How to reduce costs and increase efficiency and improve decision-making efficiency through effective financial reform has become an urgent problem for many enterprises. As a leading Internet company in China, Meituan has accumulated rich experience in the construction of financial sharing centers. This article will provide an in-depth analysis of the construction background, history, key points, challenges and coping experiences of Meituan’s financial sharing center, and provide valuable reference for other enterprises on the road of financial transformation.
Yesterday, the leader asked about the relevant content of the financial sharing center, but he did not answer for a while. Afterwards, I flipped through my notes in Meituan, and then recalled the bits and pieces of participating in the construction of Meituan’s financial sharing center, although it was not the main R, but as a member of it, I did not do a good job of summary and review.
01 Construction background
After the merger of Meituan and Dianping, the scale has expanded rapidly, especially after the listing in 2018, the business has rapidly expanded to takeaway, in-store, wine tourism, community group buying and other formats, each business has a different organizational model, finance in order to quickly support business development, in the region and even the province and even the province has deployed financial branches, this traditional decentralized financial management is facing challenges:
- Efficiency bottleneck: Before 2018, the monthly settlement cycle was as long as more than 10 days, and the fragmentation of business and financial data affected the timeliness of decision-making;
- Cost pressure: The business covers 2800+ counties and cities, and the financial and labor costs increase sharply with the growth of scale;
- Compliance risks: Differences in tax policies in many places make manual operations error-prone.
- In this context, Meituan officially launched the Financial Sharing Center (FSSC) construction project (hereinafter referred to as FSSC or project) in 2019, with the goal of achieving “cost reduction, efficiency increase, and risk control” through centralization and digitalization.
02 Construction history
The FSSC is planned by President Zhu Minghua, vice president of finance of Meituan, formulating strategic planning and coordinating resources; Meng Hongzhong, chief financial officer of Meituan, is responsible for the specific implementation, design process and system architecture, and the product side is responsible for Luo Dingluo. It is based on Oracle EBS and is self-developedFinance Middle Office (Midway)Realize the docking with business systems (such as takeaway order system, merchant settlement system).
To achieve these three challenges, product managers will only continue to appreciate
Good product managers are very scarce, and product managers who understand users, business, and data are still in demand when they go out of the Internet. On the contrary, if you only do simple communication, inefficient execution, and shallow thinking, I am afraid that you will not be able to go through the torrent of the next 3-5 years.
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The project is divided into three phases:
Phase I (2019~2020): Priority is given to those with a high degree of standardizationAccounts payable and expense reimbursementprocess, piloted in North China and East China.
Phase II (2021~2023): It is a comprehensive promotion stage, including business lines such as cycling, innovative business (drones, etc.), in-store, and home-to-home.
Phase III (2024~): It is the intelligent stage, including the application of AI technology to identify fraud risks in reimbursement, which is still in progress.
(The picture comes from the Internet and has nothing to do with the text)
03 Key points of construction
1. Four unifications
That is, “unified policies, unified processes, unified subjects, and unified accounting”.
The formulation and interpretation of all accounting policies under the group are transferred to the expert group, requiring all entities to follow unified accounting policies, including asset recognition, depreciation methods, tax treatment, etc.
Process unification refers to the standardization of repetitive financial processes (such as reimbursement, collection, payment, etc.) scattered across various branches within the group, forming a unified operating specification, and realizing the whole process from the business end to the financial end.
Unified subjects refer to the detailed accounts of each entity under the group under the framework of the headquarters, and it is prohibited to adjust the main subjects above level 3, and can be flexibly adjusted at level 4 and below. This treatment not only ensures a certain degree of standardization of the subject, but also gives each subsidiary a certain degree of flexibility to prevent the situation of “chaos as soon as it is released, and death when it is managed”.
Unified accounting refers to the use of the same accounting treatment method for homogeneous businesses within the group to ensure the consistency of accounting results. For example, unify the accounting rules for related party transactions to achieve data management of “counting out a hole”.
2. Organizational change
The “organizational change” of the financial sharing center refers to the construction of a new financial system that adapts to the shared service model by reconstructing the financial organizational structure, functional division and management model, and its core goal is to realize the professional division of labor, standardized processes and efficient collaboration of financial functions. Specifically, it is manifested in the following three aspects:
a. Organizational structure restructuring: integrate the traditional financial teams scattered in various regions and regions into the “three pillars” structure of strategic finance, business finance and shared finance. By centralizing standardized and repetitive accounting operations (such as expense reimbursement, accounts payable, etc.), the sharing center frees up the energy of business finance personnel to focus on strategic analysis and risk management. Among them, strategic finance focuses on budget control and management reports that support strategic goals; Business finance, that is, financial BP, is held by financial students who understand both business and accounting professional knowledge, and go deep into various business lines such as store, home, cycling, etc., convey strategic goals and implement business spirit, and achieve “let people who need artillery fire call for artillery fire”.
b. Functional transformation and standardization: The financial sharing center divests the basic accounting function, promotes the transformation of financial personnel into “value creators”, and undertakes high value-added work such as data analysis and decision support.
c. Management model innovation: adopt a combination of “sustaining change” and “disruptive change” strategy: optimize and stabilize the transition through gradual processes in the early stage, and introduce intelligent technology (such as RPA document review) in the later stage to achieve disruptive efficiency improvement.
3. Technology
Meituan’s finance-related system tools are responsible for the Meituan finance platform, and the technology here refers to the digital and intelligent tools and systems that support its operations, includingERP system, RPA (Robotic Process Automation), AI, cloud computing, big data analyticsWait. With the help of Meituan’s strong technical strength, the FSSC’s predetermined goals have been successfully completed. At the same time, reconstructing financial processes through automation, standardization and intelligent tools is not only to reduce costs and increase efficiency, but also to promote the transformation of finance from “accounting” to “strategic”.
4. Cultural system
Cultural concept:
Advocate “finance is like water”, requiring financial personnel to transform from “Mr. Accountant” to business partners, deeply participate in business decision-making, and provide data support and risk warning;
System and process:
a. Introduce SLAs (Service Level Agreements), formulate Business Process Manuals, clarify operational specifications, quantify processing timeliness and user experience, such as 24 hours for expense reimbursement processing ≤, and include overtime rates in team KPIs.
b. Establish a three-level financial responsibility system (strategic finance, business finance, and shared finance) to achieve division of labor and coordination;
c. Set up a “Data Quality Award” to motivate employees to improve the accuracy of master data.
04 Challenges and experiences
Let’s talk about the challenges first, Meituan’s many formats, complex business, and large amount of data are rare in the industry. The main problems encountered are:
1. Data quality: including inconsistent data standards and uneven data quality, such as inconsistent data interfaces after merging with Dianping, and integration takes more time than expected; For example, the same field has different meanings in different systems, resulting in errors after docking, and there are many problems with master data.
2. In terms of organization and culture, the construction of FSSC means that the financial personnel who have sunk to the districts and counties will be canceled, the regional finance team will be reduced, and the changes in power and interests will cause some financial students to fluctuate their thoughts and cooperate passively.
3. Technical risk, although the technical force supporting the financial line is not weak, it is indeed a challenge to integrate multiple systems in a short period of time and ensure that the existing financial business such as daily accounting and monthly settlement are carried out normally. There have also been small accidents in the middle (don’t ask about the specific content), but fortunately, they have been resolved without danger, and I would like to thank the technical team for their leaders
To talk about experience, in fact, it is common with other major projects, first of all, it is the strong support of the top management, the leadership attaches importance to it, and it must be the top project, so that resources can be mobilized and conflicts can be resolved in time.
Secondly, it will be promoted step by step, first as a pilot, and then comprehensively promoted after exploring the optimization of experience. There is a saying called “rigidity first, then solidification and then optimization”, don’t ask for “the best and best” or “industry best practices” as soon as it comes up, and those who put forward this requirement either have not done a technical project or are good at it (do not accept refutation). The 8 billion people on the earth cannot find the exact same appearance, let alone enterprises, each company also has the characteristics of an enterprise; Even if it is the best in the industry, the best must be defined by others as suitable for your company; The correct solution is to combine industry experience with the actual situation of the enterprise to find a suitable solution for the enterprise.
Finally, before building FSSC, do a good job in basic skills, such as financial informatization is basically completed, eliminate most of the manual operations of finance, and whether all accounting business is systematically carried; For example, whether data governance has been completed or carried out, and whether the integration of industry and finance is being promoted or put on the agenda. FSSC is not only a pioneer in financial digitalization but also a pioneer in financial digitalization, achieving the ultimate goal of data-driven decision-making.
