Finance Veteran: Time for CFOs to Change Mindset towards Tech

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Editor’s Note: Workday—a provider of enterprise cloud applications for finance and HR—recently released the findings of a survey of more than 300 senior finance executives from large companies in Singapore, Hong Kong, Australia, and New Zealand.

While these are advanced economies in the region, 61.7% of respondents indicate their companies are using on-premise or combination systems.

Lee Thong Tan, Regional Financials Lead, ASEAN & North Asia at Workday—a finance veteran himself—shared with CFO Innovation’s Teresa Leung some insights into the survey findings.

Tan has more than 25 years of finance leadership experience in listed and privately-owned MNCs across various industries. Before joining Workday, he led a global finance team at a US$1.2 billion Singapore-based international firm.

A chartered accountant, he is also the Honorary Treasurer of International Coach Federation (ICF) and an ICF-certified coach.

 

Lee Thong Tan, Regional Financials Lead, 
ASEAN & North Asia, Workday

How are CFOs in Singapore and those in Hong Kong different when it comes to tech-related challenges facing them?

Lee Thong Tan: The challenges facing CFOs in Singapore and Hong Kong are similar. However, the industry challenges vary dependent upon the sectors they predominantly operate in.

Over the past three to four years, most of the larger companies were still looking at legacy on-premise systems and how to migrate these to the cloud.

The challenges of inconsistent data and lack of insights across disparate systems for planning/budgeting, core accounting and analytics will still exist, if they simply “lift and shift” what they have to the cloud.

Cloud has been talked about for a long time. But why is there still a whopping 61.7% of respondents saying their companies are using on-premise or combination systems when all of these executives are from large enterprises and advanced economies in the APAC region?

LT: When I was in Shanghai four years ago, it was pretty much a cash economy. When I went again last year, one could not survive without a smart phone and WeChat.

This is a vivid example of digital disruption and transformation. In Singapore and Hong Kong, the adoption of mobile payment is relatively slow, and digital disruption in the back office is even slower.

I believe this is due to the investment in legacy on-premise systems, and the risk perceived with replacing core systems, despite how the lack of momentum in the back office may be impacting their organizations’ agility and ability to respond to digital disruption.

Cybersecurity continues to be of critical concern, but we are seeing the conversation with CFOs and Financial Controllers shifting from “where is my data stored” to “how is my data stored”.

Listen 90% and talk 10%

What are the non-tech factors that hinder these CFOs from digitally transforming the finance function?

LT: In my opinion, there are two main factors. One is the perceived business priority between the front and back offices, and the other is the CFO mindset.

The world is being disrupted and businesses are putting resources into transforming their business models and operations in the front office to stay ahead of the competition.

What CFOs need to realize is that the back office is not being revamped accordingly and will eventually slow down the business transformation and introduce more risks as more and more complexity is added.

In terms of mindset, CFOs are emotionally connected to the systems they have been using for the last two to three decades.

They are acutely aware of the risks associated with changing these core systems of record, no matter how outdated or limiting they are, and as a result CFOs are reluctant to change.

As economic growth for Asia and the world is expected to slow down, what could CFOs do to get more resources in their organizations to digitally transform the finance function?

LT: Changing their mindset and belief that Finance systems are meant to enable the finance function, and not to service the business.

Finance systems with data-rich financial and operational analytics should be made available to the front line users so that business leaders can understand not only the performance of the business, but also the underlying reasons.

CFOs and the finance function need to change their perspectives from considering “finance/ERP” as a finance-owned system, to “finance/ERP” as an enterprise solution that will bring values to users across their organizations.

In terms of mindset, CFOs are emotionally connected to the systems they have been using for the last two to three decades

What could be done to make the cloud move easier for CFOs?

LT: Moving finance systems is not an easy task.

CFOs need to understand how disruptive technologies in the Cloud can really make their enterprise more agile, with real-time information across the organization.

They’d be able to understand how these disruptive technologies can utilize modern iterative deployment methodologies to radically reduce the time, cost and risk of moving finance to the cloud.

According to the survey results, CFOs are expected to provide advice to areas outside finance. How can CFOs live up to such expectations?

LT: Get ourselves outside of our comfort zones into the steering committees of different initiatives and business projects that are at the forefront of digital disruption within their organizations.

Cyber security is one of the areas (31.7%) that CFOs are expected to offer advice in Workday's survey. Does it mean CFOs need to work closer with CIOs and/or CTOs? What should CFOs do when it comes to this?

LT: Absolutely- finance typically owns the most critical and sensitive assets of cash and financial information.

They definitely need to work with the CIO and CTO to ensure these are secured. CFOs need to educate themselves on the technologies, standards, policies and procedures that leading cloud companies are adopting and recognize that data is often more secure in the cloud than on premise.

How can CFOs contribute to cyber security?

LT: Be knowledgeable about the various risks, technologies and standards that are becoming available in the market.

I noticed you’re also a certified coach. What’s your advice to finance professionals who aspire to become CFOs given now the role has evolved and CFOs face higher expectation from the CEOs and their C-level peers?

LT: I’d advise them to use the following formula: Listen 90%, and talk 10%.

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