Mo Ramzan, CFO of procurement specialist Inprova, gives his views on the year ahead
What have been the biggest challenges for your business over the past year, and what role did finance play in addressing them?
We are a procurement business operating in the UK and the US and in the last twelve months we’ve grown from 60 heads to over 200. Finance has played a pivotal role in providing information to help our leaders identify key growth drivers and decide which levers to pull as market conditions change.
The role of finance is to articulate how the business derives economic benefit. Although this is a simple statement, often the drivers for success aren’t universally shared and finance must spell out what the business needs to keep doing or to stop.
What are the key political and economic risks/opportunities you face in the year ahead?
Inprova Group operates in both the public and private sector and both markets are showing similar characteristics. Economic and political uncertainly is making customers more cautious about committing to projects, whilst they try to understand the impact that factors such as Brexit will have on their organisations.
So, timing is a real challenge for us as often our customers are unsure themselves on their business plans. We try to mitigate this by being flexible and responsive as our customers’ needs change.
What business-friendly policies do we want the next government to undertake to improve the environment for UK corporates?
Often the government focuses on the headline rate of corporation tax. Inprova Group is a service business; three quarter of our overheads are payroll costs and having more advanced tax relief on training and development costs (similar to those for R&D tax credits) would allow for greater investment in human capital and thus drive growth.
Which capex projects will you be focusing on in 2017, and how will these be financed?
Technology will be a major area of investment, in particular systems that understand buying patterns and predictive analytics, so we can provide customers with insight into their organisations’ spend patterns.
We’ll be financing tech projects with our own cash reserves. Where you are doing things that are really new, such as prediction analytics, it’s often difficult to get loans so we took the decision to finance this ourselves.
How do you expect the balance of your role to change in the coming year; between compliance and forward-looking/strategic? And why?
The balance of an FD’s role should be 80% looking forward and 20% compliance. Increasingly, software systems are delivering compliance so human intervention isn’t needed so much. If the transactional side of things is all an FD does then he or she will be out of a job quickly.
In the past finance directors have told a business what their historical results were. But telling business leaders what’s going to happen in the future is now much more important. People will pay a massive premium to find out what’s happening tomorrow.
Advice for other FDs for the coming year?
Historically, finance has been viewed as a compliance and control function and if that is all it delivers, then it will become obsolete. Moving forward, finance must enhance strategic decision making by using the unique vantage point and data it holds. Having an opinion is also important. Not everybody will like your opinion, but the FD needs to be heard and that’s about speaking a language that will grab people’s attention.