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Category Archives: CFO Series

The CEO-CFO Jugalbandi

The CEO CFO JugalbandiCEO and CFO jugalbandi is all about striking the right ‘notes’ together, similar to how two artistes who are proficient with their respective instruments but when played together create ‘magic’. Just like good artistes who may understand and in some cases play the other artiste’s instrument well, they recognize the impact of putting together a great performance by giving each other the space and freedom to express themselves so that each of them look good individually and also come out delivering an incredible performance together! Continue reading

CFO’s role in mentoring the F&A team and improving the F&A team effectiveness

Mr. Koushik Krishnan

Mr. Koushik Krishnan

By Mr. Koushik Krishnan, Regional Manager, accounting & control, A-PAC, Tetra Pak
Mentoring – building great teams to manage the madness

I handle a somewhat large role in a somewhat large organisation. My work spans 6 time-zones, 9 markets and a billion euro in turnover.

Last week, I got laid up with a slip disc. With Q3 close and the budget season in full swing, this was not exactly the best time to be laid up. So, here I was, trying to juggle decision making, tactical overseeing, putting out team fights, participate in corporate future gazing, get the team ready for an upcoming audit, and the list goes on. And also, squeeze some time for rest and therapy when the body gave way. Continue reading

Smart performance, communication skills yield better results for CFOs

Deepak Narayanan, Co-Founder, MyCFO

Deepak Narayanan, Co-Founder, MyCFO

In recent years, CFOs have assumed increasingly complex, strategic roles focused on driving value creation across the business. Growing shareholder expectations and
activism, more intense M&A, mounting regulatory scrutiny over corporate conduct and evolving expectations from the finance function have put CFOs in the middle of corporate decisions.

While financial performance is what it is, the CFO’s role in helping stakeholders interpret the numbers in the context of the business environment is critical. This article explains the significance of the role that CFOs have to play in managing investors, communicating with customers, suppliers and internal teams, Continue reading

Working with the PE – Role of the Modern day CFO by Vikas Chadha

Vikas Chadha CFO

Vikas Chadha, Chief Financial Officer,
Berggruen Hotels Pvt Ltd

CFO is one of the earliest moves made by a PE firm upon adding a company to its portfolio. PE investors want to track the Investee Company’s financial situation as soon as they are invested. While the acquired portfolio company may have solid financial systems and reporting, the PE firm’s first priority will be to upgrade the financial structure and transparency by adding a new CFO.

PE investors prefer CFOs who have worked in both large and small corporates. The large corporate experience provides an understanding of sophisticated corporate systems and the experience in a small company helps to test and enhance the CFO’s resourcefulness and ability to deliver when removed from the expansive support systems of a large corporate setting. Continue reading

Preparing for an exit

This article is useful to PE Funds and CXO’s of PE invested companies who are eyeing an exit in the next 12-18 months and looking to strengthen/ streamline decision support systems, squeeze cost reductions, enhance governance mechanisms, implement risk management systems which will help them build a case for better valuations closer to the date of an exit either through listing or through sale to another PE fund.

How does a company get itself exit ready?  Unfavorable market conditions and not so good business environment are today stated as primary reasons for PE funds and companies not being able to get an exit.   A recent article in the Economic Times states that there are close to 630 PE invested companies, which are waiting for an exit. There is pressure and Continue reading

Family Owned vs MNC: How does it impact a CFO’s life?

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With over 90% of the businesses run in India promoted, owned or managed by families, is it possible for an ‘outside professional’ to play the role of CFO?

Do such businesses require a ‘professional CFO’ in the first place? Is it possible for a CFO to operate independently and yet win the trust of family promoters? How can a CFO from a structured corporate environment make a tangible difference to family managed companies?

Soumitra Bose, an ex-Lever Finance Director, shares his experience of having made the transition from a leading Professionally Managed Global Consumer Goods major to India’s largest Family Owned/ Managed Flavour and Fragrance Company as their Group CFO.

Continue reading

How well do we know each other? CXO’s guide to improving inter -personal relationships

Debasis Chatterji – CEO Netxcell

Professional, leader and challenge seeker, best describe the journey of Debasis over the last 21 years of his working life. Netxcell provides various voice and data provisioning services including Customer Lifecycle Management service to almost all major telecom operators in India, managing a subscriber base of more than 400 million. Under his leadership, Netxcell has started its operations in Africa through Netxcell Mauritius Ltd (NML).

His emphasis on Intellectual Property Rights helped Netxcell file several products / services for Patent, Service Mark and Copyright. Debasis has been a speaker in many national and international telecom conferences, engineering colleges and management institutes. Debasis is a doctorate in Science with AMP from IIM Bangalore and Dip. in Patent Law from NALSAR. He is the recipient of Indira Super Achiever Award.

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Captive Centers – ‘Low cost aggregators’ or ‘new revenue streams’?

Ms. Sangeeta Shankaran Sumesh – Vice President Finance  & Administration, Dun & Bradstreet Technologies & Data Services Pvt. Ltd

Sangeeta Shankaran Sumesh is a Chartered Accountant and Cost Accountant by profession with around 17 years of experience, including 8 years of international exposure. Currently, spearheading the Finance & Administration division as Vice President at Dun & Bradstreet Technologies and Data Services, the crests in her career came with stint in other big Multinationals & Big 4 professional firms.

Sangeeta Shankaran

Some of the honors’ & recognition she received includes –

  • Featured as one of “India’s most influential women in Finance” by rediff.com in Jan 2012
  • She was also rated as one of the top 5 leading Women CFO’s at Women Leaders in India Awards 2011 held at the Taj Mahal Palace in Mumbai.
  • Continue reading

‘Workspaces’ – Redefining the way CFO’s look at business information

With a strong track record in building business and a keen interest in latest technologies, Virender leads Ramco Systems, a Global ERP product company on its journey to becoming a leading Cloud ERP player. As the CEO of Ramco Systems, Virender has been primarily focusing on evaluating new market opportunities, attracting strategic partnerships, realigning portfolio of offerings and driving profitable growth. An astute businessman, Virender is farsighted and has a flair to predict technology trends that will drive the future. It is this quality, coupled with rich international experience, that is steering Ramco towards becoming a strong Cloud ERP player.

Continue reading

Managing ‘Integration’ post acquisition – A CFO’s perspective

P Chandrashekar – President & Group Chief Financial Officer, Polycab Industries

An MBA in Finance from Narsee Monjee Institute of Management, Mumbai with B.Com from R A Podar College of Commerce, Mumbai. A Finance Professional with a Strong Business and Operational Orientation. 29 years of post qualification experience in a range of roles in different industries.

P Chandrashekar

In the course of the 29 years career, handled several dimensions of business from setting up new ventures to mergers and acquisitions, setting up systems and processes and implementing ERPs, scaling up businesses and turning around sick businesses as well as help CEOs run their businesses profitably and efficiently. Worked with Companies like the RPG Group, Jumbo Electronics Dubai, DHL, Coca Cola India, and Warburg Pincus Investee Companies.

Was involved with two Warburg invested companies, Radhakrishna Foodland and Alliance Tire Group. Was an entrepreneur, setting up a Turn Around and Asset Reconstruction Company. Presently working with Polycab Industries as President and Group Chief Financial Officer. Involved with Narsee Monjee Institute of Management Studies on the Board of Governments for their Retail MBA Program. Conducted sessions on “FINANCE FROM A CFO PERSPECTIVE” at Welingkar Institute of Management.

In the current post, Shekar shares his ‘own experience’ of how as the CFO he played a pivotal role which extended to building a team for the future, integrate IT and finance processes across entities and set up an operating structure at the group level to fix accountability and provide visibility into operating metrics. The  acquisitions were of global companies and Shekar also shares his perspective on how critical it is for organizations and CFO’s to also focus on getting the ‘cultural integration’ which invariably has a significant impact on the success of the integration.

Background

The Group is in the automotive sector, manufacturing niche products primarily for export.

The Group was set by promoters with significant expertise in the space supported by a leading Private Equity Firm.

The journey of the Company started with an overseas acquisition of manufacturing facilities and brands, followed by setting up greenfield manufacturing facility in India and then another overseas acquisition of distribution assets and brands.

The company moved to a level of USD 500 Million in a matter of 5 years.

Ownership and Management

The company is owned substantially by the Private Equity firm with minority stakes with the promoters – first generation entrepreneurs.

While the promoters have been personally involved with the growing of the business, they have inducted professionals into key managerial positions. The overseas entities are managed by professionals with independent directors in each of the large overseas entities.

Key issues with the organization

  1. Since the company was set up with an acquisition, there was low data visibility
  2. With several entities in the group, each having a different ERP or a mini ERP, data integration and uniform group reporting was an issue
  3. Since the process orientation was low, decisions were more people driven
  4. Cross cultural issues with each entity wanting to run the operations based on their cultural orientation
  5. There was hardly any finance team as the Group was still in its infancy
  6. Statutory compliance issues and Transfer pricing issues
  7. In the second acquisition, the entity acquiring was a small business, acquiring a business 5 times its size and with a complete different business orientation

Transformation

When I joined the organization, I set up a four point agenda for myself in the organization

  1. Build a strong team
  2. Integrate the processes in various entities
  3. Build a robust reporting template
  4. Get the Group operating structure right with adherence to the Transfer Pricing requirements

Additionally, since the India entity was a Greenfield project, had to complete the financial closure as well as set up working capital limits.

1.  Building a strong team

We had to set up the Finance function in India as well as recruit Controllers in the overseas entities.

Being a start up organization in India, there was low visibility for the Company and the space the Company was in. A fair number of people were offered the role of controller India Operation but all declined citing various reasons, till we found a candidate who was willing to take on the challenge. In the three years since, he has blossomed into a really good resource for the organization.

We took a number of fresh CAs and MBAs with “FIRE IN THE BELLY” and deployed them in various critical projects. Effectively, these young men, were given significantly larger roles in different geographies and the process of integrating the Finance organization across the group

In the USA, we found a candidate who had taken a VRS from a large Industry player and made an offer and he could come on board and start hitting from day one.

In Europe, after a search with the help of the Audit firms, we offered a person from a different industry and had him set up the European operations virtually from scratch.

Given the diversity of the group, it was necessary to get a good IT head. We found a candidate with industry background and experience in SAP implementation and tasked him with unification of the group ERP.

The approach to team building was simple – look for attitude, look for hunger and once the person was in – give a larger responsibility than could have imagined and support them to succeed. And it worked very well.

2.  Integrate the processes in various geographies

The group had 5 different ERPs in all. There were 2 manufacturing entities and 3 marketing entities and each of them had a different ERP and different versions of the same ERP.

The data integration was a serious challenge.

We embarked on a study of a unified ERP across the group – split as Manufacturing ERP and ERP for the Marketing entities.

The two manufacturing entities were in different stages of evolution – one was a very old facility with some old and archaic methods of working and the second was a brand new facility with a focus for enhancing production.

After a lot of discussion and debate and involvement of various stakeholders, it was decided to postpone an integrated ERP but focus on getting a Business Intelligence software, to pull the data from various entities and have group visibility.

To that end, various products were evaluated and we decided to go with robust BI tool.

The business was such that there were virtually new customers every day, new products every week and without an integrated master, it would have been difficult to get an integrated picture of the operation.

A team was created in India to manage the masters in every geography and processes were put in place to ensure that any additions in any part of the Group were managed seamlessly.

While the Group still does not have an integrated ERP, the BI tool implementation has helped in getting a group view on key parameters.

3.  Build a robust reporting template

When I joined the group, there were some reports but there were individual entity reports and not comprehensive and more importantly comprehensible.

The group did not have a view of the group wide sales, margins, working capital etc.

Further there was no group integrated reporting of the Financials – P and L, Balance Sheet and Cash flows.

We created a group reporting template and had the buy in of all the stakeholders in each of the group entities.

The challenge was then in getting each of the group entities to adapt to the Group reporting templates.

There was stiff resistance from all the non Indian entities for the change.

The approach we took was to prove that these templates were in the interest of the Entities concerned and sent out members of the India team to each of these entities to assist them in the changeover. Once there was a demonstration of how things can be done, the group entities, over time started delivering the reports on time.

Over time these formats were refined and process so well defined, that the Private Equity investor found the reporting pack one of the best reporting packs in their investments in India.

4.   Get the Group operating structure right with adherence to the Transfer Pricing requirements

A group operating in different geographies with multiple manufacturing entities and multiple marketing entities needed a robust transfer pricing mechanism, which was compliant with the tax laws in each geography.

We engaged one of the leading players in the TP area to advice us on the subject. Based on the advice we modified the transaction structure between the entities.

These are only some of the challenges which went in getting a multi location, multi culture group entity getting integrated and start reporting and acting as a Group and the role Finance played in this endeavor.

The role the Finance and IT team played in handling the challenges was incredible and the support from the auditors and the TP advisors was exceptional.

MyCFO  (deepak@wealthtree.in)