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How transformation can go this smoothly in a company this big

Client

Albertsons

Industry

Consumer retail - Grocery

Primary goal

Unifying disparate Finance and HCM functions after numerous acquisitions

Primary solutions

Oracle Cloud KPMG Powered Enterprise

Albertsons and KPMG are making a difference

You don’t become the second biggest grocery retailer in the U.S. by thinking small. Albertsons’ ambitious, well-executed acquisition strategy helped grow its four core businesses, 24 brand banners, more than 2,200 stores, 19 manufacturing plants, 22 distribution centers, and staff of more than 290,000 employees. Of course, it also left the company with disparate processes and legacy systems across numerous divisions and subsidiaries. Undertaking a single, accelerated digital transformation of both Finance and HCM was a bold move. But having the right people on board made all the difference.  

OUTCOME HIGHLIGHTS

Making a measurable difference

One, cloud-based

Finance and HCM solution serving more than 2,200 stores, manufacturing, distribution, and global operations

One simplified

and standardized operating model powers Finance and HCM across the enterprise

Redesigned

chart of accounts to fully support omnichannel as well as insights driven management and finance reporting

Significant increase

in no-touch balance sheet reconciliations

One standardized

profit and loss (P&L) statement per line of busines versus many historical variations by banner and geography

One high-performance

solution powers recruiting, learning, compensation, and more

Client transformation journey

Click on each part of the journey to learn more about our client’s transformation.

“Incredible execution, everyone! The teamwork on this is nothing short of amazing. Thank you so much for your dedication to making this successful.”  

Rob Larson

Chief Accounting Officer, Albertsons Companies, Inc.

Albertsons HR leaders speak to the power of Oracle HCM and KPMG

Albertsons had an ambitious vision. We found the insights to make it a reality.

We leveraged our deep retail experience, Alliance with Oracle, and a five-phased approach to redesign Albertsons’ Finance and HCM operating models.

1. Vision Phase
Seeing through the eyes of more than 1,200 stakeholders  

KPMG assembled a team that included specialists with deep experience in the retail industry and who had already configured KPMG Powered Enterprise to quickly solve retail-specific challenges. Issues such as chart-of-account redesign, multidimension P&Ls, allocation strategies, union compliance, high payroll frequency, and a semi-distributed HCM operating model were all familiar. 

Through face-to-face workshops, surveys, and data analysis, KPMG and Oracle gathered information from Albertsons stakeholders in Finance, HCM, and Information Technology (IT). We developed a deep understanding of their platforms, processes, reporting capabilities, and how it all served the people responsible for driving performance and growth. It became clear that Albertsons required an operating model powered by a modern, digital platform and capable of supporting a portfolio that spans its retail grocery, real estate, manufacturing, and supply chain businesses, all while reporting results that could by trusted by Albertsons management, shareholders, and the capital market at large. 

Working together with Albertsons, we identified numerous opportunities across the organization: 

See the opportunities

Company-wide opportunities

  • Replace aging, on-premises applications, data stores, and point-to-point integrations that differed across divisions and functions
  • Reduce manual, disparate processes, freeing up more resources for insights and analytics
  • Enable enhanced management/financial reporting and make it more widely available across the enterprise
  • Act with greater speed and agility to capture value in operations and acquisition integrations 

Finance opportunities

  • Redesign the chart of accounts to drive more valuable insights in a rapidly growing omnichannel business
  • Process more than 60 million transactions per month with greater accuracy and efficiency
  • Optimize reconciliations and transaction matching, freeing up valuable capacity for resolving anomalies
  • Enable new finance and accounting analytics and insights across the business
  • Migrate towards a continuous close
  • Control rising finance function costs while deriving greater value and support for the organization

HR Opportunities

  • Improve technical capabilities to keep pace with increased hiring needs
  • Reduce dependence on IT and tech resources for supporting and enabling continuous compliance with more than 800 collective bargaining agreements
  • Unify and automate workforce administration processes across the enterprise
  • Eliminate the need for employees to learn new systems and interfaces as they move from recruitment to training to managing benefits
  • Improve HCM’s ability to govern and make system improvements
  • Reduce HCM tasks at store level by allowing employees to easily manage their own benefits via a mobile app.

2. Validate Phase
Working through questions together—in the throes of a global pandemic

The emergence of COVID-19 forced the team to quickly adjust to working in the virtual world. Brand new questions—like how to conduct an effective design session with 120 people, virtually—were answered quickly to maintain momentum. Together, Albertsons, KPMG, and Oracle dove deep into what this new digital platform would look like and how it would serve everyday needs as well as those “blue moon” events that occur only rarely, but that the system still needs to accommodate. 

Based on the preconfigured Target Operating Model (TOM) of KPMG Powered Enterprise, the new solution would draw on leading practices, learnings, embedded controls, and accelerators from other deployments. Albertsons validated it against their business and determined how these new processes could be embraced across the enterprise and what the impacts could be. This was a very strategic shift from a “How will the solution support our current requirements” mindset to, “Why won’t this new way work for us?”

Embracing a new TOM

3. Construction Phase
Building the processes and solution it takes to support a modern, digital platform 

Using the KPMG Powered solution coupled with our industry, functional, and technical domain experience provided an enormous jump-start to the construction phase, while still allowing for tailoring and personalization. Leveraging Oracle Cloud applications and technology stack, the team configured the modules, built development objects, and iteratively pressure tested and improved upon them through structured test cycles. The result was an operating model and solution that could achieve the objectives identified in the Vision and Validate phases.

KPMG helped design and implement initiatives across the enterprise that helped drive successful outcomes: 

Explore the initiatives

Company-wide initiatives

  • Replace aging, on-premises applications, data stores, and point-to-point integrations that differed across divisions and functions 
  • Reduce manual, disparate processes, freeing up more resources for insights and analytics  

  • Enable enhanced management/financial reporting and make it more widely available across the enterprise 

  • Act with greater speed and agility to capture value in operations and acquisition integrations 

Finance initiatives

  • Redesigned the chart of accounts, combining retail and corporate close, working to reduce the close period, and supporting enhanced reporting
  • Redesigned the financial data model, implementing hub-and-spoke cloud integration across more than 90 interfaces with hundreds of sources
  • Enhanced financial operational reporting through expanded self-service capabilities and embedded analytics leveraging Oracle
  • Transactional Business Intelligence and Oracle Enterprise Resource Planning
  • Empowered analyst capabilities with exception-based views and reduced the reliance on large data extracts
  • Consolidated numerous business key performance indicator requirements with our Powered Dashboards, providing real-time metric visibility for AR, AP, and Procurement transactions
  • Improved store-level inventory reporting with a fully automated calculation and results delivery process
  • Designed workflow processes, including automated preparation and approval, supporting the integration of Oracle Account Reconciliation Cloud Service as the global reconciliation and transaction-matching tool
  • Consolidated and rationalized P&Ls across lines of business, reducing the total number from more than 100 to 4 (one each for retail, ecommerce, manufacturing, and distribution)

HR initiatives

  • Deployed a custom application for union-rule processing, enabling a single HCM platform to administer benefits to all employee populations under more than 800 complex union agreements 

  • Helped guide development of a platform able to support a 10 percent increase in hiring volume 

  • Created a digital-first, digital anywhere experience resulting in higher employee engagement  

  • Reduced new-hire onboarding time  

  • Streamlined and improved the integration of new employees post acquisition 

  • Helped integrate processes and technology across the employee lifecycle from recruiting through compensation and performance 

  • Improved HCM’s ability to make continual system updates in response to changing needs via quarterly updates 

      4. Deploy Phase
      Helping 290,000 employees embrace a new platform and processes 

      Transitioning employees from the aging legacy systems they’re familiar with to a new, modernized platform takes preparation. KPMG developed and executed a change management framework that helped Albertsons effectively manage communications and training for 290,000 employees across 2,200 stores, 19 manufacturing plants, 22 distribution centers, and several back-office locations.

      Leveraging KPMG accelerators and many related technology platforms, KPMG helped coordinate the move to off-premises solutions coupled with the Oracle cloud and technology stack:

      • Oracle Enterprise Resource Planning (OM, AR, PO, AP, FA, PA, GL, CM) 

      • Oracle GoldenGate/Integration Access Cloud Service 

      • Oracle Integration Cloud  

      • Enterprise Data Management Cloud Service 

      • Oracle Account Reconciliation Cloud Service  

      • Financial Consolidation and Close 

      • Enterprise Planning and Budgeting Service 

      • Oracle Transactional Business Intelligence 

      • Deployment of Oracle HCM Cloud for Core HCM, Wage Progression, Learning, Workforce Compensation, Recruiting, Onboarding, Nextgen HCM Help Desk, Career Development, and Goals/Performance Management. 

      Supporting change management

      5. Evolve Phase
      After the platform is live, active collaboration continues  

      The Albertsons, KPMG, and Oracle teams continue to have regular collaboration sessions. As Albertsons becomes more familiar with their Oracle Cloud platform, they envision new capabilities it could enable. As data comes in on performance, workflow, and user satisfaction, Albertsons and KPMG fine-tune processes and identify ways to continuously improve, responding agilely to new business and technical challenges, and making the most of Oracle updates and new functionality:

      Looking to the future

      Company-wide vision

      • Continue to enhance analytics-driven planning and forecasting 
      • Optimize the supply chain 

      Finance vision

      • Achieve a continuous, virtual accounting close 

      • Increase data mining insights and monetization

      HR vision

      • Establish a continual feedback-and-improvement loop based on quarterly HCM reports from the field and deployment of new capabilities

      • Migrate payroll, benefits, and absence management to Oracle cloud for 2023

      • Insource benefits administration

      Today’s supply chain: A source of resilience and growth in consumer and retail

      Our continued work with Albertsons includes a focus on supply chain optimization. From disruption mitigation strategies to increased supply chain sustainability, KPMG is at the forefront of the challenges and opportunities to be found in today’s consumer and retail supply chain, and how they can help foster resilience and growth. Get our perspectives on key topics.

      Talk with the team that made all the difference for Albertsons

      Let’s talk about your own transformation ambitions and how we can help you get there. KPMG. Make the Difference.

      Image of Michael P Bek
      Michael P Bek
      Principal, Advisory, Finance Transformation, KPMG US
      Image of Chris Lynch
      Chris Lynch
      Principal, Advisory, Human Capital Advisory, KPMG US

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