Coming to Asia: A Global CFO Seeks to Find His Footing

Vancouver-based Clarence Wong is no stranger to what may be called time-zone finance. Before becoming Vice President, Finance, at Canadian audit and risk management software firm ACL, he was controller for North America at German giant SAP and Boston-based Sophos.

“When you talk about frustrations of language and cultural differences, those are pretty common,” he says of being a regional finance executive. “The beginning of the day in Germany is midnight in Vancouver; the end of the day is 8 am here. Sometimes I would be on the phone from 6 am.”

These days, the shoe is on the other foot as ACL builds up its presence in Asia. Now global CFO, Wong recently visited Hong Kong, Singapore, Manila, Kuala Lumpur and Jakarta. He spoke to CFO Innovation’s Cesar Bacani about the role of the global CFO, cloud-readiness in Asia, governance and risk, and other issues. Edited excerpts:

It can be difficult for regional CFOs to deal with the global CFO and others in headquarters. What has been your experience?

When you talk about frustrations of language and cultural differences, those are pretty common.

People need to understand that it’s not completely acceptable to use language other than a common language. If someone is speaking in German and someone else is speaking in Mandarin, but both of them understand English, I think it’s more acceptable to use English as a medium of communication.

In terms of time-zone differences, there’s a lot of bias towards the head office’s time zone. I think that awareness of where you’re calling to is also something that both sides can appreciate.

I used to work with a German software company. The beginning of the day in Germany is midnight in Vancouver; the end of the day [in Germany] is 8 am here [in Canada]. Sometimes I would be on the phone from 6 am [in Vancouver]. You’re catering to the head office time zone.

This is the part where you have to find the happy medium . . . They go for a long way when you build awareness on both sides. But if this is not noticed and called out [by those outside of headquarters], it does not help the cause.

You’re Canadian. How was the cultural fit and working relationship with German headquarters?

Canadians typically try to be the mediator, the middleman, not clash. German culture is a bit more bold and they tend to have a firm notion of what they want.

However, I think that you become more successful if you have the soft skills of negotiation. I think that German people are still people and they can be negotiated with. But you have to be smart about it.

I’ve worked in a lot of global companies like UK firms, French firms, American firms, they’re all different in some ways. But even in a working environment, even in the same company, you have to understand the other party before you can negotiate effectively. So you have to consider that.

That’s part of being a CFO, to be out there and understand what the differences are. And you can actually use that in your daily work.

Here in Asia, there seems to be a feeling that Western headquarters do not really understand the way business is done in this part of the world.   

I have encountered this, but I think that this situation is actuated by both sides. I think it’s not only head office in a global environment that is pushing for a more aggressive number and trying to apply corporate values and objectives and strategy into how they do planning.

It’s an education process for both sides. What is the market condition within the specific country or region? Who’s asking the question? Who’s providing the answer?

Targets are typically negotiated in some form at the high level, even. It’s not always one-sided.

But because people negotiate in different ways, you might get adverse results. And certain cultures speak up more than others. There are certain cultures that are more bold; other cultures are more quiet. You might have an imbalance in negotiation.

Is it a good idea for global executives to come to Asia and for regional staff to visit headquarters as well?

I completely agree.  Not only do you understand the overall company more and the diversity of the company, but you also learn a lot more about the market conditions and the people and so on. I don’t believe you can effectively do your job sitting in your office all the time. I think you actually have to go and see and understand and meet people and discuss in person.

As CFO of ACL, you were just here in Asia. How was your trip in terms of dealing with Asian businesses?

Definitely diverse. I travelled to Hong Kong and Singapore. I was in Malaysia, Indonesia, Philippines and Singapore again. I spent a bit of time understanding the business and cultural differences – how you do business in person, how people present themselves. It was very interesting. I thoroughly enjoyed it.

Asia is a growth area for ACL and a lot of companies, because Asia holds a lot of emerging markets.

Increasingly I’m finding that a lot of CFOs are being harnessed by marketing and sales to speak to the CFOs of the potential clients.

I have a pretty good relationship with the sales area, the business. Even if the products are not necessarily for finance folks, in the past I was utilized in other companies to help close deals, try to help navigate through procurement cycles and so on.

I think senior finance leaders do have a lot of knowledge of the purchasing cycle, so it can help the sales folks of your own company. In our particular case, for ACL, the people that we’re selling to are finance executives. Fortunately I speak the same language so when talking about the products of our company or maybe concerns or barriers to doing the deal, I can probably alleviate their concerns.

Asian companies are said to be leapfrogging legacy technologies that their peers in the West had adopted years ago and adopting the latest and most cutting-edge systems and processes. Are you finding that this is the case?

I think so. For example, certain areas in Asia have shared services facilities. When you have that case, you need software automation.

I do see that there is big potential for installations for high user counts in Asia. It’s emerging markets for us because they are not using competing products. They’re looking for a new solution. 

It’s not like in North America where maybe they’ve used something else for quite a long time. [In emerging markets], they’re not replacing anything.

What is finance’s remit at ACL? Is it still accounting, reporting and compliance?

Proportionately, we do have a few people within the planning side of my finance organization. I do have five people dedicated to planning. We have relied on that type of skill set to be able to partner up with the business and to grow the business.

I think the traditional finance function serves its purpose, but like a lot of companies, we are looking to be as efficient as possible on those core activities and spend the time and more of the resources and skill sets on the value added activities of business partnering, analysis and planning.

I’m guessing, though, that since you only have four people in finance for Asia, they are primarily in the traditional side at this point?

They’re not really on the analytics yet. But as we grow our business more materially in Asia, we will spend more effort into up-skilling the people in Asia.

Are you finding that enterprise software solutions delivered on the cloud are in demand in Asia?

Singapore, Hong Kong and the Philippines are more cloud-ready. Other countries are further down the chain. Maybe in some ways it’s good we have both cloud and on-premise.

But overall people are already using many instances of cloud, whether it’s ERP, whether it’s expense management, whether it’s Salesforce.com CRM, those are all cloud.

In ACL, we use both [platforms]. The GRC [Governance, Risk and Compliance] product is cloud. Our other products that started earlier, like the data analytics and continuous monitoring products, are on-premise.

Our ERP is a cloud solution as well. We don’t have ourselves an ERP product; we’re more purpose-specific than ERP, which is a more of a general solution.

Would you say that GRC is the most in demand ACL solution in Asia, given the governance issues we have here?

It’s growing the fastest, because it’s one of our newest products, so the growth rate is the highest. Our other products have many years of being in existence. Our company dates back 27 years, so we have a lot of volume in our sales from data analytics and continuous monitoring. GRC is about three years, so it’s the fastest growing [from a low base].

When we talk about T&E, anti-bribery, anti-corruption type of package, like a solution, it’s a combination of different software products that we offer, with scripts that are attuned to the problem that you want to solve and the services to install it. It’s almost a turn-key solution.

How does the GRC solution work in ACL itself?

Basically, you can ask it to do an analysis of a data pool and then you have outliers, essentially exceptions. Those exceptions will trigger notifications to pre-defined people that there is a warning, that you have an action item to do.

In simple terms, it’s identifying the risks that you need to address on a real-time basis.

We use it even for opportunities. We look at different ways, like monitoring performance metrics, and notifying people and showing which performance indicator has more opportunity for improvement.

We use it for the financial close process. We use it for monitoring people’s progress on our mandatory ACL product training, performance metrics in professional services, monitoring, dashboarding, exception reporting. We use it in various instances.

In terms of the financial management, the reporting, the monthly closing, I imagine because you have all these automated systems and analytics, you would be best in class? For example, do you close in real time?

I’d love to have that. I think that in a lot of ways we all strive to be best in class in what we do. The reality is best-in-class is not a stagnant aspiration, it’s always moving. Everybody is moving the needle.

 I think we’re getting every year, every day. I’d be hesitant to say we are absolutely best in class, but I hope we’re pretty close.

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