‘We have become our own customers’ — How Lucanet’s finance team collaborates

This is part one of a two-part series. Part two will be published on March 25.

Lucanet, the nearly three-decade-old German technology company focused on finance function solutions, has a leadership structure almost as CFO-centric as its product.

Their current CEO, Elias Apel, served as CFO until October 2023. Though he hasn’t replaced the CFO role he left vacant, much of the finance function’s responsibility is now led by Carsten Gerger, who was promoted to vice president of finance shortly after Apel was promoted to CFO.

What’s interesting about Lucanet is the company uses its own technology to run most of its finance functions. As Gerger put it, “We are our best customer at the end of the day,” so input from both him and Apel on product development, engineering, marketing and strategic planning — especially in the context of emerging technologies — is critical. Both are not only running a fast-growing, legacy technology company but are also tasked with having a direct hand in developing their offerings in a rapidly evolving space.

Finance’s impact on product development

While most CFOs purchase off-the-shelf products, Gerger’s ability to operate his finance function on his company’s own software services is pivotal. He noted that when he joined the company nearly a decade ago, the ability to test and provide insight on their products wasn’t as developed — but that has since become a tremendous upside for him and his team.

“When I started here, that wasn’t the case, but over the last few years, the finance team’s involvement in product testing and development has grown,” Gerger said. “We are always the ones testing our new products before they go to market, and that has been a really fun and unique part of my job.”

Collaboration, an effort many CFOs consistently encourage their finance teams to embrace, has become second nature within the organization, Gerger explained.

“As the business has grown, we have become our own customers, and testing our products, identifying small challenges before they hit the market and working with people outside the finance function regularly has been a way to keep our people happy, add value across the board and maintain enthusiasm about our products.”

Gerger’s perspective on the role of accountants is noteworthy, as a former auditor at PwC, he believes “expertise” in accounting is losing value.

“Of course, you still need a few accounting experts to make sure your finance function is running properly, but you don’t need as many as you used to,” he said. “Technology can allow finance to concentrate on taking our expertise, looking at the data and making decisions in real-time, making forecasts in real time and continuing to evolve the way we do things.”

Gerger emphasized that this is the essence of finance’s consistently changing role in business.

“Finance can’t continue like it did 20 years ago,” he said. “We need to be able to pivot, and that’s essential for not only our business but every business.”

Finance function development

Rewinding to 2023, Apel said this initiative was one of his main goals when he was CFO. Apel’s ability to operate the company’s finances while collaborating across the board and leading the transition from a founder-run company to an external leadership team was critical to enabling the finance function’s flexibility to collaborate with product development as much as it does now.

“When I came here and started as CFO, I brought the finance function into the commercial mindset that it was missing a bit beforehand,” Apel said. “But that was because we were a founder-run company. The finance function was managed by one of the founders before me, who, like many founders, was an expert in every aspect of the business.”

Apel said adopting a commercial mindset for the finance function followed a three-step approach.

First, he shifted finance from an on-premise, perpetual license model to a Software-as-a-Service and cloud-based model. As he put it, this “Had a massive impact on the P&L, on planning, the way we interacted with our customers, the way we analyze data and define our KPIs.”

Secondly, he moved the organization’s decision-making process from a centralized, “very traditional HQ subsidiary” into a “global matrix organization.”

“We needed to internationalize our decision-making processes,” Apel said. “We’ve moved away from that [traditional centralized HQ model], so now there’s much more autonomy in the business, but it needs to be done in a way that aligns all of our regions on our products, functions and financial framework.”

Finally, he said the mindset of the business needed to change, moving away from the founder-run, post-start-up business model.

“In a founder-run organization, the finance function can run a bit like a family office, because everything the founders have is tied into the business,” Apel said. “We had to transition out of that, invest a little bit more, expand our risk profile and analyze ROI differently. That process is always ongoing.”

Apel noted Gerger’s ability to successfully implement that transition in the finance function today.

“I think Carsten has done an amazing job of embedding that into his daily thinking and how he operates, and that is my recommendation to every business leader — make yourself as redundant as possible and always have a successor in place.”