How Divya Kumar, Digital CFO at IKEA Retail drives the adoption and effective implementation of digital transformation
- Meet Divya Kumar, a cost and management accountant, Master of Business Administration (MBA) and Group Digital CFO at IKEA Retail.
- Founded in 1943, IKEA has grown to be a household brand and the furniture retailer of choice with 462 stores in several countries across the globe.
- With the growing demand for digital transformation, IKEA decided to transform digital about three years ago and Divya has played a vital role in combining finance, strategy as well as analytics to achieve IKEA’s goals.
- As part of the Digital Transformation Series, powered by Dell Technologies we spoke to Divya to understand her role in the adoption and effective implementation of digital transformation at IKEA.
Please tell us a little about yourself.
I grew up initially in Delhi and completed my high school as well as college where I live now, in Bangalore.
While completing a Bachelor of Commerce at St. Joseph’s College of Commerce, I did Cost and Management Accounting simultaneously and then did a Postgraduate Diploma in Financial Management.
I kick-started my career in an India-based accounting and audit firm and later went to the United States to complete an MBA in Economics and Finance. During this time, I worked at Merrill Lynch.
About twenty-one years ago, I found my calling when I joined Ryder, one of the biggest logistics and transportation companies in the US. This changed my life because I started in Strategy, which I loved so much, and later moved to Corporate Planning.
Thereafter, I moved across Strategy, Finance and Analytics… I enjoyed these roles and they laid a solid foundation to the professional I am today.
At IKEA, I am back to my core Finance role along with a lot more. This has been a fantastic journey as I had so much fun doing all the things that excite me the most.
Can you tell us about your role as a Digital CFO?
About three years back, IKEA Retail decided that they wanted to transform digital.
We formed a team called Group Digital and combined different parts of the organisation, which meant that we started housing the world’s technological development under one roof.
These developments include all the digital channels such as e-commerce, app development and enablement, as well as all the dataflow architecture, analytics and AI.
I serve as Group Digital CFO to achieve IKEA’s digital goals
As Group Digital CFO, apart from the typical finance and acquisition roles of a CFO, I am also in charge of strategic partnerships with start-ups, big firms and anything in between.
I also lead Decision Intelligence, which powers decision-making with analytics.
Digital transformation needs mitigation of a variety of risks. I am also responsible for our security and data privacy across the globe. The role is exciting because it provides an end-to-end perspective.
With data security, data privacy, digital development, and everything under one roof, I am the CFO of the group which creates all this.
In light of your personal growth and role changes during the last five years, how has the CFO role evolved?
Honestly, my role has changed a lot. The first thing is that the mandate of the CFO has become blurred.
Previously, we used to know exactly what we were doing, whether it was about finance, audit, or anything else. Yes, business used to be at the heart of it, but the business did not need the CFO driving epic movements.
Now, the strategic partnerships between CEO, COO, CDO, CTO and CFO are what drive the company towards its goals. Although business is at the heart of what we do, we need to take our individual hats off and embrace diversity to take decisions that favour the company’s objectives.
The second thing that has changed is the need for data analytics because of the ever-changing nature of technology and digital transformation, and the data explosion. Analytics are important because if we cannot analyse the data we generate, we cannot make the right decisions.
This involves the understanding of data risks because the more we rely on data, the riskier it becomes. So, we need to understand how the data flows, what impact it has, as well as how to mitigate identified risks. Through analytics, we should know when and how to use data
The third thing that has changed is how to do Finance, including theory and practice.
Business school trained us on how to use financial models, but many of those do not fit perfectly into today’s world.
Finance professionals need to innovate, think outside the box and always be practical.
To collaborate effectively with the CDO, CTO and CIO, did you need to take courses or do you have background knowledge in technology?
I think I have been lucky in many ways.
The first thing is that I learned programming for years alongside college as a hobby, which is the best thing that I have done in my life, as it has helped me immensely.
I did not stop here but continued to learn more after this.
The second thing that helped me was to associate with tech-driven companies. This has forced me to learn how to keep up-to-date with technology and the changes that constantly arise.
Fifteen years ago, I took a conscious call to be more technology- and analytics-savvy because I knew that without these two, I was going to fail as a CFO in my life. Therefore, I do a lot of reading about these topics.
I have also done courses on specific technology e.g. artificial intelligence. Now, these are easy to learn with Coursera as content is no longer exclusive.
As of today, I am learning blockchain. Unfortunately, we do not have a choice but to learn about technology. If you enjoy as you learn, technology will be your game changer.
As a furniture retailer, convenient shopping might mean customers need to walk into the store. With the pandemic and resulting lockdown, how have your operations been affected at IKEA?
True, the heart of IKEA is its store. If the store is closed, our heartbreaks and the last two years have been tough.
The positive side of the tough times we faced is that they accelerated our penetration into the digital market as well as a change in the customer perspective when it comes to online shopping and many, including young people, have newly discovered our stores via channels such as Google.
We shifted our focus to how we can provide the magic of our store to the customers via our online platforms, so they can shop in the comfort of their homes.
There is also a change in the customer perspective as many started shopping online a lot. This has changed a few things for us.
Our effective use of analytics helps us improve our online offering because we believe things will never go back to pre-pandemic conditions.
In these unprecedented times, we are constantly searching for ways to use technology to scale and the last 15-17 months have been a sharp learning curve for us and our customers. Unlike before, our turnaround time is faster.
With e-commerce and so many start-ups booming in India, how do you deal with the increased competition?
Home has become so important to people that the market has expanded because what people want has expanded.
It is good to have competition because it keeps us on our toes as it makes us wonder how we can disrupt ourselves repetitively, to ensure the best customer service.
Competition is also an opportunity for collaboration. I lead an acquisition team and we also partner with/invest in start-ups to solve certain problems that exist in the market.
Over the last two years, we consciously took the decision to collaborate with promising companies that can solve our problems, instead of trying to compete with them, thereby creating a win-win ecosystem.
Last year, I led the acquisition of a visual AI company and this allows customers to go to IKEA and plan by taking a photo of their homes on a regular smartphone. Their images get converted into 3D and they can remove existing items and insert IKEA’s own using the app.
This way, customers can see how a piece of furniture looks in their home before they buy it, without visiting the store. We have many more plans for this in the future creating a win also for the visual AI company.
Lastly, as Group Digital CFO, how do you keep up-to-date with the latest knowledge about technological advancements?
Technology is business.
Any industry you go into, you cannot move left or right without technology. Therefore, I need to understand whatever technology-related decisions the CDO or CTO takes.
For example, if the company is developing a new solution, I need to understand what it means for the organization, what benefits it brings, how they are developing it, the development cycle, the timeframes as well as the training involved, so I can determine the suitable financial investment, and exercise the right due diligence.
To stay up-to-date with the latest technological advancements, I constantly need to collaborate with the relevant stakeholders such as CDO, CTO and CIO. This enables us to achieve our objectives together.
The Finance Story is now on Telegram. Click here to join our channel and get updates with latest stories of finance professionals.