ISSUE 04/2013 PP 18011/02/2013(033327) CHARTING THEIR ROAD TO SUCCESS

Transcription

1 ISSUE 04/2013 PP 18011/02/2013(033327) CHARTING THEIR ROAD TO SUCCESS

2 From AICPA and CIMA comes a new global designation. The American Institute of Certified Public Accountants and Chartered Institute of Management Accountants proudly announce the creation of the Chartered Global Management Accountant (CGMA) designation, to elevate the profession of management accounting. Demonstrating management accounting expertise, determination and commitment to achieving sustainable business success, CGMAs are trusted by businesses worldwide to guide critical decisions and drive strong performance. CGMA delivers the financial expertise companies demand. And the performance excellence they deserve. Find out more at cgma.org

3 Publisher Chartered Institute of Management Accountants Level 1, KPMG Tower 8 First Avenue, Bandar Utama Petaling Jaya, Selangor Malaysia T. +60 (0) F. +60 (0) EDITORIAL Editor Chan Siew Lian Contents FEATURE 2 One strategic move at a time Writer Suki Goh Design & Layout Ireka Studio E-5-06 Neo Damansara Jalan PJU 8/1, Damansara Perdana Petaling Jaya, Selangor Malaysia E. irekastudio@gmail.com 9 The quintessential CFO Photography Meor Mazlan RecoMmended ARTICLES CORPORATE Regional Director SE Asia and Australasia: Irene Teng irene.teng@cimaglobal.com Head of SE Asia: Venkkat Ramanan venkkat.ramanan@cimaglobal.com 11 Understanding reputational risk MARKETING AND CommunicationS Regional Marketing Manager: Choong Kok Leong Manager: Chan Siew Lian Executive: Choong Siew Cheng Operations Assistant: Meor Mazlan Send your comments and feedback to: SEAsia@cimaglobal.com 13 Turning data into insight

4 FEATURE One strategic move at a time From the moment Wan Haslan stepped into the Audit and Business Advisory Services Department of PricewaterhouseCoopers as a fresh graduate, he was following the visionary career plan he had set for himself. This plan eventually led him to become the Chief Financial Officer of Iskandar Investment Bhd. From the outset, Haslan planned to be in the industry and not in public practice, but he understood the importance of building a good foundation in accounting and finance and his formative working years thereafter gave him an edge over his peers. In 1991, after graduating with an accounting and finance degree from

5 Inspire 3 Lancaster University in the UK, Haslan returned to Malaysia to take up an audit and business advisory job. I had an opportunity to work in the UK after I completed my studies. However I decided to come back to kickstart my career as I had already secured an offer from PricewaterhouseCoopers in Kuala Lumpur, Haslan explained. The first job was ideal for him as it offered a great technical foundation for his career plan of being a business manager. Apart from the technical know-how, the role also equipped him with the skills needed to understand and help organisations from different industries. The nature of the job also widened his contacts and professional network. Planning towards success After three years at PricewaterhouseCoopers, Haslan left for the then Amanah Merchant Bank, now part of the Alliance Banking Group. In this second job, Haslan learned the ropes of raising funding and structuring companies to maximise their appeal to banks. In the investment bank, I was in the Capital Markets Department, which was involved in raising funds from the market using various funding instruments. It involved looking at the business of the company and giving advice on the structure of the business in order to appeal to financiers and therefore optimise financing amounts raised and minimise financing costs, he said. After two years there, Haslan joined MARDITech Corporation in 1996, where he remained for 10 years getting practical experience in running all aspects of a business. His role there allowed him to get involved in joint ventures and the selling of technologies, and learn the licensing side of technologies. My time at MARDITech Corporation gave me a good grounding in deal-making, leadership and building a business from scratch. In this job, which was essentially a technology commercialisation company, I was involved in deal-making, setting up of companies and selling technologies on behalf of my shareholder, a research institute. My stint at these first three jobs really gave me a strong foundation that made me what I am today. In order to really go ahead in life you need both the hard and soft skills. My first two jobs provided me the hard skills. My third one provided me the soft skills. I could not have progressed where I am today without my first three jobs, affirms Haslan. In order to really go ahead in life you need both the hard and soft skills. My first two jobs provided me the hard skills. My third one provided me the soft skills.

6 4 Inspire It was all pre-planned, he chimes. Eventually I wanted to be a business manager, but I wanted to build my accounting skills and networks - that is why I joined PricewaterhouseCoopers. The next step was to get a good base in fundraising and networking among the banks, because financing is the lifeblood of organisations. And the next jump was into the industry; I joined a start-up so that I could be involved in the business from A-Z. I wanted to be in all facets of the business operations so that I could develop beyond the mindset of an accountant to that of a business manager and entrepreneur. Why an entrepreneur s mind-set? Because I wanted to be comfortable solving problems and providing solutions for all aspects of a business instead of just for the accounting function. It makes me a more holistic business solutions provider. CIMA S Push Having undertaken the CIMA qualification on a part time basis during his tenure at MARDITech Corporation, Haslan sees a direct connection between his ability to progress his career, and the strategic thought process instilled in him throughout his undertaking of this qualification. What I wanted was to eventually become a business manager with a strong accounting background. The CIMA syllabus is structured in such a way that enables me to think strategically instead of just technically. The Case Study paper really attracted my attention and was a very important factor that made me choose CIMA.

7 Inspire 5 Taking the exams while working was challenging and involved personal sacrifices. The experience definitely made me stronger. I learned to act in spite of fear, to be proactive in spite of my mood, to be willing to do what s hard now in order to have it easier later in life, to think bigger than any problems or obstacles, and to never give up, he says. According to Haslan, the CIMA qualification and membership has helped him in three ways networking, marketing and credibility. I want to be in an environment where I can meet with like-minded peers. The CIMA membership is not just about the technical know-how; more importantly, it s about reaching out to other CIMA members in strategic positions, not only in Malaysia, but also overseas. That is the value of the CIMA qualification, he explains. Attributes for success Haslan, also an MBA holder from the International Islamic University of Malaysia with a Best Student Award in the finance specialisation, believes that the skills and attributes that enable one s successes in the workplace are soft skills combined with a clear and positive emotional state of mind. Hard technical skills are quite secondary. Business is about people first and how you treat them. That determines your success in sealing a deal or solving a problem. Numbers are important but they are there only in a supporting role. He adds, The emotional state of mind is very important. It allows empathising and connecting with people. It also enhances your ability to handle pressure which comes from all directions and increases in intensity as you move to the top. Business is about people first and how you treat them. That determines your success in sealing a deal or solving a problem. Numbers are important but they are there only in a supporting role.

8 6 Inspire The emotional state of mind is very important. It allows empathising and connecting with people. It also enhances your ability to handle pressure which comes from all directions and increases in intensity as you move to the top. What I went through in my third job gave me experience in identifying, negotiating and closing deals. One may not be the best in technical skills, but one should be able to ask the right questions and identify the right answers to get the job done. And CIMA has also helped me with this immensely. Haslan s career path so far has spanned six companies over a period of 22 years. Even though he was meticulous in his choice of his first three jobs to ensure he could acquire the experience he was looking for, fate then came into play to channel him into the property industry which he has learned to love and be very passionate about. The 45-year old has a good number of proud moments and no regrets. With only two years in his current role, he feels he still has a lot to achieve, in this as well as in future endeavours. As a person, I can never be satisfied. After achieving what I have, there are still many plans ahead. In the future, I aspire to be a CEO, which is the pinnacle of being a business manager. And that will come with a new set of challenges. My CIMA experience has taught me to always go for business-building initiatives and apply strategic thinking in whatever I do. The CIMA mind-set has made me think about the big picture and about being more than a CFO, says Haslan. So what advice does Haslan have for those aspiring to have a great career? Invest in education it s the best investment that you can make and no one can take it away from you. After that, you really need to look at what you want to do and execute your vision. Your first job may not be what you want to do, but with a vision and plan, you can tune it to benefit your career progression and move towards your dream. Whatever step we take in our initial years, will have an effect in our later years, so have a vision and make your choices according to it. This article is courtesy of Leaderonomics Media.

9 Inspire 7 The Quintessential CFO Chari TVT, 57, was born in India into a middle class family whose emphasis was on holistic learning. His parents did everything within their means to give him and his siblings a good education which they knew would reap dividends later in life. They even suggested giving up his promising cricketing career in order to focus on his studies. After completing his Bachelor s Degree in Commerce, Chari pursued Chartered Accountancy (ACA) and Cost Accountancy (AICWA) qualifications simultaneously, finishing both in He also holds an MBA from the State University of New York at Buffalo. He has been married for over 25 years and has one son who studied medicine at Oxford University, UK.

10 8 Inspire Turning point The decision to join Digital Equipment Corporation (DEC) landed Chari in a manufacturing plant environment again. DEC, being a US based multinational corporation, enforced the highest ethical standards and this concept was drummed into this eager new financial controller since his first day there. Chari interacted with Government officers where his resolve to remain ethical was tested. You have to stay firm, follow the process and do the right thing and that got into my DNA thanks to the values provided by my parents and strongly enforced by the company I was working for. The highest ethical standard means that you cannot break or bend the rules. It is a tough experience, but what it tells you is that if you re consistent in your value system, in the long run, your character is beyond reproach. Then your career is built on the foundation of highest values and integrity, says Chari. Sink or Swim Chari s current position as Chief Financial Officer (CFO) of Celcom is not unfamiliar to him as he was thrust into the position of leading the finance function very early in his career. In addition to being responsible for the company s financials, I was also exposed to a lot of sales early in my career, he says, recounting his stint in a leasing company. Since leasing was a new concept at that time, one of my proudest moments was when I managed to close a deal in which a fleet of 55 cars was leased to a large company, he adds. Chari, who does not believe in getting too used to his comfort zone, decided to move on from the leasing industry. He marched head-on into the factory environment of Union Carbide. In any environment you need to understand the business inside out. Only then can your career progress, opines Chari. He was based in Calcutta and Chennai, and after the Bhopal incident he moved on to the next chapter of his life. The responsibilities of a CFO After successfully spending four years supporting various business units in Hong Kong, Chari was given an option to go to DEC s headquarters in Singapore or one of the countries it was operating in. He chose the latter, and was sent to Malaysia where he spent 2 years as CFO of DEC Malaysia. Chari s maturing as a CFO imbued him with new skills and business insights that enabled him to progress even further. The question always is: What value can you add to the business? You re successful only if you add value to the business. It s critical to add value to the top line including pricing, bottom line, culture, strategic and business control environment of the enterprise. Business partnership Supporting the business, early warning, helping drive incremental revenue, reduce wastages, pricing, helping to make decisions based on

11 Inspire 9 data are key success factors for any finance professional. Now, business partnership does not mean saying yes to everything the business managers want. Many a times you can say no. A good example would be on the day I walked into DEC in Malaysia. There was a successful PC business unit that was running fairly well. But there was a problem with one of the major distributors. So I approached the business manager and told him not to ship even a single unit of hardware to them because they had not paid for six months. To the business manager, it was most unexpected that a finance guy would determine if something ships or not. My decision to make that call was not a show of power or arrogance; it was doing what s right for the company. You re the custodian of the company s finances and you have a huge fiduciary responsibility to ensure that there are no leakages. He didn t take it well initially but I said that I could help him sort the problem out. I suggested we visit the distributor together. And you know what? Today that business manager is still a good friend and he recognises that we did the right thing. Adding value One of the key methods Chari uses to add value is to provide an early warning system for the management. I don t want to go to the CEO as a typical bean counter and say, The quarter is over, sir, and we ve done a very bad job and missed all our targets. What I do is to go to the CEO at the start of the quarter and say, Dear CEO, here s an early warning from our perspective, we are going to miss the target for the quarter based on six reasons that we ve outlined. We also suggest five initiatives to recover the quarter from disaster. It s a very good debate to have with your CEO. You are the conscience of the company, risk mitigator and a trusted advisor. Remember, any advice should be data driven and numbers-based. You should always think like the CEO and act like a CFO. That s what your mindset should be. Benchmarking, managing costs, avoiding wastages, eliminating structural costs and changes of business model are critical functions of a CFO. Enhancing revenue is something we should do even more so that we hold ourselves responsible mentally for both the top line and bottom line of the company s performance. You are the conscience of the company, risk mitigator and a trusted advisor. Remember, any advice should be data driven and numbers-based. You should always think like the CEO and act like a CFO. That s how your mind-set should be.

12 10 Inspire This is where the CIMA qualification helps. It trains you to think strategically and evaluate business performance better. Analytics plays a significant role these days to understand the business insights and CIMA graduates should be smart enough to appreciate the importance of analytical tools to add value to the company, explains Chari. His ability to take responsibility and accountability of the company s finances and function as an effective member of the management team encouraged his superiors to send him to Thailand to deal with the corporation s turmoil there. He employed all of his experience and abilities to simultaneously act as Country MD, CFO, and controller. I thank my superiors for choosing me to go to Thailand as the exposure was immensely useful. You are totally out of your comfort zone but this is when you learn the most, says Chari. You re the custodian of the company s finances and you have a huge fiduciary responsibility to ensure that there are no leakages. He then spent almost 12 years in Singapore holding various positions at Hewlett Packard including VP of Personal Systems group for six years running a US 1 Billion business for South East Asia and Taiwan. He was also the VP for Sales and Marketing for Asia Pacific and Japan for HP Financial Services for over three years. Working the ground As the CFO of a company, if you think your job is back end looking at papers and reports sitting in one place, then it is difficult to be effective. You need to focus both externally and internally almost equally. 50 percent externally-focused means you should be out there meeting with dealers, distributors, bankers, suppliers and customers to understand what s happening. This philosophy and practice has helped me substantially in my career. You get all sorts of real-time information on deals being made on the ground because you re right there. Right now, I m sitting here knowing we have Q4 in the bag.

13 RECOMMENDED ARTICLES Inspire 11 Understanding reputational risk Companies are beginning to put reputation before profit, according to a global survey in August 2013 of 1,500 finance leaders who hold the Chartered Global Management Accountant (CGMA) designation. The survey identified three main reasons for the increased global interest on reputational risk - the demand for greater transparency, incidents at leading organisations or competitors that led to a loss of reputation and the rise of social media. Three quarters, The same number, Almost half, Nearly 1 in 4, 76% 76% 44% 22% of global financial leaders said their company was prepared to lose profit in the short term for the sake of protecting its longterm reputation (SE Asia: 80%) place more focus on reputational risk today than in previous years (SE Asia 79 %) had rejected a project that made financial sense because the reputational risk was too great (SE Asia 49%) organisations had experienced a reputational failure (SE Asia : 21%) Is your company prepared to lose profit in the short term for the sake of protecting its reputation and driving more success over the long term? I don t know 11.9% No 7.3% Yes 80.7%

14 12 Inspire Do you think businesses in your industry are putting more focus on reputational risk today than they did in the past? Significantly more 30.3% Somewhat less 0.9% About the same 20.2% Somewhat more 48.6% Have you, or your organisation, ever rejected a project that made financial sense because the reputational risks were too great? Don t know 25.7% No 24.8% Yes 49.5% Has your organisation experienced a reputational failure? Yes 21.1% No 78.9%

15 Inspire 13 TURNING DATA INTO INSIGHT A new business era is dawning as organisations use new and powerful tools to assess vast volumes of data. CIMA and the AICPA asked over 2,000 CFOs and other finance professionals around the world about the role of finance in turning data into insight to maximise commercial opportunities.

16 14 Inspire THE OPPORTUNITY FOR FINANCE Data has become a key focus for corporate leaders today, and CGMA professionals recognise its potential to change the way we do business in a new data-driven era. CHANGING BUSINESS DRIVING DECISION MAKING 93% 87% said big data and better analytics will change the way business is done over the next ten years said finance has an essential role to play in helping your organisation benefit from big data projects CAREER OPPORTUNITY BUSINESS PERFORMANCE Improvements in the quality of data and its analysis will help improve: 85% agree that having the skillset to gain more insight from data (analytics, big data, business intelligence etc) enhances your career and your employability Identifying opportunities to increase efficiency or save costs Driver-based forecasting Increase revenues (through better customer segmentation etc) 1 Maximising value of human capital Developing and monitoring KPIs 4 Monitoring external risks 6 Evaluating investment choices (markets, product lines etc)

17 Inspire 15 THE CHALLENGE FOR BUSINESS said business is struggling to turn growing volumes of data into valuable insight 86% 53% reported that their organisation is investing in technologies to harness the power of big data Why? Here are some of the challenges and barriers they cited. DATA VS INTUITION When asked which sources of information they rely on most when making strategic decisions, small companies said they rely more on intuition but larger companies chose data and analysis BARRIERS TO INVESTMENT Among respondents the biggest reasons for not introducing new or improved practices around data management and analysis are: We are introducing new or improved practices 11% 52% Cost (of technology, people etc) small and mid-size companies large companies Not a priority right now 14% STOP 35% Culture - the value is not understood Intuition and experience Data and analysis Lack of skills 25% 30% Time availability INFORMING DECISION MAKING When providing information to inform decision making or performance management organisations need to improve: EXTRACTING INSIGHT CGMA professionals see the following weak points in their organisations ability to extract valuable insight from data: Accuracy/reliability of information Timeliness of information Communicating complex information with impact Providing more forwardlooking perspectives Relating finance metrics to strategy Creating clear business cases to support investment choices 67% 66% 63% 61% 53% 39% 62% Bringing data together from different databases / business silos 46% Extracting insight from non-financial data 39% Identifying meaningful trends and insights in a mass of data 51% Ensuring the business captures reliable good quality data in the first place 43% Ensuring insights gained from data are used to improve performance 34% Intelligent visualisation and reporting of data

18 16 Inspire WHO DOES DATA BELONG TO? RETURN ON INVESTMENT When asked who is responsible for ensuring their organisation gains a return on investment in data management technologies, respondents said: 61% 28% 18% 4% 1% 13% CFO CIO COO MARKETING DIRECTOR HR DIRECTOR OTHER THE ROLE OF FINANCE The role of finance in extracting insight out of data Finance works as an equal partner with IT and business heads on analytical tasks Finance provides the link from new insights gained from data to the planning and budgeting needed to achieve impact 9% 9% 21% The finance team leads most initiatives to analyse data in the business Finance primarily reports financial performance data, leaving the analytics to business teams elsewhere 23% 37% Finance leads on finance-related data, and supports on other forms of business analysis

19 The joint venture between AICPA and CIMA aims to elevate the profession of management accountancy through the Chartered Global Management Accountant (CGMA) designation, as well as taking it to new heights by becoming the most valued, globally recognised recognition. Here are just some of the many success stories from CGMAs.

20 Chartered Institute of Management Accountants Lot 1.05, Level 1, KPMG Tower 8 First Avenue, Bandar Utama Petaling Jaya, Selangor Malaysia T F E. SEAsia@cimaglobal.com