- Author: Tom Smith
- Posted: March 20, 2021
The CFO as Change Agent – Reducing Costs & Driving Efficiencies in Times of Uncertainty
By Alexandra Cain
New Zealand has been one of the most successful countries to manage the COVID-19 pandemic. But the nation’s early, brutal lockdown was one of the most challenging events its finance professionals have ever had to manage.
A year on, CFO Magazine was fortunate to host a fascinating webinar with three of NZ’s most senior finance professionals, facilitated by James Solomons, global CFO of online reference checking platform Xref.
The session was an opportunity for the 150 CFOs who attended it to hear how the panellists piloted their organisations as they automated and transformed many aspects of their operations to drive down costs and drive up efficiencies through 2020.
“COVID started a transformation agenda, which supercharged business leaders to understand automation,” Solomons told the audience.
Mistelle Jack is the CFO of economic development and trade promotion agency New Zealand Trade and Enterprise, which has 700 staff across 40 international offices. The government body has played a vital role supporting its exporters through the pandemic. As an example, at the start of the crisis, Jack took a phone call at 6pm one evening requesting NZ$1 million to underwrite a flight to send Kiwi products offshore.
“All freight had dried up, so it was important for us to be agile in helping Kiwi businesses and to prioritise funding. It was a challenge, but we were able to facilitate the request thanks to the agile nature and culture of our business. But as CFO, I also have to understand the repercussions of decisions like these for a Crown entity,” she explained.
Fast forward to today, and 80 per cent of the agency’s international workforce is still in lockdown, working from home. Jack says leadership and strategy was one of the biggest challenges managing the early stages of the pandemic. An added complexity was implementing automation in the finance system, a project that had just begun as New Zealand’s borders closed.
The initiative allowed NZ Trade and Enterprise to streamline a tenfold increase in the number of invoices that were being processed in support of the regional business network over just nine weeks. Jack also took the opportunity to review highly manual processes. “There was a lot of overlap before we started automating manual processes. In one case, eight people touched one process, which was a waste of talent, a waste of time and a waste of money to the organisation. So everything was up for grabs during the project. I say if you shoot for moon, you’ll land among the stars.”
When it comes to getting started, Jack said, “It’s like a state of the nation. You need to look at what you can do now, what’s going to require a little more thought, and construct your capability to deliver.”
Webinar panellist Cormac Denton, now CFO of facilities management firm PAE New Zealand, began the pandemic working for diversified hospitality group Kāpura, which had annual turnover of a little under $100 million and 950 staff before COVID. After taking a redundancy, he started in his current role in June 2020.
“Kāpura went into risk management three weeks before lockdown. It was a hard moment, trying to work out a way forward before we knew about government wage subsidies, knowing we would have zero revenue for three to four months and being responsible for our staff, who also had families who relied on their income,” said Denton.
“We had to act quickly on the strategic side to reduced costs. The business lost half its support staff, which was a culture shock for the company, which had had six years of very strong growth and was gearing up to be a $250 million revenue business looking at international expansion,” he added.
On a personal level, Denton also had to grapple with the nuances of a new sector when he moved to PAE, which changed its strategy through COVID to target not just large contracts, but businesses of all different sizes. “We needed new systems and processes to deal with anyone and everyone. So there were lots of things to work through.”
As Solomons noted, technology has been a saviour during COVID. It has given many organisations the ability to carry on as normal, working remotely, or to more easily pivot.
Andrew Chapman, SAP Concur’s head of solutions consulting, has shepherded many of his clients through the pandemic with cloud-based invoice processing and expense reporting software.
“There’s been a real focus on every dollar; controlling costs and maximising revenue and really hunkering down to make sure you’re not spending unnecessarily. Technology may generate savings that are five to six times the initial investment, helping CFOs to drive down expenses,” he said.
Denton said the key to a successful transformation project is clear communication with internal and external stakeholders about the need for change.
“It’s critical people know why you’re going through change. So don’t go dark on them. Let people know in enough time and sell the benefits. For a transformation project to be successful, it’s essential for the finance team to understand the rationale behind the initiative. Make sure everyone is aligned and make sure communication is clear on the way through.”
As Jack noted, one of 2020’s greatest lessons is an organisation’s inherent propensity for change. “Just start. Empower your team to try things and remember change is about redistributing talent, cost savings are a natural outcome and it’s essential to invest to realise efficiencies.”
While the COVID-19 pandemic may be abating, it’s not yet finished and the onus now is on finance professionals to continue on the automation journey many started last year. As Denton said, “many CFOs are looking at the bottom line; looking at how we get better.”
Says Chapman: “There has been a greater focus on technology in the last three months. People are saying, ‘we need to address the systems we put in place suddenly when we thought this was going to be a six-month situation to now looking at a more medium- to long-term solution’.”
Consequently, now’s the time to reconsider processes put in place as a stop gap a year ago. There’s a real opportunity for CFOs to assess what the business will look like in six, 12 or 18 months’ time – or even further out – and put in place strategies to support the business to achieve its goals over that time.
CFO Lunchtime Live proudly partnered with SAP Concur
By integrating near real-time data and using AI to analyse transactions, businesses can see what they’re spending and avoid possible blind spots in the budget. SAP Concur solutions help eliminate yesterday’s tedious tasks, make today’s work easier, and support businesses to run at their best.