Maximising opportunities from the pandemic

The fallout from the COVID-19 pandemic has brought uncertainties to organisations around the world. Old business models have been disrupted, while new ones have sprung up. On the people front, many employees have developed insecurities over their jobs and future.

However, the crisis has also created opportunities for businesses to reset their modes of operating, and look to new and more sustainable ways of doing things. Amid this shifting landscape, finance leaders have a unique opportunity to position their organisations for long-term growth by leveraging innovation and talent to navigate the challenges ahead.

With international travel coming to a halt, for instance, hospitality group Marriott Vacations Worldwide has had to throw out the rule book to continue to survive. Through the use of video conferencing technology like Microsoft Teams and Zoom, the company started conducting what it dubs "Virtual Tours" and "Direct Sales", which enabled it to replicate the face-to-face tour and sales experience online.

Due to COVID-19 restrictions, the firm also faced long delays in sending contracting documents by courier to customers residing in different countries, resulting in sales cancellations. It managed to resolve this issue through "digital contracting", where soft copies of contract documents could be sent to customers via digitally secured envelopes for their e-signature and return.

"With this approach, we not only benefitted from faster turnaround time of the documents, but also moved away from having to retain hard copy of documents, which in turn reduces storage and administrative costs," said Jessie Lim, Chief Financial Officer (Asia Pacific, Europe and Middle East), Marriott Vacations Worldwide.

Taking the long view

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Beyond tackling the immediate challenges posed by the pandemic, local bourse operator Singapore Exchange (SGX) decided to look beyond the horizon for opportunities to drive long-term growth.

Even though the company was still generating strong cashflow with no near-term liquidity needs during this challenging period, it decided to undertake a public credit rating exercise, and issued a Euro-denominated convertible bond and a US dollar corporate bond this year. These two capital market transactions were the first that SGX - as a listed company - had ever undertaken.

"Strategically, we diversified our funding sources, lowered our cost of capital and retained financial flexibility, which supports the company's longer-term growth agenda. Our impetus was how we can remain resilient and grow faster at the same time," said Ng Yao Loong, Chief Financial Officer, Singapore Exchange. "The COVID-19 pandemic has reinforced the importance for companies to take a longer-term view in their businesses, operations and finances."

Choosing to transform

For ground handler SATS, the finance team took swift action to right-size the company's cost structure and shore up its cash reserves to insulate the business and its people. Gradually, with cost and financial pressures alleviated, the firm had to decide whether to take a conservative approach and wait for the storm to blow over, or take steps to transform the organisation.

"We chose the latter and continue to pursue key transformations for the group, including the implementation of a new integrated ERP (Enterprise Resource Planning) system group-wide. On the people front, we have invested in job redesign and staff redeployment exercises; mobilised to reskill and upskill thousands of our employees to stay relevant, feel valued and be truly sustainable," explained Manfred Seah, Chief Financial Officer, SATS.

"We have also seized the opportunity to accelerate new business development. Building on our core competencies and what we do best, we focused on new growth areas in non-travel food, e-commerce logistics and security services in Singapore and the region, where relevant."

Accelerating digitalisation

The pandemic has also accelerated the adoption of digital solutions and created new and agile ways of working, making such initiatives a prerequisite for how businesses compete today.

For instance, SATS has worked to streamline processes that are fully integrated with the business, to optimise for scale and efficiency. "The pandemic has allowed us time to thoroughly review, simplify and automate the standard processes, thus enabling all stakeholders to have the same source data, consistent for quicker and better decision-making, and giving us the agility and scalability to remain competitive," said Seah.

"This enhances our ability to drive on-demand scenario models for our budgets and forecasts to figure where our future could be given the economic environment, and where we need to prioritise our efforts and investments. The automation and simplification in our processes would mean faster closing of our books."

Meanwhile, SGX has set itself an ambitious goal to fundamentally transform its Management Information System and ERP tools. "These are key systems - which have hitherto been implemented rather piecemeal - that will help us take different data sets, look for new business insights, undertake predictive analytics and scenario analysis, and ultimately be a constructive challenger to our business units," said Ng.

Data analytics has also proven to be an important tool for Marriott Vacations Worldwide during this time, as the company not only have to engage with its customers through different channels, but also find a way to expand its customer base.

"Using data analytics, the finance team must partner with the business to identify opportunities to up-sell to existing customers, improve sales success rates, improve margins on sales through better pricing strategy or more efficient cost of sale," said Lim.

A more strategic role

Looking ahead, the role of the chief financial officer (CFO) is evolving from a chief accountant to becoming a strategic business partner, aligning with the CEO and board to drive value in the organisation.

"As the CFO is uniquely placed, with full sight of and responsibility of the enterprise, he should adopt an entrepreneurial mindset - within the bounds of good governance and ESG rulebook, to partner the business to focus on value creation activities to ensure a sustainable impact to the organisation," said Seah.

Ng agreed, arguing that CFOs need to move away from stabilising the business to a renewed focus on enterprise growth, as the world learns to live with Covid. "This means supporting the Board and CEO with objective and insightful understanding of the business and trends, maintaining the balance between future and present, and communicating the business priorities to external stakeholders."