Ortus Round Table in Kuala Lumpur: Reassessing Financial Leadership in Light of Global Trends

by OrtusClub on 27th November 2017

CFOs and Heads of Finance from prominent firms in Kuala Lumpur gathered at the Ellis Dinner to discuss and share experiences on the changing role of financial leadership. The dinner was hosted by Blackline, which as a provider of cloud software that automates and controls the entire financial close process understands the need to discuss how the role of the CFO and finance function is evolving.

Automation has been undoubtedly a driver of growth over the past centuries, if not millennia. Inventions like Henry Ford’s assembly line automated some tasks but created a significant demand for additional jobs over several years—making the adjustment process manageable from the viewpoint of organisational structure. At the speed of change we are experiencing right now, however, we are not in control anymore. Many executives see the jobs they oversee being quickly automated and find themselves unable to turn this into a growth opportunity, and not just pure cost minimisation operation. As technology disrupts the finance function, CFOs need to reassess their role to make sure their companies can, besides surviving the ongoing wage of digitalisation, use it to gain competitive advantage.

“It’s not about automating work; it’s about reimagining it.”

Good management is not enough to survive anymore. As an attendee pointed out, the CEO of Nokia reportedly said in a press conference that, “we didn’t do anything wrong, but somehow we lost.” Nokia’s case reveals the importance of rethinking the responsibilities of the CFO in the current technological landscape. As traditional audit and accounting tasks are automated, CFOs should reconsider their priorities. While mastering accounting tasks is still indispensable, automation should be used as a way to spend less time on clerical duties and instead focus on growth and innovation.

This matter is particularly important for the finance function as it often sets the limits to how far a company can experiment and take risks. Guests commented on how we must find a new way to measure value in a business and beyond the traditional financial metrics. Finance labour should be reallocated from straightforward tasks to matters such as measuring intangibles such intellectual property or R&D and, especially, communicating their value to investors and other stakeholders. The finance function can help materialise innovative ideas generated in any division in an organisation into a tangible result. Executives who see automation as a way of merely replacing jobs are missing the point of the digitalisation revolution.

cfo

“We need to celebrate transformation.”

Kodak’s inability to embrace new inventions led to its staggering downfall, as a guest at the dinner pointed out. Research on the digital photography technology and adoption curves allowed Kodak to estimate that they had roughly ten years to prepare for the transition–but they still failed. By helping cultivate an innovative corporate culture, CFOs can use their power within an organisation to prevent things like this happening. They must encourage risk-taking and even celebrate failure. CFOs can achieve this by taking on the role of “value communication.” Fear of repercussion for financially unsuccessful inventions sniffles innovation and makes companies prone to a Kodak-style fall.

Automation has freed, rather than replaced, a lot of labour in the finance function. This positions the CFO as an agent for change in an organisation that can promote a culture of continuous innovation. 

 

Attended by:

CEO & Country Head Malaysia & Brunei at BNP Paribas Asset Management

CFO at Brahim’s Group

CFO at Prudential Assurance Malaysia

CFO at Celcom Axiata

CFO at Jaya Grocer

CFO at Microsoft

CFO at Axiata

CFO Malaysia and Brunei at Zuellig Pharma

Director at Axiata

Executive Director of Tax at BDO Malaysia

Finance Director at G4S Malaysia

Head of Finance, Accounting and Controls at Standard Chartered Bank

Head of Corporate Finance at Sapura Energy

Head of Finance & Corporate Audit at Maxis

Head of Regional Digital Financial Services at Axiata Digital Services

Managing Director at Accenture

Senior Finance Manager at Westports Malaysia

Senior Managing Director and Head of Corporate Finance at CIMB

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OrtusClubOrtus Round Table in Kuala Lumpur: Reassessing Financial Leadership in Light of Global Trends

Ortus Round Table: Prevention Approach to Ransomware

by OrtusClub on 27th November 2017

CTOs and Heads of IT from prominent firms in Kuala Lumpur gathered at the Seris Lunch to discuss and share experiences on the changing landscape of cybersecurity. The event was hosted by Palo Alto Networks, which as a network and enterprise security company understands the need for having an open discussion about the growing threat of cyber attacks.

With the ransomware market soaring 2,500% in 2017 as of early October, cybersecurity is not an issue that C-level executives can merely delegate to technicians. The overall cybercrime market is projected to reach $2 trillion by 2019, making this more profitable for mafias, for example than their traditional emphasis on crimes such as drug and arms trafficking. Over the Seris Lunch discussion, attendees discussed how the lack of awareness and regulation make companies vulnerable to cyberattacks.

Keeping up with Cybersecurity Threats

While we’ve seen technical expertise on cybersecurity grow over the past decade, we now face more threats than ever. Can we keep up with the forces driving this trend? To understand this issue we need to look at the financial and personal incentives that drive hackers.

Financially, the rewards are enormous and accessible. If the $2 trillion cybercrime market were a couch, hackers would make millions from the easily reachable pennies falling behind it. Traditionally, hackers look for targets such as individuals or small to medium-sized companies, given the expected lack of retaliation. The lack of regulation on the matter makes it hard for them to report incidents and for the government to respond. Left to their own devices, most victims give in and vow not to let it happen again. The victims often have an incentive to stay quiet, as Uber reportedly did last year. Companies are remaining silent about the ransomware market, seeking to maintain customers’ trust and loyalty. This perpetuates the lack of awareness on the matter and makes it hard for the government to fight it.

Companies should expect supply and demand to drive an increase in the number of hackers in the foreseeable future. The significant financial opportunities for hackers will increasingly attract younger coders. Seen as an anti-establishment activity, hacking has developed a culture of its own that lures people around the globe. As we continue to increase the provision of computer science education—an essential task for economic growth—we face the risk of losing coders to the black market of the Internet. Governments need to set a firm limit as to what is allowed and prosecute hackers who break the law. Companies, in turn, must find a way to attract talent. Hackers could do a lot of good if employed in legal projects in both the private and public sector.

Should cybersecurity even be a corporate discussion?

Sometimes talking about ransomware and cyber threats with board directors means convincing them of their existence. Even when technical solutions exist, lack of awareness among stakeholders at a company makes them inaccessible. We must, therefore, make them see the real benefits of prevention. This is as much of a challenge for Heads of IT as it is for CFOs. Quantifying the risks of cyberattacks and benefits of a prevention approach is a difficult task. But there’s still a lot of room for us to create consciousness across the organisation such that stakeholders know about the gravity of the situation and the existence readily available solutions.

Consciousness and awareness by themselves are not enough. Guests emphasised the previously mentioned point about public information disclosure. Society as a whole needs to make an effort to allow people and organisations to be more open about the issue of cyber threats. We should encourage financial institutions, for example, to make warnings and disclosures about their cybersecurity situation and the particular menaces clients face. Right now, they only do so to a limited extent because of the fear of losing value.

While external factors like government regulation and law enforcement in cybersecurity are beyond the control of companies, there are many measures they can undertake internally to promote a prevention approach to this issue. Working on internal awareness and encouraging full disclosure on the topic will facilitate the adoption of existent solutions and allows governments and organisations to identify areas where we need to improve.

 

Attended by:

CIO at Erama Creative 

CIO at Gamuda

CIO at IJM Corporation

CIO for Malaysia and Global CIO Islamic Banking at Standard Chartered Bank

Co-Founder and CTO at iSentric

CTO at Fave Group

CTO at Mindvalley

CTO at MoneyLion Inc

CTO at Supahands

Head of Global IT Testing and Assurance at British American Tobacco

Head of IT – Global Business Services at British American Tobacco

Head of IT at Mass Rapid Transit Corporation 

Head of IT Operations at AVEVA

Head of IT Strategy and Development at YTL

Head, Business IT at TGV Cinemas

 

Hosted by:

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OrtusClubOrtus Round Table: Prevention Approach to Ransomware

Ortus Round Table: The Future of Technologists in an Automated World

by OrtusClub on 20th November 2017

CTOs and Heads of Engineering from prominent firms in London gathered at the Asta Dinner to discuss and share experiences on the impact of automation and AI. The dinner discussion was hosted by Softwire, which as a software development company engages with these technological trends on a daily basis. 

Automation offers some of the most profitable investment opportunities available to companies nowadays. From personalising products and customer experience to quantifying risk, AI will transform all business functions. Or at least we hope so. Despite these the grandeur of these promises, companies still struggle to successfully integrate automation into their value chains. At the Asta dinner in London in November 2017, guests discussed how organisational and privacy issues inhibit the adoption of AI. In addition to dealing with issues of handling data, many companies still have to gather enough data, to begin with.

automation

Cold Feet or Unqualified?

Stories of tech startups making large, established companies obsolete are becoming the new normal.  Blockbuster, for example, rejected an offer to buy Netflix for only $50 million thirteen years before it ceased its operations. Executives in companies are increasingly aware that they need to innovate now or miss out forever. However, while they know they need to do something about new technologies such as AI, they often think they lack the capabilities required to be successful in doing so.

When it comes to adopting AI companies face a tradeoff between the benefits of starting now, such as learning by doing and incumbent advantages, and the possibility of overreaching and failing. Under shareholder capitalism, most companies require a tangible ROI within the next 18 months if not less. Executives must find a way to reveal the significant and lasting value of investments in AI to shareholders and other stakeholders. For example, Google’s three classes of shares have been successful in allowing the company to innovate despite potential short-term losses and uncertainty as the company experiments with new projects. 

We can’t know exactly when the appropriate moment to jump into the AI wave is, but guests agreed on the importance of finding a balance between getting exposure to AI now and internally building technical expertise before making any big decisions. 

There’s Never Enough Data

Handling data has its complications, but the most significant limit to the applications of AI and automation is still the lack of digitised databases in the majority of the world. An attendee of the Asta dinner recalled how African telecom companies struggle to obtain the benefits of big data and machine learning in countries where a large portion of the population is unbanked, and few comprehensive databases exist. For AI to deliver its promises of economic growth, companies need to go after hundreds of millions, if not billions, of customers. There are increasing returns to scale when it comes to data acquisition due to the behavioural and market insights we can obtain with big data.

Dealing with varying national policies and many stakeholders across different countries makes it hard for a single company to expand databases and unify them at an international level. Addressing this problem will require the cooperation of the public and private sectors, as well as international organisations. Privacy laws and data regulations, many times necessary, also affect the availability of data, and thus companies’ ability to use AI. Customers justifiably worry about how data breaches can affect them, and therefore governments are accordingly regulating data ownership. Given that data marketplaces are still premature, this can further limit the potential for automating business processes.

While part of the discussion at the Asta dinner focused on how the availability of raw data and privacy concerns still makes it a challenge to use AI, the overall consensus was still that AI will transform the way businesses operate and boost growth. It’s a matter of when it’ll happen, and thus companies cannot fall behind and suffer the fate of Blockbuster.

Attended by: 

CTO & Head of Cyber Strategy of Vodafone
Senior Analyst, Development of Four Seasons Hotel
Chief Architect of UK Home Office
VP Engineering of Tom Tom’s Sports
CTO of Cisco
Head of Business Systems – Supply Chain and Innovation of Debenhams
Interim CIO of Trinity Mirror
CTO of Contiki
Head of Software Engineering of UK Home Office
Technical Solution Architect, Office of the CTO of Cisco
Global Executive Director, Digital Transformation & Innovation of Microsoft

Hosted by:

 

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CIO Hot Seat: Mark Fowler, CTO of AIA-Philam Life

by OrtusClub on 20th November 2017

Modernising Legacy Platforms

with Mark Fowler, CTO of AIA-Philam Life

Legacy platforms are complex to modify and expensive to maintain. They limit companies’ ability to compete with changing demands due to the difficulty of adding new functionalities. So why are many companies still operating as if the last 15 years had not happened?

WHAT ARE THE MAJOR CHALLENGES OF USING A LEGACY SYSTEM?

“Legacy platforms are usually 20-30 years old nowadays. When they were designed back then, it was from an intuitive perspective, focusing on functions. If you look at the way businesses actually work, they are not based on functional areas. Rather, they are based on processes or transactions oriented towards the customer. So when it comes to working with a legacy platform, businesses need to work around the functional components to actually get things done.

In the case of the insurance business, the first thing for me to say is that legacy systems don’t match the way the company wants to work. Systems should be built around processes or transactions. Achieving that is the number one challenge when it comes to legacy platforms. We need to overcome this to actually living in a digital world.”

ARE THERE ANY BENEFITS TO MAINTAINING LEGACY PLATFORMS AS THEY ARE?

“Some. The good thing about them is that they indeed have a lot of functionality. This is good when businesses are stable, but when it comes to growth it doesn’t take you where you want to be.

For us, we need to have a service-based architecture. Companies need to understand the gaps in how legacy platforms are dealing with customer needs. We need systems that are service-based, especially in companies like ours, where the main focus is the customer.

When dealing with legacy systems, the issue with addressing these customer needs is that you need to work in all the points of integration of the different functions of the systems–and you end up with a mess. We need to get to a service-based architecture that is agile and lets you make changes fast.”

HOW CAN WE DO THAT?

“We know we need an agile, service-based system. The challenge, thus, is that the business never stops. We need to run the business at the same time that we transform the technology. The key is to find the right balance between strategically changing the business and maintaining a smooth operational flow.”

DO YOU FEEL YOUR COMPANY HAS EMBRACED DIGITAL INFORMATION FROM A CULTURAL PERSPECTIVE?

“We’ve certainly embraced digital transformation from both a selling and a client perspective. The challenge is getting enough digital information and being able to use it in the decision-making or the underwriting process. AI and machine learning will help us do that. Maybe not so much in the Philippines yet, but we’re seeing it in Australia with the use of IBM Watson to mimic what a claims advisor would do. We’re looking to see how we can do that here. Still, for me, the key point is getting the data–that’s probably where we struggle the most in the moment.

From a more general perspective, in my opinion, there is no such thing as digital transformation—there is business transformation. And technology is just part of the business. I think everything in the business should be driven by customer experience, and digital is just a way of engaging with the customer. So just having a digital focus is not sufficient. You need to have a customer engagement focus of which digital is a part of. For example, every project that is part of our portfolio transformation is aligned with our objective of improving customer experience.

Each project needs to add value to the business in that sense. If any project does not add value to customer experience, we should sit back and ask ourselves: do we really need to do that?”

WHAT ARE YOUR VIEWS ON CROWDSOURCING IN INSURANCE?

“Crowdsourcing from an insurance perspective is very interesting. At the moment it makes more sense in the general insurance case than the life insurance case, which is a little different because understanding risk is harder. The key to crowdsourcing in anything is always going to be understanding risks. If you can apply AI to understanding risk, then that is ultimately going to be the way to make crowdsourcing work from an insurance perspective.”

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OrtusClubCIO Hot Seat: Mark Fowler, CTO of AIA-Philam Life