Last week we had great CFO event in New Delhi, Mumbai and Bangalore in India, where some senior finance leaders talked about Growth strategies – both organically and through M&A, current priorities like IFRS – with different perspectives for each of these.
The CFO event was conducted by D&B in collaboration with InAct, a forum for CFOs to share their learning’s and best practices.
CFO as chief of objectivity
One of the CFO in US, in an interview talked about how the role of CFO has transformed into Chief of Objectivity. What does that mean? LoB leaders/CEOs often get into this emotional excitement whether it is M&A situation where they would like to buy another company due to peer pressure or seek faster growth path through other decisions that are not supported by valid data points. There are aspects of business, where decisions that are not necessarily made through supported objectivity. CFOs play a key role to align these emotion decisions, to meaningful objectivity, with some fiscal discipline and wise spending. Offcourse, there was arguments that CFO tend to be too conservative many times, but many CFOs argue that they are moving away from that. CFOs are no more just controllers, but play a strategic advisor to business, bringing analysis into the decision making process.
About M&As – Microsoft analogy
Most interesting analogy in the conference was from Mr. Lakshminarayana, Chief Strategy Officer (former CFO) of Wipro where he explained how M&As are perceived in an organization from Microsoft Office perspective:
– First step is when there is the big idea for M&A which is often Microsoft Powerpoint
– Next step is when finance guys get into the picture, you guessed it right – it is Microsoft Excel
– Next being laying out detailed recommendations on the policies on integration – it is in Word
– Finally all the communication that happens including grievances post M&A – which is Microsoft Outlook
Mr. Seshagiri Rao, Joint MD and Group CFO of JSW talked about how Growth can be achieved through organically and inorganically with some great examples:
– M&A to take care of compliance where Kingfisher acquired Air deccan to go international
– Product innovation is a path to organically grow in the same area of expertise – quoting apple ipod, iphone and ipad experience
– M&A as approach to go to different region, quoting Bharti’s recent acquisition in Africa/middleeast
Mr. Giri Giridhar, CFO of Aditya Birla Retail shared the emotional aspects of M&A, and how it is important to manage this from the end goal perspective for M&A. This was indeed very aligned to the CFO as Chief of Objectivity factor.
Mr. Shrenik Baid, PWC shared his thoughts on how IFRS is not more a choice but a mandatory aspect where Large Indian companies have to act/implement. India Inc is beyond the point of why we need IFRS, to how to implement IFRS phase. His analogy of relating IFRS to languages, where every Indian needs to move to new language called sanksrit from their respective languages, was interesting.
I got a chance to talk about how growth strategies and compliance can be enabled through SAP BusinessObjects solutions. SAP laid its own acquisitions strategy to enable ‘ERP for Management’, to cover the strategy layer of closing the loop of strategy to execution. SAP is also extensively focusing on enabling convergence to IFRS both through the core general ledger solutions as well as financial consolidations solutions
Truly SAP BusinessObjects solutions are catered to making growth strategies successful, compliance met and tranform CFO as Chief of Objectivity.