Chat with CFOs: Daniel Tando on Finance & Accounting and Technology
Finance & Accounting and Technology
We are keen to learn more about the path that a Finance & Accounting department in a typical corporate setup has taken and evolved over the decades. And we are interested to understand how Technology has impacted or changed the way things work for a Finance & Accounting professional. Many have discussed or wrote about Cloud computing, accounting, ERP softwares and mobility access.
However, it is not always easy to have a discussion about Technology with the Finance team, let alone, speaking to a CFO about IT and at the same time getting his candid opinions and sharing of experience. TFA Geeks had the opportunity to speak to Mr Daniel Tando, previous CFO of Nielsen Singapore, and we got to ask the CFO a couple of hot questions.
Chat with CFOs: Mr Daniel Tando, previous CFO of Nielsen Singapore
TFAGeeks: Hi Daniel, thank you for accepting our invitation and having a quick chat with us. We understand that you have been in the Finance and Accounting line for more than 20 years, with your last held position as a CFO at Nielsen Singapore, and before that you held numerous managerial positions in FP&A (Financial Planning & Analysis), Finance and Accounting roles. Will you be able to share if there are any differences between a Finance role when you first started work and now in this age of digitalization?
Daniel: Thank you for the invitation, it is my pleasure and I am more than happy to share my experiences. The Finance & Accounting (F&A) profession has gone through a sea-change in the last 20 or so years. Aside from the incessant cost pressure to do more with less, in my opinion and based from my personal experiences, the greatest shift compared to what it was in the early 1990s, there are 3 main areas: Regulatory complexity, Business-partnering, and IT-savviness.
Regulatory complexity – In the last 15 years, we have probably seen the biggest surge of new (or changes to) accounting & compliance regulations ever. Notably, the introduction of Sarbanes-Oxley Act (SOX) in 2002 added a significant load on to companies listed on the various US exchanges and their overseas subsidiaries to comply with new regulations mandating additional disclosures, control framework implementation, as well as authorizing heavy criminal penalties on company executives for fraud & misconduct.
Almost concurrently, the IFRS & US GAAP Convergence project also kicked off, followed by a slew of new / revised accounting standards pronouncements from both the International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB). In recent years, there’s been an increasing global push on tightening surveillance & enforcement on cross-border issues such as anti-money laundering (AML) and base erosion & profit shifting (BEPS). There have been only more regulations and compliance than when I first started!
Business-partnering – There is now much greater emphases on F&A professionals, on both strategic & tactical levels, to be business-partner, someone who value-adds to the enterprise, to the commercial & operations teams. This is likely due to the quickening pace of market changes, as well as the more frequent occurrences of financial crises and sell-offs. There is a growing expectation for the company’s F&A function to play an essential role in driving business growth and risk management, going beyond the traditional compliance & transactional remit. This requires F&A people to significantly up their game especially in soft skills such as communication, business acumen, and collaboration.
Another important development is the need for all other roles besides Financial Planning & Analysis (FP&A) to also become more deeply embedded in the business in order to meet the business-partnering expectations. It is a very difficult situation especially for the ones, who have been performing transactional work for so many years, and now they are pushed to explore outside their comfort zones – to talk, think and challenge more. While the CFO and FP&A has been doing business-partnering to varying degrees for a very long time (at least since I started working in the 90s), the expectation now is every F&A professional should try to be a business partner! In order to keep pace with such expectations, everyone from the junior-level to CFO has to continuously improve and evolve, whether be it in business knowledge, technical skills or process sophistication.
IT-savviness – With increased business-partnering comes an ever-greater demand for analytics and information. Previously, companies were rather contented with working with internal historical data and selective external indicators, recently the trend is increasingly moving towards tapping into Big Data and Thick Data to enable better predictive capabilities of various financial / mathematical models. Companies are now harnessing technology to allow operations with quicker turnaround, and deploying cloud technologies that allow the information, analysis or output to be accessible anywhere and fast.
Consequent to this development, we have witnessed many more powerful & sophisticated applications, with much greater emphases on graphical and visual tools, as well as the shift from on-site to the cloud. With F&A as the nerve-center of information flow within the enterprise, the natural development is to require significantly more IT-savvy professionals who can proficiently operate these tools and keep up with the fast-changing technological landscape.
TFAGeeks: It is interesting that you mention about technology and how it has evolved and impacted Finance over the years. What are your views on technological disruptions? Do you think this will last or soon it will be just another passing fad?
Daniel: Barring a nuclear war or a big asteroid directly impacting Earth, the technological disruptions are here to stay and will only quicken and intensify in the coming months & years. Through the decades we’ve all witnessed the benefits of deploying technology in our professional & personal lives, a notable example would be the tremendous increase in productivity that technology has brought about.
Now we stand on the cusp of another new technological epoch with robotic process automation (RPA) and artificial intelligence (AI). These developments are still in the nascent stage and it’s easy to see the disruption continuing for decades to come. We’re already witnessing first-hand the disruption on the accounts payable process. Smart Optical Character Readers (OCR) that are able to read invoices, can convert that into digital data, that are then relayed straight as inputs into the accounting system. And these technologies are beginning to replace humans. Currently, error rates are still rather high for the system to function unsupervised, but given time and refinement these RPA will have a much greater impact and gradually it might replace or greatly reduce the need for human staff.
While enterprises are anxious to jump on the robotic process automation bandwagon, we should note these technologies require fairly significant investments upfront while the real productivity savings will only come some years down the road. In my view, there are really many areas of preexisting operational inefficiencies that companies might be still blissfully ignorant about. These inefficiencies can be easily rectified by simple process improvements and change management tools, where low-hanging fruits & savings can be easily harvested with very little additional outlay required. Companies will do well by looking into some of these tools, while we wait with bated breath for our IT/Technology brethren to work out the kinks automation and AI.
TFAGeeks: As a CFO, what are the issues and problems that will cause you to lose sleep at night?
Daniel: Hahaha. Actually, I sleep very well most nights! Though, on a more serious note, issues that really trouble me would be: Compliance, People, and Transparency.
Why Compliance? As I mentioned earlier about the trend towards greater regulatory complexity as well as compliance enforcement. Obviously the motivation here is to keep the executive team out of jail and avoid financial penalties by ensuring that my team and organization keeps to 100% compliant with the applicable external regulations in the jurisdiction we operate as well as internal policies & procedures.
Why People? As a team leader, people definitely ranks above regulations in complexity. Humans are complex beings, and individual expectations as well as generational aspirations can differ wildly. This is hugely challenging when I’m trying to align, motivate, and drive my diverse team to achieve the vision I had set forth. For example, while the Gen X worker is looking forward to retirement in the near future, the millennial is hungry to learn and quickly move up. Despite one’s best intentions & efforts to engage the team individually at their point of need, there are occasions when it is necessary to part ways and bring in others who will subscribe to the vision.
Why Transparency? By transparency here I mean predictability in performance management, as in delivering the commitment we signed up for. More recently, the focus is on providing an accurate financial performance forecast. I spent a lot of time reviewing and refining the process to achieve the desired outcome. Often, just when I think I figured out the secret formula, along comes another internal variable or external surprise to throw us off-track. Thus it’s become an iterative process, a journey.
TFAGeeks: I’m glad you can sleep well, though you have listed quite a handful of headaches. There are many professionals in the Finance and Accounting industry, however there are only a handful of CFOs and Finance Directors, can you share how and what it takes to be a CFO or Finance Director?
Daniel: Although there are common factors driving a person’s career success, I will be remiss to ignore the reality that, often, the element of luck or the divine – being at the right place at the right time or having a benefactor opening up opportunities – can and does play a significant role. Personally, I can identify three other key characteristics that are very helpful in advancing an F&A career: business knowledge & acumen, emotional intelligence, and vision
Business knowledge – I’ve mentioned earlier that there’s now greater expectations on business-partnering from F&A professionals. Knowledge of business strategies & operations and how the former translates into the latter is essential to exceling in business-partnering. A person who builds on that knowledge will eventually be able to connect-the-dots across the different facets of an enterprise, both internally & externally. This is one way of developing business acumen in a corporate setting.
A proactive, hands-on, and collaborative approach is helpful, even if it means stretching beyond one’s official job description to help in ad-hoc projects or covering for a colleague. Frequently interacting with other business functions, learning from all levels of the organization, and exercising creativity (yes!) in figuring out the interconnected-ness of internal & external factors can help to accelerate career progression. If one is fortunate enough to link up with a good mentor or have a strong and supportive boss, it might shortcut some of the learning process.
Emotional intelligence – In general, soft skills are critical for long-term success, especially in the corporate world. I singled out emotional intelligence in particular as I firmly believe it plays a very important role to keep oneself on an even keel when work stress threatens one’s physical & emotional health. It enables one to find and sustain a balance or integration of disparate demands on one’s time and resources. There is a major spiritual / mental aspect to developing emotional intelligence, so a good starting point is the exercise of self-reflection. Connecting with one’s own strengths and development areas will be very helpful in devising balancing / integrating mechanisms that work for the individual. Everyone will develop in their own unique way.
Having & Communicating a Vision – While business acumen and emotional intelligence can help the F&A professional scale the corporate ladder, it’s necessary to develop a vision along the way so one knows what to do after reaching the summit. Fortunately, I think this can come quite naturally to most experienced F&A person who absorbs the lessons of experience, listens to feedback, and discerns context and how to put better practices to work while avoiding pitfalls. It’s also very important to communicate the vision to the wider F&A team so the alignment & driving to achievement can start to happen. There will be naysayers along the way but the CFO worth his / her salt will work through the issues.