Controls and Automation by BlackLine to supplement SAP Finance. E-3 interview BlackLine with Petra Ellmerich, Regional Vice President DACH, and Mario Spanicciati, Chief Strategy Officer.
With BlackLine, SAP has a congenial partner in the area of finance. The US company specializes in Enhanced Finance Controls and Automation (EFCA) as well as Financial Corporate Performance Management (FCPM). Many European customers use this important supplement to SAP. For the office opening in Frankfurt/M, Mario Spanicciati, Chief Strategy Officer at BlackLine, and Petra Ellmerich, BlackLine Regional Vice President DACH gave an exclusive interview to E-3 Magazin.
What software categories does the BlackLine offer represent?
Petra Ellmerich: BlackLine is a provider of cloud-based financial controls and automation software solutions that centralize and streamline financial close operations and other key accounting processes for midsize and large organisations Recently, Gartner named us a leader in its 2016 Magic Quadrant for Financial Corporate Performance Management (FCPM) and as a pioneer of the Enhanced Financial Controls & Automation (EFCA) software category.
What does the Logo means?
Mario Spanicciati: Our logo shows a checkbox. The checkmarks represent checking items off an accounting checklist: prepared, approved, reviewed. The company name means “in the black and above the line”, suggesting positive cash flow and a moral, trustworthy, ethical culture.
Where and when was BlackLine founded?
Spanicciati: BlackLine was founded in 2001 in Los Angeles. Our first product was a wealth management solution. In 2004 we shifted our strategy to focus on account reconciliations. In 2008 BlackLine went into the cloud. Our complete and fully integrated EFCA platform has been available since 2015.
What was the original idea?
Spanicciati: BlackLine CEO and Founder Therese Tucker was originally focusing on providing a wealth management solution to First National Bank of Nebraska when a contact there expressed frustration over the company’s manual process of reconciling its books. From this initial conversation in 2004, BlackLine – as we know it today –was born. In 2008, Therese led the company’s shift to a cloud business model, an uncertain and somewhat risky move considering it meant significantly less upfront cash for BlackLine.
How has the concept changed?
Spanicciati: Therese believed more customers would be willing to sign on in the beginning due to the lower capital expenditure. The gamble paid off. Almost all cloud customers increased their number of licenses over time, generating more and more recurring revenue for the company. The platform has since been expanded to cover a broader range of key Finance & Accounting processes. Today BlackLine is ushering in a new era for Finance & Accounting, enabling Continuous Accounting – where traditional Record-to-Report activities are always happening, continuously throughout a period, minimizing the month-end crush during the close.
Whom is the solution intended for?
Spanicciati: Our solution addresses Finance & Accounting teams in companies with more than $100M U.S. revenues in all industries.
A classical SAP customer will assume that the software from Walldorf is complete, specifically in the FI area for Financial Corporate Performance Management. Is this wrong?
Ellmerich: The BlackLine Financial Close Suite for SAP Solutions, since 2013 an SAP-endorsed business solution, complements the functionality inherent in SAP ERP Finance and S/4 Hana Finance. It enables organizations to close a gap between ERP and CPM/EPM in the traditional financial close process that has typically been bridged with manual efforts and spreadsheets. BlackLine replaces these antiquated, labor intensive, and risk prone processes with a technology that unleashes the skills and resources of accountants and helps them to focus on more strategic tasks. Together, BlackLine and SAP deliver an end-to-end solution to accelerate the financial close and enable Continuous Accounting.
There are many Excel add-ons from the SAP-Partner-Community for missing functions in the SAP-FI area. What is wrong about this system?
Ellmerich: Manual processes and workflows are error-prone and thus risky. Apart from that, automated processes save significant amounts of time and resources.
Are you for or against Excel?
Ellmerich: Spreadsheets can be used in the SAP environment where reasonable. That’s not necessarily the best case in finance and accounting. We want to automate as many financial close processes as possible. Extracting data from a system and processing it manually is simply not up-to-date anymore. And again: It is extremely error-prone.
What is your unique selling point?
Spanicciati: Our solution enables fast and reliable close results and brings transparency and visibility into accounting processes. Continuous Accounting ensures more balanced workloads throughout the period and avoids peaks that typically appear at the end of the period. In addition, real-time information on the financial situation allows business decisions based on reliable data and brings strategic and operational management fully “in line” with finance.
What can the SAP user save with BlackLine?
Spanicciati: By using BlackLine, SAP users avoid labor-intensive financial close processes as well as time-consuming manual data and record-keeping. Furthermore, they can absorb heavy closing workloads during the period. In short: They benefit from saving time, gaining visibility and ensuring reliability.
What are the prerequisites for using BlackLine?
Spanicciati: Our solution is compatible with virtually all common ERP systems and SAP versions – from R/3 to S/4 HANA. The BlackLine Connector 3.0 achieved certified integration with the SAP NetWeaver technology platform running on SAP Hana, providing embedded, real-time integration between SAP ERP and the BlackLine Financial Close Management solution. Because the SAP/BlackLine solution running on Hana is hybrid cloud, it works with any SAP ERP investment a customer is running today, or plans to in the future – across versions, instances, on-premise, or cloud – and even enables data to be incorporated from other ERP instances across the enterprise. This makes the solution completely flexible.
Why use an unsafe cloud solution for the FI area?
Spanicciati: In many ways, hosting data with BlackLine can be more secure than hosting it internally, as we have dedicated extensive resources to data protection. BlackLine regularly undergoes a series of stringent audits designed to test our systems and internal controls. We have an SSAE16 SOC1 Type II/ISAE 3402 audit report, SOC2 and SOC3 certifications and the highly regarded ISO/IEC 27001 certification. These audits attest to BlackLine’s exceptional security, well-crafted policies, effective redundancy/back-up procedures, and carefully controlled development process. We guarantee our customers that we always stay abreast of any relevant security trends, e.g. encryption, penetration and vulnerability prevention, secure development, Access Control and the employment of best practices.
You work with SAP data, import and export: Is the subject of indirect use relevant? What SAP licenses do you need to use BlackLine?
Ellmerich: SAP and BlackLine are independent. No SAP licenses are needed for BlackLine.
What interfaces exist between BlackLine and SAP?
Spanicciati: BlackLine can provide a number of interfaces for SAP that exist within the Connector – an add-on/transport embedded within SAP that can provide data extracts for General Ledger (GL) Trial Balance, Sub Ledger balances, currency rates, transactions.
How high is the training need and how many man-days does customizing need?
Spanicciati: The integration can be done via the connector and takes only a few hours. The handling is very intuitive. Of course we provide as much training as our clients want and need. Much of BlackLine’s training can be accessed via our in-application, custom Learning Management System.
Are the FI business processes filed with BlackLine in the SolMan? What ensures compliance and governance?
Ellmerich: No. BlackLine is an independent SaaS/cloud solution. So it is not available for monitoring or managing from SolMan. Compliance and Governance are guaranteed by the internal IT controls around the use of BlackLine itself.
The BlackLine solution obviously is an important supplement to the SAP-FI system for the CFO: Might SAP be able to close the “gap” someday?
Ellmerich: BlackLine is complementary to SAP and the leading solution for modernizing and automating financial close processes. SAP would not have endorsed our solution if they intended to develop something themselves.
What is your relationship to SAP? How and where do you cooperate?
Ellmerich: We have had a long-standing and strong relationship with SAP for more than five years now. We provide one of only 40 SAP-endorsed software offerings recognized by SAP globally across all industries and categories. BlackLine is also the only SAP-endorsed business solution in the Financial space. As the preferred partner for SAP Financials and SAP S/4HANA Finance customers, we share over 400 joint customers worldwide.
Can BlackLine be found on the SAP price list?
Spanicciati: No, the BlackLine Financial Close Suite for SAP Solutions is an Endorsed Business Solution. Endorsed Business Solutions are not on the price list but are recommended by SAP sales reps to complement their SAP investment.
What do the analysts say about your SAP supplement?
Ellmerich: Gartner recently recognised BlackLine as a “Leader” in its Magic Quadrant for Financial Corporate Performance Management Solutions.
Is that positive or negative for SAP?
Spanicciati: I would say this is very positive since now both SAP and BlackLine, are recognized as Leaders by Gartner in FCPM. The combination of the two can only benefit customers in the long run.
Why did you open an office in Germany now?
Ellmerich: Our new office in Frankfurt/M is part of our worldwide growth strategy and our strategic hub to push forward the expansion in Europe. Growth in the German speaking markets is an important objective for us.
What are your targets for the rest of the year and for 2017?
Ellmerich: We want to position BlackLine as a global player and market leader in the DACH region and build a solid and fundamental hub from Frankfurt near SAP. A strong local presence also allows us to strengthen our partnerships and relationships with existing customers, as well as expanding our business in the region and delivering fast success to new clients.