How Saurabh Gupta, the CFO of Dixon Technologies embraces digital transformation to grow the 28-year-old company
- Meet Saurabh Gupta, a chartered accountant (CA), Company Secretary, MBA, and CFO at Dixon Technologies India Limited.
- Founded in 1993, Dixon is the largest provider of electronic manufacturing services (EMS) and it is no doubt that technology has played a major role in Dixon’s success.
- As part of the Digital Transformation Series powered by DELL Technologies, we spoke to Saurabh to understand his role as CFO, what are the technologies adopted by the organization over the last few years, and how as a CFO he drives Dixon towards technological advancement.
As CFO of a manufacturing company, what does digital transformation mean to you?
Digital technologies present finance leaders with a powerful opportunity to offer more insights, improve and accelerate decision-making through accuracy, availability, and consistency of data.
Digital transformation for me is rethinking how a manufacturing company uses technology, people, and processes in pursuit of new business models and new revenue streams.
This is a result of changes in customer expectations around products and services with aligning the transformation objectives with business goals.
How have you and the company evolved and adapted to the digital wave in the last few years?
The CFO’s role and responsibility have shifted significantly in the last few years.
Apart from the finance function, I need to work closely with all parts of the business and ensure no surprises are waiting around the corner.
The finance function and I are at the forefront of digitization in the form of automation, analytics, robotic processes, and data visualization.
Together with the CIO, I consider operational and financial issues and weigh the potential risks when the business needs to implement new technology solutions.
Over the last 3-4 years, we have taken strides towards digital transformation, thereby simplifying decision-making processes by providing dynamic reports and real-time data to eliminate number crunching and simplify decision-making.
We have successfully implemented the following systems:
SAP helps in consolidating financial data quickly and accurately. It reduced the turnaround time of financial reporting to management, stakeholders, and regulatory authorities. This leads to efficient working capital management by monitoring real-time inventory as well as debtors and vendor aging.
The dashboard helps to generate real-time reporting for management due to reduced breakdowns because of proper preventive machine maintenance plans.
Overall, it improved the reporting process and efficiency and increases data security and authentication.
2. Manufacturing Execution Systems (MES)
All our factories will be implementing MES. This streamlines order flow and production execution tracks the transformation of products from raw materials to finished goods and evaluates and analyses yield, quantity, and plant resource utilization.
Furthermore, MES improves operational efficiencies by reducing production costs and losses with visibility into manufacturing execution.
Digital manufacturing execution reduces production costs as well as scrap and rework by increasing throughput, and providing higher quality products.
In 2020, Dixon automated its HR system by freeing employees from tedious manual tasks and allowing them to focus on complex tasks like decision-making and strategizing, thereby allowing access to real-time data and implementation of online modules to ensure remote reach of employees virtually.
By automating standard and repetitive HR activities, the organization reduced the costs and time to focus on other key activities.
What has been the impact of adopting technology at Dixon and how has the finance team contributed to this?
Through digital transformation, we have achieved:
- Improved overall organization level supply chain, operations as well as efficient processes.
- Improved back-end operations and automation of business processes, which were manual before, thereby reducing costs and time, leading to minimal errors.
- Better controls over the processes.
- Real-time availability of data to improve decision-making.
The finance team adds value by capturing key performance indicators on a regular basis. This is through efficient working capital management, providing real-time data, asset monitoring and evaluations, cash flow monitoring and controlling, credit management in real-time, leading to efficient reporting processes.
Since digital transformation requires cultural change, how do you implement this in the company?
It is never easy to implement new technologies in a company as it brings challenges and learning for all the company’s employees.
For example, we implemented SAP three years back, but it took almost a year to streamline the process.
The major challenge is resistance to change or getting employees out of their comfort zone for transformation.
This is because the up-gradation of tools and techniques will not assure implementation success until employees accept it.
There is a learning curve as employees get used to new tools.
At Dixon, we have created a learning and development process by training employees on new technologies. Dixon plans transformation with extreme care and diligence to bring the best results.
Considering the adoption of technological developments, has there been a major shift in your decision-making as CFO?
Yes, there is a major shift from earlier scenarios as the decision-making process is more data-driven and data analysis requires automated finance processes, financial management, and sophisticated datasets.
Who is responsible for Dixon’s adoption of digital transformation? Furthermore, how do you interact with IT considering that it is not normally a core competence for finance professionals?
Nowadays, CFOs have a clear stake in enterprise IT strategy and in shaping how the organization may best realize its cost benefits.
The finance function oversees capital and operating expenditure (Capex and Opex) budgets, and IT reports directly to the CFO.
Since I am also heading the IT team, the implementation of digital technologies is also my responsibility and I have always focused on the outcomes as well as how technologies will support us to achieve management objectives.
In short, I am trying to figure out how technologies make life easier for end-users.
Moreover, I advise my IT team to understand what exactly management and business heads are looking for and how we support them.
With so many technological advancements, how do you decide on which tech to skip or adopt? Do you consult anyone should you face a dilemma?
Over the last few years, we have built a strong IT team and we also work with various consultants like 'Itelligence' and 'EY' as our strategic partners for digital growth when looking for technology partners.
We consider multiple factors such as product/service costs, technical capabilities, transport working processes, the provider’s experience in our industry, and the provider’s after-support services.
People are saying a lot about cloud support. What does this mean for Dixon and the finance team?
The cloud offers an affordable alternative for ERP and that lowers both Opex and Capex because it eliminates the need to purchase software and hardware or hire additional IT staff.
Cloud allows us to have an integrated storage facility, which the company can access at any time from any location.
It allows all demand availability of storage and computing power and therefore makes it easier to scale up as per requirements.
With cybercrime being a major issue of late, have you experienced any major hacks/cybercrime incidents?
Cybercrime is a major risk indeed, but we took all the possible steps to protect our data and reduce financial loss from cyber-attacks. As a result, we have not faced any kind of cybercrime yet.
We have formulated adequate budgets and allocated proper resources to protect our company and client data from cyber risks.
Financial assets are at risk of getting targeted by hackers. For this reason, we educated our employees about the company cyber-security policy.
We also created a dedicated IT team with specific KRA and the team makes sure that we protect all systems with firewalls and antivirus.
In addition, the company has taken requisite cyber security insurance policies for any financial loss.
As the CFO, how do you keep yourself updated, considering that you also head IT?
The CFO has become a central player in this digital shift.
To cope with the pace of digital transformation as well as to grow and thrive under the transformations, I gain insight through a reasonable number of materials, be it reading, attending events, asking questions, or watching videos & researching and spending time understanding possibilities without looking at immediate business returns but its impact on the long run.
In addition, I ensure the following things as a CFO:
- Having complete & thorough knowledge of data & reports which will be processed under the digital system
- Ensuring protection of data from a security point of view as with higher digitalization comes a new variety of risks to the organization
- Creating a forward-looking approach amongst the team about the technology to be deployed in the system
- Ensure cross-functional coordination and collaboration among different business processes and blending multiple skills for solving a business problem
Lastly, what is your advice to the CFOs of today and tomorrow?
My advice to the fraternity would be that the CFO function now faces changing requirements and expectations from external and internal stakeholders created by digitalization: there are new opportunities, different ways of working, and unique business challenges.
Today’s CFO function must be able to drive digital transformation and actively contribute to the change of an organization.
Digital readiness helps companies ensure business continuity in challenging business and market situations.
CFO of tomorrow must enable total openness and collaboration within the company, through integrated workflows with a digital vision and skills to manage digital tools.
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