From an IT Auditor to a tech driven CFO: How CA M P Vijay Kumar played a key role in the transformation of Sify Technologies
- Meet M P Vijay Kumar (MPV), a Chartered Accountant, Cost Accountant and Company Secretary. Since 2007 MPV is the CFO of Sify Technologies - one of India's largest Information & Communications Technology (ICT) companies.
- His career path started as an Investment Banker, later as a Practising Chartered Accountant and for more than a decade now, as the CFO of Sify Technologies.
- MPV is also an Author of over 10 popular titles on Financial reporting, Advanced Accounting, AS, Ind AS, ICDS and Audit Standards. He is an exception that while in the industry, manages to be active as a Council Member of the second largest accounting body The Institute of Chartered Accountants of India (ICAI) and is also the Chairman of the Accounting Standards Board of ICAI, is a member of IFRS Advisory Council, and advisory body of IFRS Foundation and IASB and is member of IFRS SMEIG.
- As part of the Digital Transformation series powered by Dell Technologies, we spoke to MPV to understand his perspective on digital transformation and how he has used technology and transformed the business model from B2C to B2B.
Can you tell us a little about yourself?
I started my career in Investment Banking at Sundaram Finance Services, one of the largest and most respected financial services companies in the country. I eventually was entrusted with the responsibility of heading the team.
However, I always intended to be an entrepreneur as I wanted to build something where I could leave an indelible mark. So, I quit the job I was so comfortable with and joined a CA Firm, Yoganandh & Ram. This was in mid-1999.
Here I focused on audits, specifically, IT Audits and over the years we built a name for ourselves. In fact, we were one of those very few Indian firms registered with Public Companies Accounting Oversight Board US.
Fast forward to 2007, I was an Internal Auditor at Sify Technologies, which was then taken over by a US-based entrepreneur Mr. Raju Vegesna. He was keen to transform the company from a B2C to a B2B Enterprise.
Mr. Vegesna, spent an hour with me explaining his vision for the company and why he wanted me to be on board, with the assurance that I could work as an entrepreneur.
It was a hard call as I had to give up the CA practice which was growing well. But this was a rare opportunity to be part of a strong brand listed in the US, exposure to US GAAP, SOX, etc. Importantly it was my chance to explore the technology space and expand my knowledge.
For a professional at the age of 37, it was a rewarding opportunity and I took up the role of a CFO at Sify Technologies.
Together we transformed a consumer-driven business entity into an enterprise business and it has been an enriching journey of more than 13 years.
Can you share in few words what does Sify Technologies do?
Sify Technologies is perhaps India’s only comprehensive ICT Solutions and Services provider.
We were born as India’s first Internet Service Provider but quickly built our niche into Data Centers and Cloud & Managed Services.
Today, we offer services like pan-India Network connectivity, Datacenter colocation services, and a host of IT integration services including cloud-related services.
We have taken a step further and disrupted the traditional methodology of buying IT services by opting for an outcome-based solution. The client and Sify agree upon a satisfactory outcome to the service end result and arrive at the pricing, whereby the IT cost becomes a variable cost to the customer for the outcome they experience.
We have always been recognised as disruptors in the ICT realm. We just extended that to a 360-degree perspective.
Does Digitalization and Digital Transformation mean the same to you?
Digitalization is a subset of Digital Transformation.
Digitalization refers to enabling or improving processes by leveraging digital technologies and digitized data. Therefore, digitalization presumes digitization. Examples of this could be as simple as PLC logic, Big Data analytics, sequenced logic for a batch process, automated shutdown logic, etc.
Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers. It's also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure.
Over the last 13 years, how has your role as a CFO evolve? Did technology play a key role in the evolution of your role?
There is definitely a change in my profile as a CFO.
Since we are in the business of enabling the Digital Transformation of enterprises, I have access to the best of IT infrastructure and people within Sify for both delivery of good customer experience and for internal efficiency and effectiveness. This has played a key role in experiencing how technology can be a great business enabler both internally and externally.
To help you understand how my role as a CFO has evolved over time, let me give you a little historical reference.
Earlier Sify was a retail business. Even though it was a market leader, we gave it up, as the new shareholder and management had a different strategy to build a long-term sustainable annuity business.
The 2008 GFC denied us the opportunity to get a buyer for the retail business.
Amid this global meltdown, we took the hard decision of winding down the retail enterprise and taking that infrastructure and repositioning it for the Enterprise business.
The first five years (2007-2011) focus was directed towards aligning the finance functions:
- Change of business model
- Building teams relevant for the new strategy
- Managing cost
- Building good risk management and internal control systems.
The next 5 years (2012-16) focused on raising resources to fund capital growth since networking and data centers are capital-intensive.
Today as a CFO my role involves enabling Digital Transformation across the organization to meet reporting/ compliance requirements, particularly GRC, in house internal audit for IFC certification, Legal/contract workflow, employee engagement including HRMS, customer and vendor interaction through a digital platform, consolidation of group reporting without the use of spreadsheets, etc.
So now the focus is on ensuring discipline across the organization, effective use of assets for sustained growth, and providing consistent value to customers, and most of this is achieved by optimum use of technology.
However, contrary to what I read often, even today my key responsibility as a CFO is the custodian of the stakeholder value and my responsibility here is increasing.
The financial reporting requirements, the need of establishing stringent control have also increased multifold over a period of time.
Do you have a role to play in technology-driven decisions at Sify?
Technology comes at a cost and an investment is attributed to every decision.
For instance, there are home-grown technologies and third-party technologies. Both require an understanding of what the technology is, its monetization plan, investments, and the pricing to the end customer. Ultimately the finance element must be taken into consideration for it to be economically rewarding for the customer and profitable to the company.
Before we decide on embracing technology, we go through an elaborate evaluation process of understanding the technology.
As a CFO my role in this process is guiding the buying and implementation cost and the RoI attached to the projects as a whole. So, as an attached measure, yes I do have a role.
Coming from a finance background, how do you understand all the technology terms? Was it challenging initially?
We are largely an IT infrastructure services provider offering networks, data centers and Cloud and I am very much involved in this process. So, I gain insight through a reasonable number of materials, be it reading, attending events, asking questions, or watching videos.
As a CFO I dwell deeper into understanding the functional impact, the learning curve, and the net outcome of adopting the service.
I ensure I do not fall short in terms of grasping the propositions of my members. If there is a gap, it would be detrimental to the organization’s growth.
What also helps is that Sify has a very unique DNA where people are allowed to explore new technologies, deliver new solutions to customers, allowed to learn by making mistakes and the guys are extremely loyal to the company
I have to mention that when I joined Sify in 2007 my colleagues were quite generous in their patience and ensured that I understood the terms and their ramifications as what weighed on their minds was the overall interest of the organization.
As a CFO how was the entire transition to WFH, managing clients’ expectations? How has this lockdown stretched the way technology was adopted?
One should never let a serious crisis go to waste. It is an opportunity to do things one could never do before.
For instance, the experience of GFC 2008 has helped build Sify over time to stay relevant in the VUCA world and this resilience is what has helped us to navigate the current pandemic with minimum disruption.
This pandemic, almost all enterprises, have ensured that they unearth the tangential benefits of IT.
For us at Sify Technologies Deliverables and operations remained exactly as they were when operating from the office.
Lockdown and WFH situation have re-established that Technology adoption is the key, and the associates of Sify have adjusted to the new normal of WFH seamlessly.
The few challenges we have seen are effective induction of new joinees and passing on the DNA of the company to them; the first impression matters. We are solving this also digitally, but I would prefer a bit of physical interaction here. There is a lot of energy we transfer to each other when we are at a place. It will take some time for the digital version to be equivalent to the physical interaction.
In the light of the evolving expectation from finance professionals, when hiring for your team what do you look for? Has the job description changed?
I look for people who have the ability to understand business and are good at communication. Today most professionals come with both interest in and understanding of technology.
I view every hire as a chance to have an incremental increase in domain knowledge in the operational areas.
Lastly, according to you what will tomorrow's CFO look like?
Tomorrow CFOs will be those who will additionally have stronger capabilities of understanding client businesses where their businesses are undertaking digital transformation and build the company finance function, risk management function, cost and pricing models to meet client business needs.
Additionally, in a digitalized finance function, the CFO of tomorrow will be a data architect. They are the repository of the company’s financial data and must be able to transpose the company’s business models into a digital universe. They will also be a performance partner, driving and challenging the performance of the company, the implementation of adapted digital tools, enabling real-time analysis of trade-offs.
The CFO Organization of tomorrow must enable total openness and collaboration within the company, through integrated workflows and access to external information databases in Open Data.
Tomorrow’s CFO will be a leader with a digital vision and skills to manage digital tools.
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