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FINANCIAL PLANNING AND ANALYSIS

Finding the Right Talent and Other Challenges in Asia

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Contents

2About this report

3Where’s the Talent?

4The Curious Professional

5A Curious Quant Who Can Tell a Story

6Business Partnering

7Conclusion

©2014 Questex Asia Ltd. All rights reserved. All information in this report is verified to the best of the publisher’s ability. However Questex Asia Ltd does not accept responsibility for any loss arising from reliance on it. The report is meant to document the proceedings of a roundtable discussion and does not provide any guarantee of any type about the products and solutions discussed. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of Questex Asia Ltd.

About This Report

Peter GammonChief Financial OfficerAbacus International Pte Ltd

Vaidyanathan RadhakrishnanVP – Finance, Asia PacificAvnet Technology Solutions

Charles YapRegional ControllerFlowserve Pte Ltd

Neel AugusthyCFO – Customer Service & Logistics APACJohnson & Johnson

Alexia GanRegional Financial Controller – South & South East Asia Kerry Logistics

Lily ZhouGroup CFOKU DÉ TA

William TanChief Financial OfficerMetal Component Engineering Limited

Malinda Portwig Finance DirectorMicrosoft Singapore

The Association for Financial Professionals, a professional society that represents finance executives globally, asked CFO Innovation to invite a select group of CFOs and FP&A professionals to a roundtable discussion in Singapore on 07 October 2014. The participants shared their experiences and ideas about how finance can recruit for, develop and retain finance planning & analytics talent, including the particular challenges that face finance departments in Asia and how they could be overcome.

This report records the insights of the following participants.

Lucy CherChief Financial OfficerNew Toyo International Holdings Ltd.

Thomas ZipperleChief Financial OfficerSAP Asia

Steven BinderVice President and Chief Financial OfficerStryker International

Deepak ChandranVice President and Chief Financial OfficerWipro Unza Holdings Limited

Hsiao Yun LiewFP&A ManagerWood Mackenzie

Jeremy GrayCFO Asia PacificWR Grace

Host ExecutiveBrian KalishDirector FP&AAFP

ModeratorCesar BacaniEditor-in-ChiefCFO Innovation Asia

This discussion report identifies the persons quoted whenever possible. However, some statements are not attributed to allow participants to express views that may not reflect those of their organization. The report is meant to document the proceedings and does not provide any guarantee of any type about the products and solutions discussed.

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When it comes to financial planning and analysis (FP&A) as a discipline, Jeremy Gray is in the same boat as almost every other CFO in Asia. “Ideally I’d love to have an FP&A analyst sitting next to every general manager,” said the Asia Pacific finance chief at US chemicals multinational WR Grace. “Unfortunately I can’t do that. Finding talent is a challenge in Asia.”

Alexia Gan, Regional Controller for South and Southeast Asia at Kerry Logistics, shared Gray’s observation. “It’s difficult because in my company, we have too many product lines and companies,” she said. “Ideally FP&A should be done at the station level. Unfortunately I don’t have the so-called talent, the people who are able to come up with the quality I desire.”

The ten other CFOs at a recent roundtable discussion in Singapore all agreed that recruiting FP&A talent is a problem, prompting Hsiao Yun Liew, FP&A Manager at consultancy Wood Mackenzie to quip: “I’m going to pass my name card around.” She had just acquired her Certified Corporate FP&A Professional qualification, one of the few in Asia to have successfully passed the exams administered by the Association for Financial Professionals (AFP).

In truth, the situation in Asia is not much different from the US and the rest of the world, responded Brian Kalish, AFP’s Director for the FP&A practice. “FP&A is a completely underserved discipline. You don’t have 18-year-old students running around universities saying: ‘When I grow up, I want to do FP&A.’ You don’t get a university degree in FP&A.”

And yet CFOs, including those at the roundtable, “are telling us all the time that FP&A is an incredibly important discipline,” Kalish went on. “But if you want to pick up a book on it, it doesn’t exist. There are bits and pieces on forecasting and budgeting, but truly no book that you can hand to someone you hired on Day One, saying: ‘Read this, go nuts.’”

This is why AFP launched its Certified Corporate FP&A Professional qualification and is conducting on-the-ground research into FP&A best practices

across the world. Kalish has also been organizing and speaking at roundtable discussions and conferences in North America, Europe and now in Asia.

“There’s plenty of overlap,” he said, referring to the issues that CFOs and FP&A professionals bring up in meetings across the world. “There are no national constraints in FP&A, unlike in accounting and treasury. The skills are universal, whether you’re in Argentina, Germany or China.”

Where’s the Talent?But while the challenges are numerous and

various, finding the right talent comes first and foremost. “I find it very difficult to get people with the right experience,” said Singapore-based Steven Binder, VP and CFO at medical devices maker Stryker International. “A CV would look very good, but when you start to talk to people and you actually drill down, you find they’re not necessarily involved in what they’re doing or they do it but they don’t know why they’re doing it.”

AFP’s Brian Kalish (left) and Johnson & Johnson’s Neel Augusthy

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“This is a fundamental issue,” agreed Neel Augusthy, CFO for Customer Service and Logistics, Asia Pacific, at healthcare giant Johnson & Johnson Medical. “They don’t know why they are doing certain things. They’ve never even seen the products. They account for them, they do analysis, but they don’t necessarily understand what the products look like. They haven’t even been to the warehouse.”

At his company, Augusthy sends the FP&A team out to the field. “I want them to understand what the products are and where they are, why we sell XYZ for a certain amount in certain markets and do not sell them in others. I even want them to go and see surgeries so they understand why certain products are used in certain surgical procedures.”

One issue that surfaced in the roundtable discussions that Kalish has attended is the possibility that CFOs “may be looking for a purple squirrel.” The FP&A person you are looking for may not exist, said Kalish. “Are you asking the right questions to find the right people? When you are putting together the requirements for the jobs, are these really the skills and the experiences that you need?”

“When you say, ‘It’s got to be 10 years’ experience,’ you’ve just knocked out everyone who has nine years’ experience or less. Should it be seven or five years? Do they really need to be a chartered accountant or CPA?” Of course, you can always poach talent, but that can be an expensive and ultimately unsustainable

strategy, particularly if everyone is looking for an accountant with ten years’ experience in FP&A.

The default qualification in finance is accountancy, but if you break away from that, you would broaden the talent pool, said Kalish. His interactions with finance organizations suggest that possession of three characteristics is more important than, time, experience and other restrictions.

You want someone “who is curious, who can do the math, and who’s a great storyteller,” declared Kalish (see box story, A Curious Quant Who Can Tell a Story).

The Curious Professional“I think the curiosity aspect is spot-on,” said Peter

Gammon, CFO at Abacus International, a provider of travel solutions and services that is owned by a consortium of leading Asian airlines. “You have to want to understand why, and when you get the first answer, you still need to understand why it occurred.” An incurious FP&A professional would tend to stop at that first answer just to have an explanation to pass on to decision-makers.

“Actually, being curious is not the issue,” said Thomas Zipperle, SAP South East Asia CFO. “Making use of that curiosity and functional knowledge and being confident enough to ask questions and challenge the status quo are not that common in this region.”

“The company culture has to support this as well,” he added. “A lot of people know the answers to the issues, but they are afraid to speak up. We need to encourage them to challenge the status quo and the management.” Agreed Malinda Portwig, Finance Director at Microsoft Singapore: “You’ve got to have a company that wants to also evolve. You can’t go and say that one person is going to change the whole company. It’s got to be in the culture of the company.”

The company’s hiring practices can also hold back FP&A recruitment. “Unfortunately in Singapore, and I think in many other countries, it’s almost like, show me a degree or qualification, and then you’re through the door,” said Gammon of Abacus. “Then you can consider if the person is suitable. But if you don’t have the qualification, you don’t need to apply.”

Do they need to be chartered accountants? Not

You want someone “who is curious, who can do the math, and who’s a great storyteller.” Those three characteristics are more important than time, experience and other restrictions

Jeremy Gray of WR Grace and New Toyo’s Lucy Cher

4

FP&A Manager Hsiao Yun Liew

Wipro Unza’s Deepak Chandran (left) and Thomas Zipperle of SAP Asia

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A Curious Quant Who Can Tell a StoryWhen she was interviewing for an FP&A job, Hsiao Yun Liew was given one hour to fashion a 15-minute PowerPoint presentation from a spreadsheet that she had just seen. She passed the test with flying colors and is now FP&A Manager at global data intelligence consultancy Wood Mackenzie. The experience solidified Liew’s belief that FP&A professionals need to have technical skills, curiosity and the ability to turn numbers into a convincing story.

Liew’s technical skills are not in question. She recently passed the two-part exams for the Certified Corporate FP&A Professional qualification, which is administered by the Association for Financial Professionals. “I was searching the web for a ‘proper’ FP&A certification and chanced upon it,” she recalls. “It seems like the only FP&A certification available.”

The course content is designed to be transferable across geographies. Candidates are given access to case studies, modeling problems, practice tests and helplines. They can then book to take the exam during one of two testing windows, typically from February 1 to March 31 and from August 1 to September 30.

Is it all worth it? Yes, says Liew. “It gives me a lot more confidence in dealing with business partners, with the knowledge gained as the backbone. Secondly, by embarking on the learning, it demonstrates to employer or prospective employers that one is determined to develop in the FP&A field.”

She says the general principles are the same in the course and at work. But “I was exposed to a more structured way of looking at FP&A, as well as some key performance indicators I was not exposed to

before.” One such KPI is rate of renewal, which was not relevant in her previous FP&A posts at Caterpillar and Stanley Black & Decker.

But that indicator is important in Wood Mackenzie, says Liew, because a big part of revenue comes from subscriptions to data, with consulting accounting for only 20%. In the FP&A coursework that AFP developed, “there are standard definitions for most of the KPIs. There’s also a consistent way of calculating each one.”

Being an experienced quant – someone who possesses the ability to apply mathematical and statistical methods – is obviously a big advantage. But Liew also confers a premium on curiosity. “If you are not curious, you would not think of asking the sales person: ‘Why are you doing this? Why are you adopting these marketing strategies?’ You would just accept the proposal as it is.”

Curiosity should drive the FP&A professional to ask questions about other ways of achieving the sales goal and trying out new things such as e-marketing. It’s also curiosity that makes the FP&A specialist step out of his or her cubicle and talk to the frontline people and see how the company’s products are made, marketed and sold.

And in talking to the rest of the business, including decision-makers, the FP&A professional must be a good story-teller as well. Not everyone can divine trends and patterns from the voluminous numbers in a spreadsheet. And they shouldn’t be expected to. That’s FP&A’s job. For Liew, it’s a skill that’s certainly proved invaluable to her career.

necessarily, Kalish said. “Forget about CVs to some degree,” he said. “I get people who say: ‘I don’t care what background they have. I don’t care where they went to school. Give me curious people. If you give me someone who is curious, I can make a great FP&A person out of them, because they’re not just doing their job, they’re asking why.’”

There’s something to be said about hiring accountants, though, said Deepak Chandran, VP and CFO at personal care and skincare company Wipro Unza, which is part of the Indian outsourcing major Wipro. “A lot of our FP&A resources are accountants. That’s just a check box for us in the IT and business process outsourcing part of the business, where understanding of accounting standards, policies and practices is critical.”

That’s not necessarily the case in the consumer goods business, however, whose operations are different. “So we hire fresh graduates in various subjects, not just accountants,” he said. “We have come to hire based on attitude and the ability to question and challenge, and not so much on technical qualifications alone.”

The next step is training, and this where AFP’s FP&A qualification becomes an option. For around US$1,000, companies can sign up their people for the coursework, which can be accessed online anytime. Helplines are also available. Candidates are provided with case studies, practice tests and modeling problems. They can complete the course as fast or as deliberately as they need. The two-part computer-based exams are held twice a year in accredited centers in many Asian cities, including Singapore.

Business PartneringLike Johnson & Johnson’s Augusthy, Liew, the FP&A manager, believes

that a good way way to train for communication and business partnering skills is to expose the FP&A professional to the rest of the business. “I learned the most FP&A skills when I was with [previous employer] Caterpillar doing sales operations planning,” she recounted.

“That’s when I actually got out to talk to the dealer representative, got out to talk to the frontline people, to ask them about their forecasts. I had the opportunity to understand how demand and supply factors are driving sales.”

“If you are looking for talent,” she suggested, “look around for someone who has sales operations planning experience, people who are in the supply and demand planning. They may not be accountants by training, but they are good with numbers and they actually understand how external forces drive the internal finance. You just need a little bit more training in terms of financial skills.”

What about keeping FP&A talent in the organization? “It will be a challenge retaining FP&A people,” conceded Liew, who has herself switched jobs several times. “After they have learned everything about the industry, would they actually go on and move into other industries to learn more?”

But it should be possible to keep them in the company. Lily Zhou, Group CFO at fine dining chain KU DÉ TA, recalled the time she was SVP Finance & Operations at LVMH Perfume & Cosmetics China. “We promoted internally those people working in accounting who have a curious eye and open mind,” she said. And the FP&A team is compensated well – on average, 15% to 25% more than the competition.

More sustainable, perhaps, is the tried-and-tested approach of creating a career path for talented FP&A professionals. If they know they can cycle out to operations or become a CFO in time, they are more likely to stay on. “I want to hire the next CFO,” said Johnson & Johnson’s Augusthy. “It’s my responsibility, once I’ve hired a curious person, to create that plan for them.”

“I had an FP&A analyst who became the FP&A manager, and now she’s a product manager because her FP&A work broadened her understanding of the business,” said WR Grace’s Gray. “Having gone through that, she can probably become a more senior FP&A manager and get on her way to becoming the CFO.”

Microsoft’s Malinda Portwig and William Tan of Metal Component Engineering

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“A lot of people know the answers, but they are afraid to speak up. We need to encourage them to challenge the status quo”

At Wipro, “many of our CFOs have come from FP&A backgrounds,” said Chandran. “Now we ensure that those who join the finance organization join the FP&A practice first.” The experience gives them “the overall sense of where the business is headed and how the company is doing, which division does what and what their business drivers are. And then we farm them off to various parts of the finance team.”

ConclusionThe discussion veered to other related topics,

including the importance of a technology-enabled infrastructure that allows sharing and communications across various FP&A locations, how the CFO can best remotely manage FP&A teams scattered across the region, and the desirability of having an FP&A analyst sitting beside every general manager.

“When I’m talking to my FP&A analysts, I tell them that their job is really to make the company make better decisions,” said Gray. “They know they’re being successful when there’s no real decision-making meeting held without the FP&A analyst being brought on board.”

“They have to balance being reactive – obviously they should be working for the general manager and

doing analyses that he’s requesting – and being very much proactive in terms of looking at the financial statements and highlighting areas that maybe management isn’t seeing and that they should be focusing on.”

But in Asia as in the rest of the world, finding the right talent is still a problem. That’s where initiatives like the AFP’s FP&A certification exams and other programs can help. “How do I meet people that I may want to hire?” asked Kalish. “How do I meet people that may want to hire me? Where’s that network? For FP&A, this hasn’t existed.”

Building that network in Asia can start with roundtable discussions like this one in Singapore and the certification program that is now going full blast. “We have candidates from about 39 countries take the exam, or are planning to take it, over the next one or two test cycles,” said Kalish. “We’ve seen a lot of interest from around the world.”

This is good to know. CFOs need all the help they can get to ensure there is a steady supply of talented FP&A professionals who will provide the information and insights to make the company come to the right decisions.

Steven Binder of Stryker International and Lily Zhou of KU DÉ TA

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“Many of our CFOs have come from FP&A backgrounds. Now we ensure that those who join the finance organization join the FP&A practice first”

About CFO InnovationAn integrated digital, conference and research platform of Questex Media in the US, CFO Innovation aims to provide strategic intelligence to the region’s CFOs, finance directors, controllers and treasurers. It reaches more than 25,000 finance professionals through its three-times-a-week newsletters and regularly updated website.

CFO Innovation organizes annual two-day CFO Innovation forums in Singapore and Hong Kong, and other conferences in Jakarta, Kuala Lumpur, Manila and Shanghai. It also broadcasts webinars and conducts research on a wide variety of finance, accounting, FP&A, treasury management and career development topics.

For more information, please see www.cfoinnovation.com

About AFPHeadquartered outside Washington, D.C., the Association for Financial Professionals (AFP) is the professional society that represents finance executives globally. AFP established and administers the Certified Treasury Professional and Certified Corporate FP&A Professional credentials, which set standards of excellence in finance.

The quarterly AFP Corporate Cash Indicators serve as a bellwether of economic growth. The AFP Annual Conference is the largest networking event for corporate finance professionals in the world.

To learn more about and sign up for the Certified Corporate FP&A Professional qualification program, visit fpacert.afponline.org.