In this episode of "Controllers Classified," we’re joined by Daniel Hilli, Head of Business Control at Alstom. Alstom is a multinational company that builds and services trains and signaling systems. In fact, millions of people everyday are transported by Alstom trains and systems. Given the size of the company, this episode focuses on how to implement and manage financial processes across different regions and systems at scale. This includes dialogue around when to centralize vs decentralize reporting and budgeting processes, how to find efficiencies through digitalization and tool consolidation, and the best way to build lines of communication across global teams.
In this episode of "Controllers Classified," we’re joined by Daniel Hilli, Head of Business Control at Alstom. Alstom is a multinational company that builds and services trains and signaling systems. In fact, millions of people everyday are transported by Alstom trains and systems. Given the size of the company, this episode focuses on how to implement and manage financial processes across different regions and systems at scale. This includes dialogue around when to centralize vs. decentralize reporting and budgeting processes, how to find efficiencies through digitalization and tool consolidation, and the best way to build lines of communication across global teams.
Daniel also does a deep dive into Alstom’s acquisition of Bombardier and the integration implications that followed - including how to bring together disparate teams and technology and how to gain a holistic financial picture of the business and its spend in a post-acquisition environment.
The conversation closes with how Daniel tackles long-term projects like ERP implementation - and general thoughts for how and when to leverage external solutions consultants for implementations.
Key Quotes:
Show Notes
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Daniel: [00:00:00] So when you try to put what the issue is in numbers and show that, but how do we generate margin by doing this? All of a sudden, people, you know, Take a minute, think about it, and then you have the tough discussion you're talking about.
Announcer: Welcome to Controllers Classified, the podcast where we take a deep dive into the dynamic world of controllers, accountants, and finance leaders, and hear how their ever evolving roles are redefining accounting and the future of business.
And now, here's your host, Eric Zhou
Erik:. Hello and welcome to Controllers Classified. I'm your host, Eric Zhou, the Chief Accounting Officer at Brex, and I'm excited to welcome Daniel Hilli, Head of Business Control at Alstom. He's joining me all the way from Stockholm, Sweden, and with over a decade of experience in helping companies and businesses drive successful operations and increase [00:01:00] productivity through spend management.
and thoughtful analytical data, Daniel helps connect with key decision makers to build profitable businesses for growth. Daniel, thank you for
Daniel: being here. Thank you, Eric. My pleasure, really.
Erik: Maybe to kick off, tell us a little bit about Alstom and what the company does.
Daniel: Well, I think, short and sweet, we do three things.
We build trains. I think everyone has seen or heard about one. And then we do signaling systems, which is, trains talking to whatever it needs to talk with. And then we do maintenance and services for trains. So, so that is really the, the core business and then to put some flavor on it, you know, roughly 1 billion people are affected every day by our products.
So that's more or less one seventh of the world every day has something to do with our products everyday
Erik:. Every day? And are you saying one billion distinct people across the world, like, riding trains every [00:02:00] day? That's, that's amazing. Yeah,
Daniel: for sure. So, I mean, if we talk about impact business, that is, I think it's, we're in that category.
We fit in there well.
Erik: And tell me about your role, specifically as head of business control at the company.
Daniel: Well, it is for sure understanding the business, preparing a lot of reports for management, trying to understand what we should be doing, where we are, putting some structure, some focus in the numbers, and in the best of worlds, following up.
Contractual topics, aligning with, you know, operational managers, can we do something better? Should we do something differently? So, so it's really, you know, from just, getting numbers in a system to really optimizing what we already are doing.
Erik: How often does that happen? Like working with the cross, we call it cross functional work here.
at Brex, I interact a lot with the marketing team, with, the R& D team on the software development side, with our infrastructure team for managing our payment rails. [00:03:00] How, how often do you end up working with the different departments to work through these processes and redesign, redevelop, reassess, et cetera?
Daniel: Well, I think if we take one step back, if we talk about finance, then, then it's all of us. And then we, if we define it between accounting and controlling, then accounting are looking, you know, backwards in history, and then we in business control are more looking forward. So that means that, you know, it's every day really that we're looking into what can we do differently and where are we?
And, Is there some pain points that we need to, you know, take a decision on, do something else, optimize, implement, digitalize, what have you. It could be anything of the above.
Erik: You must be also reaching out to all these business partners to see how you can help too and building relationships and looking for ways to build efficiencies as well.
Daniel: For sure, for sure
Erik:You have a big project management background and then you arrived in this role as head of business control here. Obviously, [00:04:00] I know you also have an accounting background as well in general. Was there any critical moment in your career so far that led you to this position at Alstom and your particular role?
Daniel: well, sorry to say, let me speak, you know, let's say clean English. I, I kind of started my career as first, so I worked myself up to, well, acting CEO for a company. And then I, you know, started working as a CFO, and then I went down to business controlling, and then I, you know, took a deep dive and went up again to, head of business controlling.
So I think, if there are any key turning points, it is really... When you get the opportunity, you take it and meanwhile you work hard and deliver results and always try to, you know, think about what's the value add I'm really doing and then I'm not talking about having a fantastic PowerPoint, you know, really looking at, is this giving anything margin wise?
Do we have the correct head count? You know, how do we do this? In the business [00:05:00] controlling perspective, it is hard to do. But if you're more operational, then it's easier because you, you know, you're the person talking with the customer, you're the person drawing up the contract with legal, most likely, depending on the size of the company.
So, of course, if you're a more business person, it's easier, but at the same time, I think in the best of worlds, business control helps with, you know, putting perspective. And more business on the table, really, or at least optimizing the business we have.
Erik: I'm chief accounting officer. I work very closely with the finance team.
Sometimes I'm in these meetings when they're going over numbers and profitability with the different departments. Some of those conversations can be pretty tough. Like when you're talking to the business about recommendations or things that you want to get changed or think that are better for the business.
Can you, can you describe some of those interactions that you have with Any particular departments at Austin?
Daniel: Our currency in finance is, you know, reliability and, let's say having [00:06:00] trustworthy, clean numbers in a way it, it, everything kind of starts with that. And then you can have a meeting and then usually, you know, it's a.
Bringing clarity to the meeting. What are we actually discussing? Because when you talk to a business person, this, this kind of profile always has a lot to do every day. And, they are running after the business, trying to solve anything, whatever operationally. And when you come from finance, you know, you never saw the problem, but you have the perspective.
So when you, you know, try to put what the, the issue is in numbers and show that, but how do we generate margin by doing this? All of a sudden people, you know, take a minute, think about it, and then you have the tough discussion you're talking about. But depending on how you lead that discussion from finance, you know, you can come to the conclusion that maybe we're not doing the right things.
The trick is that everyone wants to do what they know, and no one wants to step [00:07:00] out of their comfort zone. And that goes for if you are to change a system, digitalize, you're getting a new, you know, let's say, opportunity in your work to do something else, your everyday work, because at some point people, you know, want to come in and feel that they deliver and they know what they're doing.
Coming into work every day, not really knowing what you're supposed to do. You know, it's really tough on people. So I think this is going to change management. That's exactly what happens there. That really
Erik: resonates with me. I think for most people at the company, right, they're really focused on their core job.
They have a core job that they've come in to do, that they've been doing it, and then going through the change management process Inherently is difficult because it's different from what their core job traditionally has been or what they were, they signed up for at the company And, yeah, it's something we definitely tackle with here at BRX as well, so, so, that really resonates with me let's move into kind of like general [00:08:00] operations at Alstom how many employees do you guys have at the company?
80, 85,
Daniel: 000 headcounts right now.
Erik: So by comparison, Brexit's 1200. This is like a truly different scale. Tell me how, where they're located. Like, are they all in Sweden or, or where are they, where
Daniel: are they around? Roughly 45, 000 in Europe. So that's, that's for sure the core business. Then the States, I think we have roughly 10, 000 and then they are a bit spread around Africa, APAC, Australia, these kinds of regions, the rest of them, APAC, pretty big.
But, nothing compared to, to Europe, for sure. Not, and the States is always the, the business is the, that is supposed to happen next year, but it just never happens, uh, for different reasons. But, but for sure that that's a big growth market as well.
Erik: Given the fact that you guys have, presence, physical presence in so many places, how did you think about structuring the finance department globally?
And, and do they, how do they [00:09:00] interact with each other? If you have them spread out across the different jurisdictions?
Daniel: We have this classical hierarchical setup, so we have group with functions in finance, and then we have region, cluster, and country level. And then, We have the legal entities reporting taxes, but then we also have this matrix, or cross functional, let's say, where you have three product lines, which is what we are doing really, building trains, signaling systems, and maintenance.
and... They then in turn report to their heads that are not reporting to the, let's say, the CEO level, which is the legal entity level. So, maybe a bit confusing for someone who hasn't been in this kind of, business model, but, but that's really the setup. So we have the accounting team doing the, let's say, legal entity setup.
And then controlling is usually doing both a little bit in cross and then. right [00:10:00] upwards in the hierarchy. That's really
Erik: helpful, actually. But taking a step back for all of these different functions, country level, region level, you got group level, and I'm assuming that's in, in, in Europe. how many finance and accounting professionals is that for the
Daniel: company?
2, 500 plus somewhere. The latest number I saw was 2, 500 something.
Erik: And so let's think about global and bring it all. It's like, you got all of these teams, different countries speaking different languages. Working with each other, they ultimately all report up to group. What are some of the main issues that you deal with in that kind of schema?
Like what, what are the main, main concerns that you have or main things that you're trying to work through every
Daniel: day? Disconnection is one. I mean, there's a very different vision when it comes to stock owners. let's say what, what, what they are expecting from top management and what they're, you know, Let's say how they present the [00:11:00] way forward and what our everyday job is on, let's say, region and cluster level.
So, so it's a very different type of animal depending if you're on the very top or if you're somewhere in the middle. And I think it's understandable and it's doable and it's not like it's unique for Alstom. But at the same time, it creates a lot of tension and frustration when we don't really talk about the same subjects in meetings sometimes.
And the disconnection is also that after you go to vice presidents, they go to their, their presidents or, or director level. After that, the, let's say the story changes, and then we're talking about something completely different. It can be that we have, you know, incorrect data or we don't have an automatic setup that's working, or it could be that, you know, headcount is incorrect or, you know, it's, it's more these kind [00:12:00] of, cleaning processes that, that we're looking into.
While when you come to the vice president region or higher level, then it's more. The global strategic discussion, which is, you know, you, you can't really have the both in the same meeting because then you're lost in details.
Erik: At a company of that size with everyone reporting up to the group, how much of your decision making and maybe let's focus on like global spend, for instance, or all the spend that different regions do.
How much of, those, that decision making is bottoms up versus tops down? Or maybe it's something in the middle because it's so big.
Daniel: All the decisions are made through bottom up analysis. So we say that this is what the actual spend is, and this is the headcount that is spending it, and this is why we need it.
And then we could get a target. But, but in the end of the day. Most of it is connected to projects, which is, is our business. [00:13:00] If, if we don't deliver the projects, we're not paid. We don't generate sales. We don't generate margin, no cash in and so on. So, so it's, it's in a way, an easy discussion in another way.
It's a difficult one because we need to be more lean. We need to, you know, have savings as everyone else. But at the same time, we need to spend because otherwise we can't deliver. So, you know, it's, it's a balance somewhere there. You talk about
Erik: digitalization and, and, and like use utilization of systems, previously, what systems do you use today?
Are they the same across every single region and country? You're smiling and I, I'm thinking that might not be the case. I was an auditor before and I've worked on different companies, large companies, and some of them grew by acquisition and so they couldn't help it. They acquired a company that had a whole separate set of systems.
How do you marry the two? I'm, I'm, I'm curious about your experience at Alstom and
Daniel: what it's like. We talked a bit about, legal entity level. So, you know, a legal entity is a, is [00:14:00] a, is a company. On a paper, when we bought Bombardier like three years ago, we inherited one company that has 19 levels of different legal entities within one legal entity.
And they. Well, this specific, you know, case, they have different systems talking with each other on all levels. And, and it's like, you know, 1000 people working for this specific company. So let, let's not call it a nightmare because that's all, then it sounds like something is very impossible, but I would say we have exposure in over 70 countries.
The 19 layer setup is not unique, but it's not, you know, in every legal entity. But at the same time, we have a lot of systems everywhere. We have, you know, Busware, we have Nomentia, we have SAP, [00:15:00] we have, you name it. I think we have all of them, actually. And then the question is, how do you do some kind of homologation there?
How do you, you know, streamline this? Because in the best of worlds, you know, the dream for top management is that you have the one system. That is connected to your iPhone and with one click you see your free cash flow, order intake and it's real time and you don't have to wait for anyone and accounting has no excuses and you know, and then all of a sudden you, you know, you have your numbers and you can run your phone from, I don't know, Bali or Bahamas or whatever, but this kind of, you know, it kind of never happens, right?
It just never does.
Erik: I've seen the vision at Brex and what we're trying to build. I mean, you know, I, I, I'll admit that we're not all the way there, but we're certainly on the way. And I think we have compelling products, but yeah, like I agree with you. People have been dreaming about this for 20 years. But,
Daniel: yeah, no, I, I think that, that was maybe furnishing a little bit, you know, [00:16:00] complexity and, and where we are.
And, I think people might understand what the challenges are just, you know, by talking about a little bit this kind of exposure and not to talk about, you know, support functions, cyber security, you know, call center support in different languages that should be up and running 24 7. And then we talk about 70 plus countries, and now we just pretend that we take one solution, do a copy paste in every legal entity, and we're done.
Erik: You guys have obviously disparate systems across different regions, different countries. You have had a major acquisition. What are the kind of processes or manual processes that you've implemented to try to just give yourself some level of visibility into spend, at whatever cadence is appropriate for you, whether it's real time, weekly, monthly?
Daniel: If we take it from the beginning, when we started the journey, which is by the way, the biggest acquisition [00:17:00] in Europe's history. So the integration between Alstom and Bombardier is the biggest one in Europe. In the States, maybe it's peanuts, but, but in Europe for sure, it's the biggest so far, so 40, 000 people plus 40, 000 people integrating different systems, a bit different cultures, trying to do a setup that works.
And then we go into what kind of manual processes have we. inserted along the way, I think one good example was when we started, you know, we were supposed to understand where we are as a company, right? And this is monthly. So we get a big report, 70 slides, something, that is supposed to get numbers from a system no one has access to.
And long story short, in the end of the day, we needed to, you know, populate all numbers by ourselves and then build a PowerPoint and then also understand the numbers. And this was roughly four working days. So, I think we could take... You know, 100 examples, at least, [00:18:00] especially in the beginning. And all of these kinds of things we're now trying to automate, you know, so we, we can't sit and build reports somewhere we, we, you know, we, we just can't, it's impossible, then, then we're too far from the dream.
Erik: How many levels of automation are there? If a system, do you have to build a separate automation for every system? Or as part of automating, is that an opportunity for you guys to maybe consolidate some systems, or deprecate some systems? Or, you know, there's this question I think of, also when you have so many different locations, how much of the processes you want to centralize versus decentralize?
Is there, is there that kind of discussion as well, because you're talking about this huge PowerPoint, getting the data from all these different places at some, like, obviously the data has come from decentralized processes. Is there a decision there to centralize the process and bring it in house into the group, for, for whatever reason, [00:19:00] as a result of automation?
Daniel: Yes, I think that there are some initiatives there. when it comes to this global perspective topics, anything that has a global touch to it. It is centralized and it is handled by the central team and they have this kind of their set of experts who just, you know, it, you, you get an email that now this is happening and there's nothing you can do about it and then you get a number, but, but that's it also.
So I think in a way it, it is how it should work. And we actually have also done some tests just doing a down budget and trying to see how well it fits. and, and actually it's more accurate than a bottom up budget. The problem is that then when you try to give the ownership to someone who didn't do the budget, then everyone is kicking and screaming and saying that we don't want to do it.
So, you know, there's a sweet spot, what you can centralize. And then if you want [00:20:00] ownership, you need to push it down to the countries, but then you also need to give it to them, you know, please deliver, this is your budget, this is what you believe in, but then you also need to live up to it.
Erik: Speaking of, I think decentralization versus centralization of a process, that concept and the decision behind it can, can even affect, like at Brex, most of our operations are in country in the US.
And I think about that also at the kind of employee versus finance level. And so we have a process related to procurement. Right, and we, we've actually recently redesigned the process, and for this particular process, we used to have, all of the individual requests come in through email into the AP department.
Whoa. And so the AP department would, centrally, would have to take all those requests, turn them into tickets. We serve the tickets and we try to, we make sure the purchase request gets populated in our procurement system, that [00:21:00] it flows through the workflow and gets all the approvals. And we kind of manage the process centrally.
Right? And that gives a lot of, time back to a lot of employees. It's an administrative function. Employees that are in marketing, that are in, R& D, you know, they have a core job to, market the company or to develop a certain software. It's not really to do administrative work like this. and so we centralized it and that was the decision we made.
Now the company's really big and now the company has a lot of different departments and a lot of different in all of these departments making purchase requests. And while When we were smaller, it was easier to centralize. I think as we've become larger, the decision comes back like, maybe we need to put a little bit more power back into the hands of employees.
One, operationally, it's more efficient. And two, sometimes we end up being the blocker because we're centralized and we're the bottleneck. And so, you know, we've redesigned the process. Employees are now back to, making the purchase. We actually did a little bit in the middle, but [00:22:00] there. Putting in the purchase requests now.
They manage the intake. They can see how things are going in the system, and we have stuff on the back end that's running, sometimes through automation, sometimes like through manual processes, because like if it's a new legal contract, the lawyers do have to review the contract, etc. But yeah, like we've kind of gone through that evolution ourselves between Centralization to decentralization, times a flat circle, maybe one day we think it's more efficient decentralization again, but you know, for you guys, tell me a little bit about how you guys manage those approvals and the kind of spend culture at Alstom, like when, when you have different regions or employees That one to spend X, Y, and Z, how much of it is, how much of it is in their power versus you guys centrally managing the process?
Daniel: Most of the, let's say the approval process is in our [00:23:00] hands. The only time something happens is if we have a, uh, a block on spend, then for instance, all travel needs to go through the CEO, which is, it's totally crazy. But, but. You know, it, it kind of sends a signal that it's for real this time. The thing is, it happens more or less every year.
So, you know, it's for real often. but, I would say we, we have a lot of power when it comes to the approval processes. But then to go back to your question, we, we don't handle it actually because, well, one of the things I saw when I came to, to the company was that. We have a lot of systems, we have a lot of different setups, but in the end of the day, we don't really have a clear ownership.
You were talking about, you know, one email that you send to this specific account. And then it's handled. And this is a little bit, the thing I'm doing now all [00:24:00] over the company. You know, I, I try to understand what is it we want and what is it we're doing and what does it look like today? And in all of these meetings, I have 15 people doing a little bit here, a little bit there, and I always, you know, put the one person in charge and say that.
You're the one, Eric, you handle this, you have your team,
Erik: you're going through. And maybe you guys use the same words. It sounds like a bit of finance transformation or like systems transformation.
Daniel: And for sure. I mean, just, just to put a number on it, the synergy effects communicated to the market when we started this journey.
600 million euros.
Erik: There's real value from, you know, digitalization, rethinking your processes, making it, you know, you just using the power of software and automation and maybe AI one day, who knows, to, to, to make your systems more, efficient and productive. For sure. You [00:25:00] mentioned this ERP implementation or, or consolidation that's, that's happening right now.
That must be a huge project because you guys have so many employees, so many different places, that you operate in. you know, what are, what are, to, in my, like, from your perspective, what are the top two or three things that you make sure things are going well on, on the implementation across these different
Daniel: regions?
I think have a clear perspective and really have a clear vision on where you need headcount and support and always try to, you know, be a bit aggressive in the beginning because time flies, time management is key and all of a sudden you talk about implementing during one and a half year. All of a sudden, the first year just went by and not much really happened.
And then in the final three months, all of a sudden, everything [00:26:00] needs to happen at once. So try to, you know, get a bit nervous, get a bit stressed in the beginning, and try to, you know, solve as much as possible and keep the pace up. Because the time flies by and all of a sudden you're sitting there. And you have everything you need to do today, because tomorrow we are pulling the plug.
Erik: What we call it here is like creating a sense of urgency. When you have a long project, people like to think, you know, Oh, I have six months to do this. I'm going to work at it slowly. I'm going to take it step by step. But actually, when they plan, when I planned out the six months, I was thinking it was going to be this much work, this much work.
And it all kind of like, you got to average it out, right? You don't want to do too little and then do too much later on. It also creates a higher risk for errors, right? For oversights and things like that. And, and, and I agree. It's really like, like for us, right? And we're in the software selling business, you know, we really push our clients, when they have a more [00:27:00] complex, integration to leverage a consultant, leverage an implementation solution consultant that'll keep the team on track and create that sense of urgency for everyone.
Certainly in the beginning stages of a project. For sure. We talked about a lot of different system inventions, a lot of the processes that you guys have at Alstom. what's the funniest accounting debacle that you've kind of witnessed or been a part of?
Daniel: Well, I can give you two maybe. And it, you know, it's, it's just these kind of strange things that kind of just happens.
And so we have this kind of cowboy CFO and You know, we came into work like on a Monday and on Friday he said that, yeah, by the way, we're implementing SAP and he pulled the plug. And then we just pushed in all data in SAP and then here's your user account and go ahead and be successful, you know, so we did this kind of cold turkey and everyone was just, [00:28:00] I don't know.
so we closed our books on forecast for six months. We had no clue where we were. The thing was, we were pretty good at forecasting. So, you know. It was very strange, but at the same time, you know, it, it, it was an experience. So, but that was some strange times. And I can tell you another one in the same setup, then the thought process was that we have these two consultants, right, from SAP sitting there in a room.
So they were, you know, hogging this big conference room for themselves, and it was like two people sitting there for one year. And the thought process was that, yeah, yeah, but they will educate you on how to do your work, right? So, you know, I had my topics and I needed guidance on how to, which button to click on and what to do.
Thank you. And I went in there and they looked at me like I was from earth and they were from Jupiter [00:29:00] or something. And I had a very simple question, you know, I want to send an invoice and accounting team needs to look at balance sheet. How do we do that? And they were, you know, kind of mocking me for five minutes.
Then they gave me a link to a folder with like 1000 PDFs, and each PDF had like 500 pages in them. And one of those PDFs, you know, told you how to send an invoice. But, but I mean, it, it, it wasn't labeled, you know, how to send an invoice. It was, you know, this typical SAP technical code, you know, set AWE dash something, you know, and you were just supposed to understand this.
So, you know, I don't know, it's maybe not so much fun for anyone who doesn't understand this SAP challenge, but for everyone who has been working with it, I think it's,
Erik: yeah. But the [00:30:00] analogy would be like, you know, and I have kids, and my daughter is going into fifth grade, and I think in fifth grade, you learn, let's say you learn something about math, it's like, You know, when, when my daughter goes into class and she's trying to learn this math equation, the teacher then just shares five pages of how the math equation works and says, read this and understand it.
That's just like the same thing. I want to share one story, just because of what you just shared here. And it was from another podcast guest that we had on the show. His name is Ron Cook, and he's the controller at a company called Lightcast in, in, in the U. S. and he's gone through a bunch of implementations too, and I don't know how much it would work at Alstom or any of these country, companies that you've worked at before.
But whenever he does the implementation, he always makes a decision for every department that it impacts, and he says to himself, Okay, for this department, Are we going to get external people to come in and be the consultants, or are we going to ask some members of this team to be part of the implementation to learn it and to, like, kind of drive the [00:31:00] processes to ensure?
And instead, we use the consultants to do the current process. Right. Right, and I actually haven't thought of it like that before, like to me it was novel, maybe like it's been out there in the world for implementations. But I thought that was really good because often times what you're looking for is the best marriage of like what you have for your existing process, how you want to evolve it.
Right? From the people that actually do it today and know it the best with this new system. Well, Daniel, it was great to have you on the podcast. Thank you very much for joining us all the way from Stockholm, Sweden. I know the time it is right now. It's in the early evening. So really appreciate you joining and for all our guests watching the show.
Thank you and look forward to seeing you next time.
Daniel: Many thanks, Eric, for having me. Was very much appreciated.
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