This article was first published in the September China edition of Accounting and Business magazine.
For two days every June, I have the pleasure of chairing the CFO Innovation Forum in Singapore, an annual event attended by some 300 chief financial officers, financial controllers and other senior finance executives across Asia. It’s a good opportunity to get a reading of how the region’s businesses are doing – and how finance professionals are handling pain points and the various challenges confronting them.
This year everyone was focused on the economic slowdown in China and the impact on other Asian economies. Economist Rajiv Biswas, who discussed the macro-economic picture for 2013 and beyond, thinks China and Europe will likely cause short-term disruption, but he continues to believe that Asia’s long-term story remains intact.
Some CFOs were sceptical. But as the finance chief of an emerging Asian multinational told me after Biswas’s presentation, ‘my job is to manage finance throughout the business cycle’ – regardless of whether the economy is in recession or in growth mode, or just marking time, as Japan’s has been doing for decades.
After all, the region’s companies have survived the 1997 Asian financial crisis and various other disruptions, including the 2008 global financial crisis. It is the very poor finance function and CFO that fail to draw the right lessons from all these crises.
Two other topics resonated strongly with the CFOs at the conference. I noted heightened interest in Shared Services Centres (SSCs) and third-party BPO service providers, and in technologies that enhance the timeliness and accuracy of analytics, business intelligence and business planning.
Outsourcing is certainly not new in Asia. Many enterprises, particularly the regional arms of US and European multinational corporations, have transferred out transactional processes such as payables and receivables to intra-company SSCs and third-party business process outsourcing (BPO) service providers – primarily as a cost-cutting measure.
That’s changing. What emerged from the discussions on and off the stage was that finance is beginning to look at SSCs and BPO partners not only in the context of expense reduction. CFOs are parcelling out processes to free up time and capabilities for higher value tasks, including the aforementioned analytics, BI and planning.
Gaining that space is just the first step. The freed-up finance department must then proceed to make sense of the reams of data, both digital and unstructured, that every business generates for clues as to how the enterprise should move forward.
This explains the interest at the conference in enterprise software that promises to do just that, and in platforms like cloud computing that promise to deliver those tools rapidly and cheaply.
Nobody underestimates the complexities, which is why those further in the journey, such as Vincent Liew, global CFO of design practice Aedas Group, were in high demand. After listening to Liew’s presentation on how he and his team implemented a dashboard management solution, financial controller Helen Chan said she was ‘inspired’ to look into doing the same for her company, Nordic Maritime.
All that said, some cautioned against forgetting what finance is really about in the enthusiasm for technology and becoming a partner to the business. ‘You have to start with the core,’ said one finance professional, ‘simple things like a global chart of accounts and having your processes aligned’. Analytics and data mining are fine, but core accounting is still what is important, he stressed.
If the buzz during the breaks is any indication, however, we will be hearing more about technology (including the desirability of ditching Excel) and the associated issues of security, cost and IT literacy in finance in future conferences.
Cesar Bacani is editor-in-chief of CFO Innovation Asia