OUR CFO SERVICES PROVIDE
PILLARS OF A CFO FUNCTION
WHY OUR CFO SERVICES?
OUR EXECUTIVES ARE MATURE, EXPERIENCED, AND SAVVY IN BOARD ROOM MEETINGS THUS HELPING THE COMPANY IN NAVIGATING INTO THE RIGHT PATH.
EQUITY INVESTOR (PRIVATE EQUITY, HEDGE FUNDS, FAMILY OFFICE)
If the investor is in the minority position, major corporate actions would be taken by the investee’s board of director. Our Representation Services can help provide discipline, proper reporting, governance and benchmarking in business and finances. We help and guide our client in their preparation to meet the deadlines of stock listing as an exit for investor. Our executives are mature, experienced, and savvy in board room meetings thus helping the company in navigating into the right path.
CORPORATE BANKS OR FINANCIAL INVESTOR
For distressed or turnaround situations, we add value by providing experienced and tested senior executives in turnaround situations. Institutions with a large loan exposure to certain clients cannot afford a single delinquent client which may wipe out the annual profit. We help our clients in assuring good governance practice and proper use of money. This is to avoid side streaming, which is rampant for some companies.
FAMILY BUSINESSES NORMALLY LACKS PROPER CORPORATE GOVERNANCE, MANAGEMENT SYSTEM AND CLARITY IN BUSINESS PROCESSES. OWNERS AT THE HIGHEST LEVEL ALMOST ALWAYS HAVE TO BE INVOLVED IN DAY TO DAY DECISIONS.
For family offices that owns a vast array of fast growing companies but not maximizing its potential due to the lack of discipline in investing, unorganized investment structure, unclear IRR for project return, inadequate resource planning, sporadic ownership structure (reducing synergistic value) and the lack of harmony across Sales, Operations and Finance functions. Companies grow to such a size that embracing corporate finance and the capital market has become mandatory. Family businesses normally lack proper corporate governance, management system and clarity in business processes. Owners at the highest level almost always have to be involved in day to day decisions. This includes the issues of next generation preparation for the second generation to enter into the business. Our senior partners can be trusted to provide coaching and business insights for the second or third generation to speed up the learning curve. This is to ensure sustainability and success of the business.
For underperforming subsidiaries with a marginal CEO or CFO, our pool of talents can be a good add-on to change the board’s atmosphere. We can infuse the required disciplines, performance improvement, swift execution and turnaround strategies. Most headquarters knows what to do but does not have the time and resources to pay such detailed attention hence risks losing business momentum and opportunities at the subsidiary level.
CHALLENGES IN FINANCIAL INVESTING
Remains for institutional investor or creditor due to;
AGENCY PROBLEM FROM SPONSOR OR COMPANY;
Lack of common sense to deliver value for shareholders (conflict of interest or typical Agency Problem) from Board of Directors.
Lack of discipline in using other people’s money; in some cases management might divert the funds for project or to companies other than originally intended.
Lack of law enforcement in Indonesia cultivates ill motives of the sponsor or Board of Directors from doing the right things. (in some cases).
LACK OF GOOD CORPORATE GOVERNANCE
Lack of sense of Fiduciary duty as an appointed executive of Investor.
Low in quality and timely reporting on business and financial conditions.
Lack of knowledge in corporate finance, cash cycle management, value chain management business and costs drivers (in most cases)
Lack of knowledge in investment threshold, M&A and Risk management
LACK OF STATURE, EXPERIENCE AND STANDING
Younger directors (despite academically qualified) appointed as Representative of an Institutional Investors are sometimes having hard times in board room meetings at top level management decision process.
This awkward management process is not an ideal situation for a fruitful investment, thus might reduce the long term yield for investor.
CHALLENGES IN A GROWING COMPANY
It has been argued that CFO adds enormous value to the company, yet to find a suitable and willing CFO is not easy, let alone the annual package is exorbitant. This even leads to an excruciating situation when the company needs a sophisticated financial & business strategist to survive or to be sustainable in the medium term.
TYPICAL SOURCES OF PROBLEM:
- Financial reporting that does not reflect true conditions of the company
- Business actions was not in sync with resources leading to Financial Distress
- Unclear business model and Value chains management
- Business competition or mismanagement leading to sub par operational results
- Missed opportunity due to lack of financial, resources and capabilities planning
- Salient intelligence on Sales productivity, Geographic coverage, Operational efficiency, Products Costing & Operating Margin per lines are not well captured
LACK OF CORPORATE FINANCE & STRATEGIC MANAGEMENT CAPABILITIES
- Lack of corporate finance & funding capabilities; in spite of Operational and Business Development capabilities.
- Lack of insights in cash cycle management, value chains effect, business and costs drivers, investment threshold including optimum capital structure for industry.
THE NEED OF A CFO
- A full time CFO might or might not be the solution
- Recruitment is competitive; the candidate might not deliver
- A junior potential CFO might not serve the purpose (internal)
HOW IS FIDELITAS’ CFO DIFFERENT?
Our CFO can visualize Financial Intelligence, Operational Intelligence, Sales and Business Intelligence in a dashboard (or even to create one)
- Real and deep understanding of revenue and expenses sources
- Savvy on hard numbers on financial reports, format and frequencies
- Understand Cost drivers and Business drivers that shape the foundation of a relevant business and financial reporting
- Understand how the business model works and generates money
- Understand the critical value chain components in business process for improvement
- Knows how to identify & utilize the Resources and Capabilities
- Knowledge on companies’ core value drivers
- IT driven to extract key business & operations intelligence
- Understand contingent liabilities – part of the risk management
- Understand required return for investment and know how to work out the cost of capital for shareholders’ best interest
- Know how to discern quality numbers from those that are not
- Adept in handling M&A, Joint Venture transactions (if necessary)
- Creative in financing methods to reduce interest costs
- Know when to use capital market mechanism for growth
- Thoughtful insight on different market factors, such as supply & demand, stock markets or investor’s perspective
- Healthy communications with Board of Directors, investors and shareholders
- Have access to the best CFOs talent pool for insights and ideas
CEO & CFO SYNERGIES
- CEO BUILDS BUSINESS MODEL INNOVATION
CEO builds on business model innovation, CFO leads innovation through insight
- CEO STRENGTHENS COLLABORATION
CEO empowers collaboration to innovate while CFO destroys innovation obstacles
- CEO LEADS THE INNOVATION PROCESS
CEO lead the innovation process while CFO establish such conductive environment
- CFO LEADS INNOVATION THROUGH BUSINESS’ INSIGHT
Sees through the depths of different types of transactions not just by the sheer number of money involved.
- CFO DESTROYS OBSTACLES IN THE PROCESS
Bridges the business process and innovation via financial engineering improvements; which will enhance the existing business model.
- CFO CREATES THE RIGHT ENVIRONMENT
Enforce innovative cultures without sacrificing growth progress. Be creative to get out of the ‘business as usual’ pattern
Our Services include:
PERFORMANCE IMPROVEMENT WITH OUR CFO SERVICES
Handholding process in setting up key drivers, business & financial roadmap, ERP setup (if necessary), dashboard, investment disciplines, financing, and equity placement.
Financial, operational, sales and business intelligence identification & process improvement strategies (i.e lean management or Just-in-time)
Periodical guidance and advisory
COMPANY KEY REPRESENTATION
for Equity Investor, Creditor or Shareholder.
CFO HIRING OR TRAININGS
for internal candidates.