These days, finance teams in Asia and elsewhere are expected to do more than accounting and financial reporting, and IBM’s regional and country CFOs are no different.
At IBM Global Financing, which has been offering financing for all IBM solutions in the past 30 years, CFO Adam Wilson expects the Asia team to be active business partners. “For example, a regional CFO would leverage his/her expertise and network to assist with leads-creation of a newly embedded offering to finance services,” he says.
"The CFO role . . . is an all-encompassing job with expected responsibilities such as managing financial reporting . . . My role is also highly operational in nature and involves engagement with the marketing and sales teams to win more business”
Wilson conducted an e-mail interview with CFO Innovation on finance’s business partnering role, how his company can help companies conserve cash and still invest in innovation, and other issues. Edited excerpts:
How would you describe your role as CFO?
The CFO role for IBM Global Financing is an all-encompassing job with expected responsibilities such as managing financial reporting, business controls, pricing management (management of key risks such as residual value risk and interest rate volatility) and credit (managing the portfolio).
In addition, my role is also highly operational in nature and involves engagement with the marketing and sales teams to win more business.
This engagement may be deal-specific, transactional help or programmatic/strategic help, such as looking for new ways to enable growth in IT Services financing, or partnering with our new IBM Solution Units to further expand our footprint.
For example, a regional CFO would leverage his/her expertise and network to assist with leads-creation of a newly embedded offering to finance services.
In short, it is a broad spectrum of responsibilities with a high level of support. The role certainly includes endless opportunities to really make a difference in driving the performance of the business.
Tell us more about the CFO’s business partnering role at IGF.
In my IBM career, I had already experienced several roles with IBM Global Financing. Previously I have had the opportunity to be a regional CFO and now a global CFO.
When I was the CFO for IBM Global Financing in the Americas, I went on several client sales calls with our General Manager.
He appreciated the value and insights I provided knowing the perspectives I brought and contributing to the value proposition we were selling. Equally as important, it gave me a chance to understand what it was like to sit on the other side of the table and thus gained an appreciation for the challenges the sales team faced.
These experiences enabled me to be better prepared to help our sales teams win more business.
Since the IBM Global Financing portfolio at its core is based on financial instruments, finance employees tend to have a unique opportunity to play a more prominent role in this business. In fact, we saw a number of finance employees transition into sales roles and have since been effective and successful.
What advice can you give on nurturing the global CFO/regional CFO/country CFO relationship?
In my opinion, the most important trait a global CFO should demonstrate when working with the regional/country CFOs around the world is to spend the time to listen and really understand the unique challenges facing the various regions.
Many times, our first instinct is to globalize and drive consistency across the globe or jump right in and solve the pressing issues on behalf of the team. However we need to recognize that there are unique differences that may require non-standard solutions that can only be found by spending time with the teams.
Especially in the case of new technologies adoption, our deferred or streamed payment options allow clients to conserve cash for core business requirements
By doing so, we are able to gain an appreciation for their environment and the challenges they are facing.
I believe small but thoughtful behaviors can help to strengthen these relationships as well. I have bi weekly checkpoint meetings with all CFOs.
With our Asia Pacific, Japan and China CFOs I have the meetings at my evening/night time so it is morning for them. They are already involved and participating in calls around the clock with US based HQ teams. The least I can do is to provide them a few meetings on their time zone.
How significant is Asia as a market for IBM Global Financing?
Asia Pacific is an important market for IBM and IBM Global Financing. There are tremendous opportunities for growth, and clients in Asia Pacific are understanding the value of working with us to maximize their cash flow, minimizing risks while gaining speed-to-market.
Clients want to conserve cash and IGF presents an attractive value proposition, especially when many industries need to transform their businesses and/or save cost.
With the rapid adoption of new technologies to drive business growth, IBM Global Financing is helping clients to fund innovation in order to capitalize on first-mover advantages.
For example, in the area of hybrid cloud implementation, having a flexible payment option dramatically reduces the risk for our clients as they rapidly adopt new technologies to drive business growth.
Interestingly, many of our conversations with clients are not about the notion of ‘needing cash or funding’.
Especially in the case of new technologies adoption, our deferred or streamed payment options allow clients to conserve cash for core business requirements. They realize ROI as they continue to pay, thus matching project costs to benefits.
How does IBM Global Financing determine whether an organization is qualified for financing?
We have a dedicated credit organization that looks at a wide spectrum of inputs in order to determine the feasibility to provide financing and the ratings assigned to the respective clients’ organization. Ratings from agencies such as S&P and Moody’s are definitely part of the inputs that the team analyzes.
We also analyze our clients’ company financial statements. Our credit team may also request for a meeting with the company’s CFO to gain a deeper understanding of their business, and therefore make sharper assessments.
Can one company be charged higher or lower interest rates than another and granted different terms, depending on creditworthiness, being a client of other IBM units, planned purchase of IBM products and services as opposed to competitors (though I understand non-IBM services can also be financed), and so on?
The final price we offer to our clients is dependent on many factors, from the interest rate environment in the location that they operate, to their creditworthiness.
The price consideration is also dependent on the type of transaction they are financing. IBM Global Financing offers a broad portfolio of financing options for clients, including Fair Market Value leases where the residual value of the equipment being leased is considered, to a loan where it is straight money over money transaction.
All of these factors are considered to determine the final rates to our clients. We also have many offerings that provide special low rate financing options to our clients acquiring technology or solutions that are part of our special promotions or programs.
To that end, we constantly encourage our sellers to be engaged early in deals along with sellers from the IBM Brands or coverage teams. By engaging early, our sellers will have better appreciation of the clients’ requirements; hence able to provide the best financing option to suit their needs.
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