Mika Tulonen 0:00:00.0: 

My presentation is also about transformation that we have done during the past years in OP Pohjola. I personally have an opportunity for more than 20 years participating and being in multiple transformations across different roles, organizations, and industries. In companies like Nokia, which you might be familiar with; Helsingin Sanomat, the leading newspaper in Finland that faced digitalization; and Posti Group, the former state-owned, government-owned postal company that nowadays is a stock listed company, that faced the decline in postal deliveries and had to transform and re-innovate it as a logistics company. All these experiences have provided me quite a practical experience, what transformation really takes. Before going further to the transformation at OP Pohjola, a short introduction, who we are and what we do. OP Pohjola is the leading financial service provider in Finland. We operate across banking and insurance business, and we serve more than 3 million corporate and private customers. We have a history, more than 120 years, and we operate under very strict regulation, with a high expectation of accuracy, transparency, and trust. 

Mika Tulonen 0:02:01.3: 

We are a cooperative owned by our customers. We have about 2.1 million owner customers, which is quite a large share of the Finnish 5.7 million population. At the end of last year, our balance sheet totaled €165 billion, we made an operating profit of €2.3 billion, and we are around 14,000 employees altogether in the company. We have a very high market share in banking, in loans and deposits, and also in non-life insurance, and a strong position in life insurance and wealth management. Our capital adequacy exceeded 21 per cent at the end of the last year, and we are one of the most strongly capitalized banks in Europe. That's shortly about OP, then let's move to the transformation. What is driving transformation? I think we can agree and see that we live in a world that is very volatile, very uncertain, complex, and ambiguous. A VUCA world. I think we see this every day, we see how fast technology moves forward. We just saw a presentation that how fast AI is moving and so on. When we open the news in the morning, we see, or feel even, the geopolitical tensions that is going around in the world, and I guess we all remember the time of COVID-19, the pandemic time a few years back ago. 

Mika Tulonen 0:03:52.8: 

For us in finance, this translates to something very concrete. There is a need for clear vision and direction. There is a need for better understanding of the business where we are, the environment where we operate, and the decision makers expect clarity, not complexity. We have to adapt our plans frequently, all the time, and our forecasts continuously. When organizations start the transformation, the first instinct is often to start to talk about technology, mode of operation, and roadmaps. In my experience, this is not where we start a successful transformation. It starts with a clear vision, a shared understanding where we are going, and why that future matters. Without a clear vision, a transformation easily turns into a collection of initiatives that don't quite end up at the end of the day. This is why, when we started the transformation in OP, we asked ourselves a question. What is our purpose? What is our identity? What is our vision? We came up with this, after quite a lot of discussion and talking around it. We coach and inspire better financial decisions. We challenge and guide. We innovate and play. We create and share high quality information, and we operate at the forefront of technological innovation. Sorry, now I need also a glass of water. 

Mika Tulonen 0:06:24.5: 

When the vision is clear, then the real work starts. One could think about the transformation as like building a bridge. In our case, it means building a bridge from fragmented systems, disconnected processes, and manual and reactive work, towards something that is a connected enterprise, coherent processes, data, and data quality, and where finance actively participates in decisions. Our roadmap; after that comes the roadmap and our plan, how do we handle this further? We had four different phases. We call them low hanging fruits, modernizing the foundation, connected enterprise, and one ecosystem. Technology alone doesn't do the transformation, but people do it, and that's why we, in the very beginning, spend a lot of time across our processes. In all of these phases, it includes many process development. If we look at our planning forecasted, we focused a lot of strategy planning how we make it rolling, continued strategy planning. We link tightly our long range financial forecasting to that, and our short term financial forecasting to the, again, for the long term planning. We increased the clock speed in the whole process, so something that we were doing once a year, we were doing four times a year, quarterly basis. Something that we were doing on a quarterly basis, we started to do a monthly basis, and this we did without now any technology, just improving our processes and ways of working. 

Mika Tulonen 0:08:36.3: 

We also spent a lot of focus on improving or strengthening our skills. We realized that there is a demand for strengthening that, and we started a training program, a business partner program, together with Aalto University, which is the leading university in Finland operating across technology, finance, and art. We had three modules over three years' time, each module taking about three to four months, focusing what is modern business, controlling business partnership, of course data, AI, and leadership and influencing. Around 100 persons went through this training program from finance, and in our case also from the risk management. Then we started the next, for the first technology part of our transformation. We started with modernizing the foundation, which means in our case that we made a greenfield implementation of our finance ERP. We basically built everything from scratch. New data models, modernized all the integrations, worked hard with the processes, streamlining them, and we renewed our chart of accounts. It may sound a very simple task to make a new chart of accounts, but if your starting point is with 17,000 accounts where you start, and you want to halve it, you can imagine that there is a few questions or discussions that goes in the organization for some time. 

Mika Tulonen 0:10:36.1: 

We even changed the language, so you can think about the company who has been operating more than 120 years in Finnish, and then comes some guys who said that, sorry, but now we will change the system language to English. There's a little bit of change management activities also needed or required in that phase of the project. At the same time when doing the project, we also built a center of excellence around the technology and the finance processes. Take the learnings from the project and use them when moving away from, or the next step from the project phase. Just the minor detail is that the implementation took place during COVID-19. Luckily, we didn't understand in the beginning that it's impossible to do this kind of project in a situation like COVID created, but we did about 80, maybe even 90 per cent of the whole nine-quarter project in remote mode, which required a quite a lot of innovation. That was also innovation, innovative ways of working, how to keep this kind of project together that lasted for nine quarters. At the end of the day, very successful launch, and actually nobody around the finance barely noticed that the major finance ERP system had changed. 

Mika Tulonen 0:12:13.0: 

When that foundation was in place, started the next phase, the connected enterprise, where Anaplan plays an important role for us, so it's the planning and forecasting system. Our aim was to create something different, something more than just a forecasting tool. Wanted to have something seamless, best-of-breed planning and forecasting solution for our purpose. We even had an innovative idea that, or let's say a wild idea, maybe innovative as well, but a wild idea definitely, that we might want to look at something about references from game designs. Something that would make the tool cool to use, fun to use. Something that people would like to use every day. When I come to the office, the first thing I want to do is that I open my Anaplan. Actually, I pretty much do that, I have to admit. Unfortunately, or fortunately, I don't know; unfortunately or fortunately, but then we decided to prioritize our time to market and we a little bit put that to wait for some other releases, this idea of looking at the gaming reference. Maybe later.  

Mika Tulonen 0:13:39.4: 

Anyway, after very careful evaluation, we then concluded that Anaplan, together with our implementation partner BearingPoint, provided the best fit for OP purposes to start the technical project. The project started at the end of '24, with tens and tens of design workshops. We had 11 streams working around it, all creating their own business logic. All in all, 100 to 150 persons all the time in the project, and in the peak time about 200, when the testing was ongoing and so on. I think, well, let's say I have been told at least that our implementation is one of the biggest in Finland, and it's built on Polaris. 537 days after we started the project - minutes I don't remember, but this I do - we actually went live with our first release. We realized that our scope was also that big that we have to split it into two releases, and the first one was actually now 2nd March, so roughly two weeks ago. Where we took into use a driver-based solution for our profit and loss area, our balance sheet, our personal planning, and then we also took into flight to our scope and activity based costing that we build up through the Anaplan. It was very interesting and good to see how fast you could actually adapt it, something that was not in the scope, but when the idea came, 'Why don't you do this as well and take from the old system and built it here?', so it actually took a few weeks. 

Mika Tulonen 0:15:40.5: 

We had a guy who had never done anything with Anaplan, so he went through a couple of model builder trainings, and he was pretty much able, with some support, to pull it together in very short time. When the Anaplan and the connected enterprise is there in place, it requires discipline from the processes, data, and data governance. This is where comes in the next wave, the fourth wave, data supply chain. When people understand how the data flows, where its source is, how it's processed, who owns it, I'm sure that the data quality will improve and the manual fixes will decrease, and eventually also the discussion move from the figures to the actions. In practice, this means for us that data requirements, data quality, data governance, is all agreed between the parties who are involved in this data value chain, and it's documented in data sharing agreements. The data quality is measured systematically throughout the chain, and we are now implementing a data quality issue management process that also actively takes care if the data quality is not what has been agreed, and also feeds to our process development further, if there are needed improvements. We could call this a continuous improvement process. In some parts of the world they might call it Kaizen, or Lean philosophy. 

Mika Tulonen 0:17:53.7: 

When all this is in place, we can say that we have one ecosystem, where data flows to decisions in one flow. An ecosystem where processes support decisions, technology reinforces ways of working, and finance coaches and inspires better decisions, and helps to take the organization further. Transformation started with a vision, but it exceeds in everyday life. When building the bridge from today to the future, you need a clear vision. You need strong support from your top management, from your colleagues. You need people who are committed to build the bridge and cross it as well, because every day in the transformation is not necessarily a shiny walk in the park. You have also those days that it's not that easy, and then you need to foster a performance culture. A culture where people share openly information. We foster collaboration and diversity, and a culture that values learning over perfection. Not to forget the cheerfulness throughout the journey, that for sure it's always needed. Everything is easier when smiling. This is how transformation takes place. Thank you for listening. I hope you found our story interesting and inspiring.