Eric Cheung is in a sweet spot. As CFO of enterprise software provider Unit4 Asia Pacific, he has access to “change-embracing solutions,” in the company’s phraseology, that are designed to provide “real-time financial visibility and control across people, processes and systems.”
These solutions are all being deployed in the company – Unit4 makes sure to drink its own champagne – and the results can be heady, particularly when it comes to finance transformation.
It is incumbent for Unit 4 to use its own products and demonstrate success. Why would a company buy enterprise software that the vendor itself does not utilize and make work?
“We have consolidated the finances of all our offices into a single ERP system under the direction of one finance expert,” says Cheung. “It makes a lot of sense and saves us a lot of costs in the long run because in doing so, we are minimizing repetitive work and standardizing our finance processes under one regional location.”
That’s just the beginning. “I recently told our finance team that within the next five years, many of their jobs will no longer be in demand due to technology and automation.” Thanks to ERP, financial management, HR and payroll, and other enterprise software offered by Unit4 and its competitors, enterprises will no longer need people to perform low-value transactional reporting.
The challenge for Cheung, as for almost all CFOs, is the effective redeployment of the freed talent to tasks that add value to the corporate decision-making process. “There is a lot of pressure for today’s finance professionals to move out of their data-reporting comfort zone and up the value chain into higher value positions involving forecasting and strategy,” he observes.
Drinking your own champagne
Software companies like Unit4 are at the forefront of this revolution. Unlike CFOs who may worry about cost, integration with legacy systems, change management, buy-in from the top and other issues, Cheung is already ahead of the game since it is Unit4 that develops and deploys the technology systems.
Indeed, it is incumbent for Unit 4 to use its own products and demonstrate success. Why would a company buy enterprise software that the vendor itself does not utilize and make work?
There is a fair amount of champagne to sip. Unit4 specializes in developing Enterprise Resource Planning (ERP) software for the public and commercial sectors. An ERP system is typically an integrated database that a company uses to track and manage data from various internal departments such as manufacturing, marketing and sales, inventory and shipping and payment, often in real time. This facilitates the flow of information between all the business functions, minimizes errors and raises operational efficiencies within an organization.
Other specialist Unit4 products include Financial Management, standalone or as part of the ERP system and delivered on-premise or on demand via the cloud, Consolidation and Cash, Financial Audit, Corporate Performance Management and Human Resources Management.
Notably, it is in the human resource and talent development space that Unit4 has a niche and where it enjoys an advantage over its competitors in Asia Pacific. One example is Unit4’s Prosoft HRMS, which aims to streamline the HR function and enable firms to manage their recruitment and employee development processes more effectively and efficiently.
“All our recent product launches have been focused on providing solutions for human capital-intensive businesses,” says Cheung. “We are also developing ERP systems that address change in organizations undergoing HR overhauls as a result of M&As.”
Streamlining processes, freeing up talent
He notes that in the tech sector today, an increasing number of companies such as Facebook and LinkedIn (and Unit4 itself) have adopted asset-light models. Much of their value is now centered on human capital.
“The new tech companies all have very minor cost bases,” Cheung observes. “Instead, they are recruiting talent to harness the Internet and extend their reach across the globe.”
“Now, every tech CFO is thinking of a way to transform their cost structure and lighten their balance sheets to grow more with less. This is the way the tech sector is being disrupted by new technology.”
“It takes courage for Asians to stand up and say, ‘I want to make a difference.’ So, once we see someone with that kind of potential, we grab them”
One example of how Cheung is streamlining costs at Unit4 is by setting up a single office to handle the firm’s regional finance function. That includes all the receivables and payables and general ledger functions of Unit4’s 13 offices across Asia Pacific
Cheung’ primary goal is to increase the overall productivity of the firm. So, by consolidating the basic finance functions under one roof, the CFO isn’t just helping the firm free up monetary resources that can be ploughed into investments.
He is also freeing up talented employees who can be redeployed into higher value positions in the firm. “Streamlining our processes and having the right system to manage the transactions and data is necessary for the firm but it will not work without someone in the driver’s seat to interpret the data, make decisions and steer the course,” he says.
Ultimately, Cheung is looking to groom a handful of promising employees to become trusted business partners of the firm. “As CFOs and finance professionals in the current environment, we are no longer just bean counters,” he says. “Today, we are expected to contribute to the overall growth and strategic direction of our firms.”
“One of the key factors for the long term sustainability of Unit4 is investing behind our talent and in doing so, identifying those individuals who have the potential to become the next leaders of the company.”
That’s actually easier said than done. In the course of working with Unit4’s employees and vendors, Cheung has discovered that soft skills, that is, the ability to communicate effectively across the firm and manage conflict, are sorely lacking across the region.
“Having the technical ability is one thing but it is the soft skills that differentiate between an employee who will make it to the top and one who will not.”
Many employees also lack the right attitude. “The No.1 thing I look for when hiring or grooming potential talent for leadership positions is a positive, can-do attitude,” says Cheung. “Many candidates have impressive experience and qualifications but if they don’t have the right mindset when it comes to overcoming challenges, why invest in bringing them to the next level?”
He believes that candidates who possess the right soft skills and leadership attributes are hard to find in Asia Pacific due to culture as well as the nature of the education system, which imposes many restrictions and constraints on otherwise talented individuals.
“It takes courage for Asians to stand up and say, ‘I want to make a difference.’ So, once we see someone with that kind of potential, we grab them,” adds Cheung. “This will be my challenge as CFO in the years ahead - identifying a future leader with the right mindset who can take over my role as a trusted business partner of the firm.”
The ultimate outcome of all this is a productive, profitable and sustainable business, one that consistently grows the topline and bottom line and keeps stakeholders happy with satisfactory ROI.
The way Cheung sees it, using technology to internally streamline processes and raise productivity is the only way for Unit4 to maintain a competitive cost base so that it is better positioned for growth and to fend off acquirers.
“In this industry, you can either be a technology disruptor or you can be disrupted,” he says. “In other words, we can either deploy funds to invest in making sure our products are at the forefront of the industry, or we can fall behind by being inefficient in managing our costs and sooner or later be taken over by bigger firms.”
Cheung’s strategy agenda is for Unit4 to go beyond being a tech disruptor and become a full-blown tech evangelist. “We don’t just need to make use of our own expertise to optimize our processes,” he says. “We need to change the mindset of the entire firm so that everyone is aligned to a similar goal of engaging technology to become more efficient.”
More importantly, “by walking the talk, continuously innovating and through customer feedback, we will also eventually get to a point where Unit4 becomes one of the strongest and most recognized business software brands in the market.”
A dollar saved . . .
He concedes that rolling out new products typically involves investing large sums of money on research and development, and that could take years to yield productive returns, if any at all. That provides added impetus to streamlining and cost-savings.
“To justify the money spent on innovation and R&D, we must have a plan to transform and streamline our internal systems so that we operate more efficiently,” he explains. “For every dollar invested in innovation, there must be a dollar saved on costs.
“There is no other option if we want to be disruptive in this industry. We must continue to invest in staying relevant because this generates the future revenue streams that will enable us to remain in business.”
About the Author
Kristin Kang is a Contributing Writer at CFO Innovation based in Singapore.
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