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From The Seat of Change
The CFO journey to change and recovery have been both singular and instructive, as companies start at different points on the same path of upgrading systems, transforming policies and extending the duty of care in turbulent times. Raghavendran Swaminathan, the CFO of Wipro Enterprises discusses how the crisis changed consumer behaviour, internal operations and what made CFOs digital natives.
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Cash conservation. Zero-based Budgeting. Supply chain disruption. Consumer behaviour shift. Data Democratisation. Digital transformation. The litany of business changes that accompanied the pandemic have unearthed opportunities and added constraints, revising the scope of expectations and responsibilities from a finance leader.
Raghavendran Swaminathan, the CFO of Wipro Enterprises Limited spoke on the specific changes he says, “I experienced the transformation of finance in three aspects. First, being the accelerated collaboration with business teams in enabling plants to continue to run and support new product introduction. Second, transform within, by digitising processes, compliances with better data analysis. And the last being, ‘skill transformation’ of the finance team, wherewith the increased digital quotient, an openness to accept technological changes has emerged.”
The Digital Reset
Swaminathan elucidates that though digitisation is not new in the finance function, it comes with more nuance and focus as the crisis forced companies to re-evaluate the speed of individual operations and each function of finance whether it is internal audit/ controllership/ audit/ treasury tax have made micro-changes which going forth will be permanently set- making Covid-19 the unexpected foghorn for radical and universal change.
A recent Gartner survey too noted that 93 per cent of senior finance leaders were aligned on their vision for the finance function in 2025, where they expect to see a function that is leaner, digital and data-driven. Swaminathan continues, “Financial transformation will allow businesses to engage a clearer vision, operate more efficiently and employ a more agile strategy. Executed properly, this can result in higher profit margins, fewer hours in the office for staff, and happier employees.”
The Dust Settles
The pandemic instituted new cashflow management disciplines, and placed strategies around spend management and cost-cutting under greater scrutiny. Speaking on the subject, Swaminathan adds how the company had little debt but was keen on maintaining its suppliers and distributors network throughout the crisis. He comments, “On the B2B side, it became important for us to track collections across the spectrum. On project business, there were deferrals and delays both on the supply side and customer side. Overall, the unit CFOs and the treasury team worked closely to ensure adequate safeguards.”
The new investments on the contrary have been more exploratory. Swaminathan explains that the company prioritises intensity in the short term and consistency in long term. Over the years, the company has made forays into various businesses viz, Aerospace, 3D, industrial automation and have made strategic acquisitions in the FMCG business for example, like the entry into the Philippines market through Splash, and Canway in South Africa.
“About two years ago, we also created our corporate venture fund in FMCG to understand how to work with and support start-ups in their journey, to learn and share our practices that can help them. We have created an SPV in Israel to invest in start-ups in the Industrial Automation space. This is under the aegis of the Israel innovation fund driven by the government,” he explains, including this to the global projects that the conglomerate is focussing on.
The Post-Pandemic Market
Previous crises have often indicated that consumers display an economic elastic behaviour where they limit discretionary spending and focus on the essentials. With the confluence of e-commerce, renewed digital payments infrastructure and the consumer preference for convenience, we see the emergence of omnichannel where players play both in the online and offline market. Swaminathan explains how even Amazon has started opening and experimenting with this and how digital-only brands can scale up in the Indian context. He believes that all FMCGs players will look for a share in the wallet of the customer and adds that the key element from an Indian standpoint would be how the per capita GDP moves, thereby increasing the share of premium and niche products.
Consumer consciousness and sustainability have found greater relevance among the millennial and younger demographic. This coupled with the global outcry for climate action has shaped the discourse around ESG. “In Wipro Consumer Care business, most of the factories maintain zero landfill and zero PVC consumption. We consistently measure our plastic consumption, water and electricity consumption, waste generation and have goals to reduce them systematically. In our Infrastructure engineering business, we ensure our factories adopted a green culture consistently through the use of eco-friendly chemicals for cleaning components. We also recycle and reuse oil to achieve resource conservation and are a zero-polluting industry,” explains Swaminathan.
He goes on to add that the leadership in the corporate climate consciousness lies with organisations that get ahead of the curve and set milestones internally that will help them have a competitive advantage. “No one size will not fit all businesses, the key is to make it contextual and relevant for your business,” he concludes.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.