The CFO at Johnson Brothers Liquor Co. discusses how his team got comfortable with moving off a legacy system and grew to embrace the capabilities of a modern financial system. He also explains how the CFO role is changing, and provides advice for young finance professionals.
Kevin Loegering is CFO at Johnson Brothers Liquor Company, a family-owned wine, spirits, and beer distributor established in 1953. Johnson Brothers is grounded in the old-fashioned values of hard work and a commitment to excellence, but it’s also a modern, progressive company that’s expanded from its Minnesota roots into 20 states.
A few years ago, Johnson Brothers realized its legacy enterprise system was not going to keep pace in the digital age, so it deployed Workday for financial management and human capital management. In this Q&A, Loegering discusses how his team got comfortable with such a big change and grew to embrace the capabilities of a modern system, including using Worktags to add dimensionality to information. He also shares his advice for young people entering the world of finance—including those with an eye on the ultimate job in finance, the CFO.
How has the digital age impacted your industry?
Our industry used to be pretty stodgy, but that has changed significantly. Most of our suppliers and customers have all moved away from paper-based processes and older systems, and have deployed or are starting to deploy much more advanced technologies. We knew that if we didn’t update our systems, we were going to fall behind. Now we will continue to grow with Workday.
“I’ve seen a lot more smiles on faces in the last few months.”
How does Workday help support growth?
Workday is broadly used and ingrained in our organization. You’ll often hear, “Look, we can do this in Workday.” It’s very exciting, because we now have that core foundation and can focus on making real organizational progress.
How would you contrast where Johnson Brothers is today compared to your previous legacy systems?
It’s a big shift for accounting; a different mindset. We simplified our account structure, and went from thousands of accounts that each contained smaller pieces of data, to less than 300 accounts that we can look at from every combination. Using Worktags to tag and then be able to view things from different dimensions has been an enormous advantage. Now the HR team can see relevant finance data, and the finance team can see relevant HR data, all within the security models built within Workday.
“We can now look at profitability per case, and the profitability of each sales person and division.”
What’s an example of that?
Sales is the heartbeat of our business—our customers include retail stores, bars, and big companies like Costco and Sam’s Club. The first question a manager might have is, how many cases did someone sell? But we can do a lot more than that. We can now look at profitability per case, and the profitability of each sales person and division. We’re doing a lot more internal analysis of how productive we are. We’re able to do this because all of our HR and finance data is in one system. The data provided, and information we have today at a detailed level, is significantly better than what we had prior.
What did your team think about getting a new finance system?
They were uncomfortable at first, but that’s understandable, because it was such a big paradigm shift. They’d been using the same system for nearly 15 years and had certain ways of doing things. I assured people that it was just another change, like other changes in the past that they ultimately grew comfortable with.
Now, we’ve all gotten much better at our jobs. We’ve scaled back the (financial) closing process significantly. It would take 15 or more days in the old system, and now we’re shooting for a five- to 10-day close. People have learned to use a tag rather than enter a journal code, and are delighted with all the information we have. It’s kind of opened our eyes to things that we weren’t really good at with our prior system. We get things tied up a lot faster than we had in the past—it’s the continual improvement of process and data.
“When I talk to young people going into accounting or finance, my advice is to always understand the data side of the business.”
Any other changes you’ve noticed?
We have fewer file cabinets on the premises because we hardly use paper anymore. I’ve seen a lot more smiles on faces in the last few months. People aren’t working late, are focused on what they can do, and we’re getting much better results.
With these new capabilities we’ve also been looking to hire people with more analytical skills. We pay a little more for those folks, but there’s a clear return on investment. And they really love their jobs.
What’s your advice for finance professionals in today’s world, particularly those who want to be CFO some day?
When I talk to young people going into accounting or finance, my advice is to always understand the data side of the business. Where is the information in your finance system coming from? How did it get to where it is? The quality of the data is really important.
The CFO role requires much more operational knowledge than in the past, and also technology acumen—understanding the systems and the data. Only then can CFOs know how to use information as they go forward with running their operations.
“The CFO job is taking on many operational responsibilities more typical of the CEO.”
Does that include working more closely with the CIO?
Absolutely. At Johnson Brothers, our CIO and I have worked together to drive a lot of the strategy around systems and projects. At the same time, the CFO job is taking on many operational responsibilities more typical of the CEO, such as projections and getting closer to your partners—which for us is our suppliers—and your customers, as their expectations are much greater these days. That’s why information and visibility is so important to the job.
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