CFO

Curated Insights from the Discussion on “The Modern Finance Leader: Navigating Risk In The Digital Era”

by Zoe Tuico on September 25, 2019 No comments

This month, The Ortus Club gathered CFOs, senior finance leaders, and finance managers from prominent companies in Kuala Lumpur to discuss, share, and theorise on navigating financial risks to a company in today’s digital era: specifically how transformation affects finance functions and the new responsibilities of financial leaders.

The discussion was held once again at Grand Hyatt, Kuala Lumpur, on September 12th, 2019. Present at the discussion were the following:

  • Alan Lew Head, Group Treasury of Wah Seong Corporation
  • Aravinthan Tharmaindran, CFO of IPG Mediabrands
  • Audrey Ho, Director of Corporate Strategy of Prudential Malaysia
  • Azizan Abd Aziz, CFO of Bank Islam Malaysia Berhad
  • Azizul Rahman Mohd Basir, CEO of Kub Telekomunikasi
  • Billy Ooi Giap Hwa, Deputy Head of Finance of Wah Seong
  • Chee Shean Wong, Regional Finance Manager & Head of Customer Service Centralisation of Wilhelmsen Ships Service
  • Ganeswaran Nadason, CFO of Terengganu Industrial Mineral
  • James Qiu, CFO of iflix
  • Kit Seong Lee, CFO of AEON Credit Service
  • Lily Ling Leong Shuang, Senior Manager Corporate Finance of Sapura Energy Berhad
  • Milind Jadhav, CFO of Pacific Inter-link
  • Mirko Dierks, CFO of Zuellig Pharma
  • Mustafa Shafiq Razalli, Senior VP, Finance of Bursa Malaysia
  • Sandran Govindasamy, CFO of India International Bank
  • Shyam Gowrikumar, Head of Finance of Hengyuan Refining Company Berhad
  • Sim Siew Chan, Group Financial Controller of Air Asia
  • Stan Zabolotsky, CFO & COO of Ta Win Holdings
  • Tan Ming Yew, Group Financial Controller of AmBank Group
  • Wilson Soon, CFO of TNG Digital
  • Wong Sheng Taur, CFO of Muda Holdings

The Modern Finance Leader: Navigating Risk In The Digital Era

Finance faces a tremendous amount of responsibility: aside from answering to shareholders, compiling reports, and overseeing resources, they now face a new duty in risk management. Coupled with the importance and ever-shrinking timetable that companies face for digital finance transformation, how can people in finance juggle their usual duties while looking out for an uncertain future in the digital age?

Three questions guided the discussion:

  • How should risk management be organized to deliver effectively?
  • How can transformation be delivered through digitization and ecosystems?
  • How does the modern finance leader cope with the evolving risks in this modern age?

The following article is a summation of the answers to those three questions, as well as other key points raised during the discussion.

Inherent Risks In Finance Transformation

Risk is an ever-present factor in financing. While the companies in attendance already agreed that they’ve taken steps to mitigate a lot of potential risks when it comes to finance, they also acknowledged that there are certain risks that will never go away. “Laws and regulations are an inherent risk that every company needs to take,” said one of the CFOs. “Compliance is never a sure thing.”

This need to be able to address potential issues on the fly brought up the subject of digital finance transformation – the ability to move old systems of financing to a more technical platform. Most CFOs agreed that this was a process that all their companies needed to undergo, but the pace at which they do it varied greatly from industry to industry.

Admittedly, the changing of finance systems can be considered a risk for many in the finance department – but it’s one that can be mitigated by having the correct personnel and systems in place to smooth over the transition. Some CFOs confidently asserted that they have already seen small-scale successes in their own organisations, and are slowly rolling out bigger changes.

Finance transformation may be the future for finance, but many have expressed concern that the changes may not arrive fast or as well-thought out as they could be. Timelines were the biggest issue, with some saying that their projections keep pushing back, and others saying that the demand for newer systems was something they struggle to keep up with.

Is Finance Properly Equipped To Understand New Technologies And Systems?

Personnel and technical expertise is at the heart of risk management, especially when it comes to finance transformation. While the finance managers in attendance had a closer look at the changes required from the ground up, the room agreed that the responsibility to act ultimately fell on the CFO: “it’s really up to us CFOs to take the initiative here – to align with what the company needs. We need to check what other companies are doing and what the market requires.”

This urgency for initiative when it comes to transformation strategies highlight one of the many challenges financing faces for risk management: the capacity for them to both do their usual duties and watch out for the signs that point to disaster. “It’s important to not transform things for the sake of transforming them, or just change things because you can,” stressed one CFO. “We need to do this smartly or not at all.”

Most of the room agreed with the need for training and connection between systems and control. The negative consequences of leaving inexperienced (or worse, fraudulent) personnel in key financing positions was a danger that everyone acknowledged. “Finance people don’t have the luxury of making mistakes – there’s too much at stake,” said one manager.

And while most were confident in their systems now, there was an agreed uncertainty with the systems that they have in their efficiency as time goes on. “Transformation is essential because the market changes so fast,” shared one CFO. Companies no longer had the luxury of upscaling operation or reshuffling resources when needed – they need to better with what they have, and mitigate the risks to what they can acquire in the process.

The Unique Challenge Faced By Companies In Their Respective Industries

However, some companies were more vulnerable to risks than others. Bigger companies in more regulated industries have a consistent urgency to always be one step ahead in their risk management strategies. Smaller, newer, and digital-first companies had more time and flexibility to react to potential changes, in addition to having a smaller stake in case things go wrong.

“Cost is what makes these things complicated,” said one CFO. As companies shuffle their resources and financing in order to address or mitigate risks, other areas will inevitably be affected. “The size of the company, the industry we operate in, and the regulations that we follow – all of these are factors in our finance transformation strategies.”

Shareholders are also a unique challenge: “How can finance tell the board members that they need to invest more to mitigate this particular risk?” shares one manager. Communication, another reveals, is always going to be a potential risk as well: “We need to figure out how adaptable our stakeholders are before we do anything major.” CFOs will need to balance the demands of the company with the demands of its investors – a task that many in attendance do not find easy, but necessary.

Conclusion

While the digital age has offered plenty of value for finance to more effectively oversee operations, it’s also allowed them a bird’s-eye view of the inherent dangers of unmitigated risk. CFOs and finance departments will need to quickly adapt to the tools and expertise required to navigate these dangerous waters – and in doing so, ensure their company’s survival.

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Zoe TuicoCurated Insights from the Discussion on “The Modern Finance Leader: Navigating Risk In The Digital Era”

Curated Insights from the Discussion on “Doing More with Less Through Innovation”

by Samuel Adcock on April 2, 2019 No comments

Last March 2019, The Ortus Club brought together 21 CFOs and senior finance leaders from prominent companies in Singapore to discuss, debate and theorise on the effect of innovation in the finance function, specifically discussing how the deluge of data is changing their roles and how they are adapting to these changes. The discussion was held at Artemis Grill and Sky Lounge on March 12, 2019. Chatham house rules were followed so while we are unable to assign specific quotes to the guests. Present at the discussion was:

  • Christoph Pestinger, CFO of DHL eCommerce
  • Frank Stevenaar, CFO & Co-founder of GoBear.com
  • Grace Lim, CFO of KK Women’s & Children’s Hospital
  • Julien Bera, CFO of Norbreeze Group
  • Ken Ajinkya, CFO of Rolls-Royce Marine
  • Len Wee, CFO of Moneymax Financial Services
  • Mabel Choo, Financial Controller of X-press Feeders
  • Mark Van Rooijen, CFO SEA of Randstad Singapore
  • Mike Gilfellon, Chief Administrative Officer (CFO & COO) of ING Bank
  • Odine Steemers, CFO and Director of Simitri Group International
  • Rajesh Shroff, Head of Finance of Adani Global
  • Rakesh Malani, CFO of Carousell
  • Richard Lai, Group CFO of Singapore Post
  • Rongjie Lim, CFO of Elitez
  • Ruben Stappers, CFO of Zalora Group
  • Stephane Thierry, Regional CFO and Director of Global Trading Company of Decathlon
  • Victoria Yong, CFO of SK Jewellery
  • Vivek Sharma, CFO & COO of Phronesis Partners
  • Wai Peng Low, CFO of Wildlife Reserves Singapore (Wilmar International)
  • Wenqi Chen, Head of Finance & Accounting of China Construction
  • Zichen James Qiu, Head of Finance/ Regional CFO – SEA/Japan/Israel of eBay

 

The CFO Group Discussion Participant Profile

Education

Other Countries of Education

 

Experience in Current Role

Estimated Annual Company Revenue

“DOING MORE WITH LESS THROUGH INNOVATION”

Joanne Flinn, the moderator of the night, jump-started the conversation by asking what innovations the guests have personally witnessed within their respective roles. The majority of the participants expressed that they have indeed experienced innovation within their roles, however, the degree to which the roles have changed often varied — some said it was a gradual change while others agreed that this change is taking place rapidly. Those from ‘digital born’ companies expressed witnessing the least amount of transformation within their role. 

The conversation continued as CFOs shared their transformation journeys and some of the key innovations that have taken place. Some of the participants agreed they felt pushed to innovate in the hopes of reducing operational costs, but at the same time improving and ensuring efficiency in their services. The following article is a short summary of the three key discussion points discussed throughout the night.

  • Data as a Driver of Change
  • Changing Role of the CFO
  • Adding value through data

Data as a Driver of Change

It was agreed that data has become more and more critical in any role but specifically with the finance function. This in turn has brought about the increasing importance of technology that can manage large data sets. But executives expressed that it hasn’t been easy for them to interpret, implement and to use these new technologies intelligently. One said, “With all the systems and programs present today, it is easy to say that data can easily be gathered but for the most part, it is about how these pieces of information are used. These must be interpreted and valued well in order to make the right decisions to drive business towards its goals.” This is why many CFOs have transitioned to acquiring new technologies that supplement and improve operations within their company. Some even admitted that data has become a driver of change, opening up new business models that are adjunct to these technologies and innovations. Examples of these include artificial intelligence and machine learning automation.

Changing Role of the CFO
The biggest factor contributing to the change in the CFO’s function is the growth of data. This then demanded a rapid adaptation to innovation, especially for more mature companies. As one participant said during the dinner, “In a way, we were threatened by born-digital companies hence, we were driven to implement end to end digital transformations across the whole value chain to be at par with our competitors.” Another added, “A lot of people doing the traditional leg work in our company were replaced with programs that could do the same tasks but with much more efficiency.” The participants then agreed that it was then vital to re-educate and retrain their teams to be able to adapt to these digital practices. Automation greatly contributed to the improvement of operations within a company, later causing a shift from CFO to COO roles, as some said.

‘The power of data and the possibilities it presents’ was an obvious factor in the evolution of the CFO’s role. But apart from this, increased expectations from the board and expanded control and compliance issues also played a part. One shared, “These factors cannot be dislodged from one another because any good board will always think of government compliance first and foremost. Hence, it is our responsibility to comply and at the same time, meet the expectations of the board.”

Many have also said that their role as CFO broadened in such a way that even customer experience, which was not traditionally a CFO role, became part of their scope of responsibility. When asked by our moderator Joanne if this was true, CFOs from retail companies responded with a resounding “yes.” One of them reiterated, “It has become vital to understand not only numbers but more importantly, what customers want and later, expected to drive actions to improve customer satisfaction.”

Although it is true that different organizations and spaces mean different experiences in the shift of CFO roles, one thought remained consistent among all CFOs: it is that their role isn’t just financial anymore. It’s also helping the rest of the business to make decisions in many different aspects. One shared, “Because of this, CFOs have no leeway in anything that happens. Whatever it is, it is and will always be our responsibility.”

Adding value through data
It is important to find reasons behind all the data that have been accumulated over the years. With all these technologies, the role isn’t merely adding or subtracting but interpreting and adding value to these data to make right and sound decisions. A CFO even humorously said, “Students who aspire to be CFOs must not study to be accountants anymore because technology in the future will be able to those tasks. The role isn’t just about numbers.”

CFOs want their business controllers to question the status quo and decide what can be done differently. The role is to make sure they know how to be compliant and to be able to distinguish evident changes. One continued to say, “the function isn’t small anymore, it has actually become a bottom line enabler.”

With this, CFOs are looking into implementing more key technologies to aid in end-to-end processes, from service to billing. When asked by Joanne what processes they are looking to automate, an executive said, “We are definitely looking into automating functions such as volume/working capital forecasting, fraud detection, billing, reporting and bank reconciliation.” Joanne affirmed this statement and added, “It is important, therefore, to hire the right people to operate these programs, put value in data and in turn, contribute in the attainment of the company’s goals and targets.” This allows employees to spend less time on things that could be done in a quicker way.

 

Conclusion
After the formal discussion came to a close, our guest continued the discussion amongst smaller groups over the main course and dessert. All in all, an interesting and thought-provoking discussion was held with guests sharing their best practices and experiences amongst the group. It was concluded particularly well by one guest who put it to the table, “Although the finance function has gone through an unmountable change in the last 10 years, the next 10 years will certainly bring an even greater pace of change. AI and machine automation will be sure to play a huge factor in this development and I for one can’t wait to see what’s next.”

We will be continuing the discussion at our next meeting which will be taking place in Malaysia on May 8th and in Singapore on May 30th. If you are keen to attend and become a member of the group, please apply to attend on the groups landing page here.

Alternately, if you have a particular topic you would like to see discussed. Please let us know through the form here.

Interesting quote from a guest: “CFOs need to be able to paint the picture of how the journey should look like, how it should be faced and how problems should be solved.”

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Samuel AdcockCurated Insights from the Discussion on “Doing More with Less Through Innovation”

Curated Insights from “The Changing Role of The CFO” Discussion

by Samuel Adcock on April 2, 2019 No comments

In April 2018, The Ortus Club brought together CFOs and senior finance leaders of prominent firms across the Singapore business ecosystem to share views on how their roles are changing. The paper below summarises the key takeaways of the discussion by exploring the main challenges faced by CFOs today – and how the CFOs plan to address them. As the discussion was held under the Chatham House Rule, we will not be revealing the identity of any participant.

[pdf-embedder url=”http://cfo-roundtable.ortus.solutions/wp-content/uploads/sites/2/2019/01/Changeing-Role-of-The-CFO-Ortus-White-Paper-compressed.pdf” title=”Changeing Role of The CFO – Ortus White Paper-compressed”]

 

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Samuel AdcockCurated Insights from “The Changing Role of The CFO” Discussion