The Strategic CFO. Chari TVT Group Chief Financial Officer 30th May 2014

Transcription

1 The Strategic CFO Chari TVT Group Chief Financial Officer 30th May 2014

2 Revenue 18.4 Billion RM No 7 on the KLCI* PATAMI 2.6 Billion RM No 8 on the KLCI* Market Cap 58.9Billion RM No 4 on the KLCI* Subscribers > 240 Million No 2 Regional Telco* Employees 23,000 Countries 9 * As of 31 Dec 2013

3 FY (GROUP) : Building a Regional Champion Significant Growth in Subscribers, Revenue, PATAMI and Market Cap Subscribers (RM 244 Million) 6x Operating Revenue (RM Billion) 84% PATAMI (RM Billion) 2.3 2x Market Cap (RM Billion) 2x PATAMI Normalized for one asset sale gain IPO

4 Challenges of telecommunication industry Business Model Innovation Segmentation Dealer management Behavior based, Subsidy management skype, devices trend Advertisements ATL, BTL, INL Pricing differentiation FMCG (Segmentation) Sachet pricing Night Owl Campaign Targeting Call Centre innovation Online opportunities Loyalty management Billing management 2.5 M a month! Lab and innovation ( Ajinomoto, Colgate) Campaign Execution Post Campaign 2G,3G, LTE, Wifi, Nano, Femto Cost benchmark Regional attack Cost per byte Cost per minute Filling up capacity Manufacturing (Minutes & data Factory) Technology (Inflection points) Device demography Packet Core Too Many suppliers Technology inflection points data and voice Sachet pricing Segmentation 4

5 Continued Evolution of the CFO Role Transaction Processing Keeping Score 1980 s Efficient Finance Utilizing Technology (e.g. Best of Breed) Role Focus Reducing Cost of Finance Business Process Reengineering Partnering with the Business 1990 s Efficient & Effective Finance Leveraging Technology (e.g. ERP) Management Information / Decision Support Balancing Performance and Risk Realizing Value over the Long 2000 s Integrated Finance and Business Transformation Term Holistic Approach Value Creation & Value Preservation Sustainable Confidence and Value 2010 s What Next? 5

6 CFO role is moving from a evolved single function to involved multiple function The Four Faces of the new CFO Stimulate behaviors across the organization to achieve strategic and financial objectives Leading Edge Threshold Performance Provide financial leadership in determining strategic business direction and align financial strategies Finance Function Balance capabilities, costs and service levels to fulfill the finance organization s responsibilities Protect and preserve the assets of the organization

7 The new STRATEGIC CFO multi dimensional role THINK LIKE A CEO ACT LIKE A CFO Risk management New opportunities Redefining KPIs Predicting and shaping the future Enhancing performance Value extraction Value creation through M&A

8 1 Predicting and shaping the future Managing inflection points and sleeping with enemy The death of CD We ran out of film - KODAK Is Sony the next Victim?? Hastened by Enemy? New challenges keep emerging

9 Risk management & Stress Tests 2 Using what-if scenarios and simulation to plan Revenue resuscitation Variables Highlights Voice RPM reduction RPM reduction from RM 0.18 RM 0.07 (postpaid) and RM 0.25 RM 0.12 (prepaid) Increase in Voice MOU Voice price elasticity of RM 0.01 reduction 2.8 MOU increase SMS RPM reduction Increase in # of SMS Reduction of Interconnect SMS New Business Model SMS RPM reduction from RM 0.12 RM 0.02 (postpaid) and no change for prepaid SMS price elasticity of RM 0.01 reduction 20% SMS increase SMS interconnect dropping from RM 0.05 to RM 0.02 New Business Model Revenue simulation 2010 A Sim. A Sim. B Sim. C Sim. D

10 Enhancing performance 3 How the business applies information to optimize outcomes Business Optimization Using deep business insight and exceptional analytical skills Actionable insights & predictive analytics Preemptive & predictive business management Information deemed strategic asset Business scenario modeling Prescriptive business measures Deep analytical skill sets Information is Governed Reporting is consistent & trusted Standard data definitions and governance BI used widely for reporting & analysis Predictive, real time analytics Differentiating Lack analytical skill sets Minimal report standardization Lots of manual data manipulation Information supports basic operational needs Lots of data, little information Break away Competitive Foundational Contextual business rules and pattern recognition Content analytics Data warehouse appliance Metrics, dashboards, scorecards Master data Managing structured, unstructured data Data warehouses and reporting Leveraging Big Data Ad hoc Spreadsheets and extracts How the business manages information and learns from it 10

11 4 Redefining KPIs Using new tools to drive performance See the Value Manage for Value Creation Wealth Creation = EVA Pay for Value Creation Understand Value Creation

12 5 Value Extraction Embedding smart spend all business dimensions Sharing Across Business Units 1. Stretch the Value Maximise Contract Value Looking for value in everything we do Avoid unnecessary work Align our Resourcing Test & learn from alternative ways of doing things 2. Eliminate Wastage Policy Simplification Benchmarking our work and doing better than our competitors Procurement Transformation Process Simplification & Automation 3. Smart Investment Accurate Planning & Forecasting New Sourcing Models: Outsource, In Source, Open Innovation Avoid Over-Scoping

13 5 Value Extraction Competitive bench marking

14 6 New opportunities and business models Exploring the Blue Ocean Ticketing Transport ticketing Airline check-in Parking Venue access Payments Point-of-sale payment Vending machines Utilities Multiple cards Marketing & Advertising Smart poster Targeted consumer information Leisure Data Collection Access Control Smart poster Targeted consumer information Leisure Data Collection Loyalty Loyalty schemes Personalized offers Incremental services Multiple cards Identity Health Public health Prescription tracking Events Workforce management Asset tracking Vehicle information Information Sharing Peer-to-peer vcard distribution Social networking and location based services Call request SMS notification Education Vouchers and Coupons Vouchers Social media Consumer reach Targeted marketing

15 7 Value creation through M&A M&A based on synergy rather than size Take up the business which will help enhance customer experience, loyalty and reduce churn Or the Telco infrastructure would enhance the customer experience of the business partner

16 Critical success factors in the new era for the strategic CFO Shaping Corporate Strategy Performance Matrix Value Creation MVA Managing Uncertainity Decision Based on analytics Leadership Sucessful Strategic CFO THINK CEO and ACT CFO

17 Thank You

18 What does Wharton teach an axiata company Value Creation: Driving Organic Revenue Growth - World s best companies make targeted strategic choices around products, geographies, channels, and customers to drive long-term sustainable revenue growth Value Creation: Driving Performance Not all growth is created equal, and chasing the wrong type of growth can lead a company down the path of financial ruin. Corporate Strategy: Actively Managing the Product Portfolio Where to play and how to win; these are the cornerstones of corporate strategy. Yet strategic thinking is often muddled and poorly communicated. From Analysis to Action: Using Performance Metrics You can t manage what you can t measure, the old adage dictates. In many cases however, managers are inundated with redundant, poorly structured metrics. Strategic Decision Making Making decisions in an atmosphere of increasing time pressure, uncertainty, and conflicting expert opinions creates challenges for any executive... Strategic Agility Managing Uncertainty In order to make timely strategic decisions, executives must accept that a choice will be made when there is still great uncertainty surrounding the decision. From Decision to Action Strategic Execution Effective leaders understand that building a robust strategy is necessary but not sufficient to performing at the highest level. The strategy must be implemented across the organization. Four primary filters or perspectives are essential in strategic execution: confidential 18 the people involved, the organizational culture, the entirecompany enterprise, and a sense of urgency.