Great write up by Alexandra Cain to close out the calendar year on how CFOs can drive digital transformation !
New Zealand is known for both its early adoption of digital technologies and it’s mastery over the COVID-19 pandemic. This puts its finance heads in a leadership role to explore the future of digital transformation.
How CFOs can help drive transformation was the topic for the most recent trans-Tasman CFO Series Lunchtime Live, sponsored by Microsoft New Zealand. Moderator James Solomons, CFO of online talent sourcing solution Xref, situated the discussion in light of the events of 2020.
“Businesses have had to adopt digital technologies as so many people transitioned to working from home as a result of the pandemic. Even businesses that were ahead of the curve had to embrace changes they had not anticipated or were scheduled further down their roadmap. Many activities were brought forward so businesses could continue to operate during the pandemic,” James said, noting even without the pandemic, the approach taken to transformation has morphed from one-off sizeable events to continuous evolution.
As Helen He, country CFO, Microsoft New Zealand noted during the session, “there’s nothing like a crisis to force your focus. Businesses have completed two years of digital transformation in two months.” She pointed out companies located in areas that have already experienced a crisis, such as Christchurch, which suffered earthquakes in 2010 and 2011.
The discussion opened with an exploration of the CFO’s role in transformation. Panellist Chris Day, chief transformation officer of New Zealand’s largest meat processor and marketer Silver Fern Farms, stressed that the financial integrity dimension to a CFO’s role has to be in good shape to enable the CFO to contribute credibly more broadly to transformation.
“If you’re a great CFO, it’s a license to have an opinion and compete for resources in a company. To do this you need to surround yourself with great people, including the financial controller who is responsible for integrity and trust in the business’s financials.” This allows the CFO to play a more strategic role in the company and, ergo, in driving any digital transformation.
Silver Fern Farms started its journey investing into the business including tech before the pandemic. “You need an orientation into the future so you can think about trends,” Chris said, noting as a result of the pandemic, “people now have a huge amount of confidence in using technology; everyone has ‘grown a foot’ in their capabilities.”
Allan Wong Kam, CFO of loyalty program experts Loyalty NZ, agreed good governance and a great financial controller are key. “It means you don’t have to worry about the day-to-day. My role is to listen, question and help the business understand why we are doing what we’re doing. I have to deliver on strategy, prioritise limited funds, people and resources to move forward and ensure the core business stays on track.” Loyalty’s head office is located in Wellington, an area with substantial seismic risk so had implemented a robust business continuity framework. Using that framework and monitoring the COVID situation in China and Europe, activated a heightened level of preparedness by running crisis simulations to be as ready as possible when the lockdown was announced
Helen noted transformation is a team sport. “The CFO’s role is at the centre of decision-making. Start a transformation project with something small and have early wins. This helps to motivate the organisation and leadership team to continue on the journey.”
What’s the responsibility of the board?
Although they are not enmeshed in the everyday, boards still have an important role to play in a business’s transformation.
“The board’s role is to set strategy and be ambitious for the company in terms of value creation and work collaboratively with management to ensure delivery against that,” Chris said, acknowledging there is an opportunity for directors to upskill their technology knowledge.
Allan agreed it’s important to bring directors along the technology journey. “You have to show the value in investing in technology, such as making it easier for customers to do business with you or reduce risk. It’s all about delivering value and maintaining productivity. You need to demonstrate the benefits because they won’t invest just for tech’s sake.”
Helen agreed. “It’s important to provide an holistic view of the role of the transformation project in the business to the board, such as increasing future customer retention or satisfaction.”
Where are they now?
Moving to the panellists’ current areas of focus, Loyalty has relaunched its entire customer proposition this year, moving away from legacy platforms and implementing new ways of managing and using data. It has also migrated to a new ecommerce platform.
“We were able to do this because we virtually restructured the business into multi-function tribes. This enabled us to move quickly, roll out a flurry new technologies and deal with tech debt. We were also able to move many functions to the cloud and reduce hardware dependence. This has given us new capabilities and an ability to work faster, eliminate silos and accelerate performance,” says Allan.
At Silver Fern Farms, Chris, who said the business makes extensive use of Microsoft Teams and 365, praised the leadership group and chief information officer for having the foresight to be actively engaged in reinvesting into the business to fulfil on the company’s ambition and strategy and for bringing on board these enabling technologies.
When we came out of lockdown we wanted to ensure we came out strong; this included a strategy refresh. We also changed our capital allocation to allow us to go faster with digital initiatives that enable strategy,” he said. The company has got great value out of tools such as Microsoft Teams which has substantially evolved since COVID through regular updates.
He noted there’s so much potential for further technological advancements in agribusiness, an area in which New Zealand leads the world and whose importance has been reinforced through COVID.
Chris explained there’s a huge future opportunity to integrate these technologies into an ecosystem that talks to each other, across operators in the system such as farmers, fertiliser businesses, meat processors and assurance and integrity providers. Enabling the ecosystem through some sort of ‘giant API’ would open up new possibilities to add value and reduce some of the challenges of disparate data sets which farmers could access with a single sign on. This would improve traceability and product assurance opportunities for instance.
“Finance people are hugely well placed to play a big role in the transformation of their companies because they understand value creation. But we need to do so in partnership with other Executives in the businesses we are part of” he said.
To view a copy of the full Webcast recording please click HERE