Starting a Business vs Going into Finance

Starting a business appears to be the next cool thing to say, as a counterpoint to folks looking to get into finance. But when you ask, am not sure if you have fully thought thru the question yourself, instead if simply asking as a throwaway line.

It's definitely easier to talk about going into business than actually doing so, and most people that actually talk about it never take the first step towards it. First of all, its a huge financial risk. Most people who talk about going into business think of restaurant or retail shop ie stuff they are familiar with. That's the worst kind of business - super competitive and very high capital requirements of $200k to 500k, which you can lose in less than 6 months if the business fails. I've seen a few friends fail and lose 20 years of savings in 6 months and take 10 years to recover. Either that it you lose money from trusted family and friends.

Either that or you can choose a low capital business such as trading or real estate , but earnings are super volatile and most will struggle along for years potentially never getting rich.

Of course, I have a friend who went into his fathers business, is now CEO and has a collection of sports cars now. I also know of a few business men from the older generation that got rich of government concessions in Indonesia, but money is almost never clean.

So the notion of starting a business is romantic, buffeted by examples we all have of less educated friends who have made it very big in business, after starting from scratch. But if you turn a critical and objective eye to it, I have to concede that its not all roses. most (but obviously not all) successful business men either have a head start either via a family business, family money, family contacts or by being very agile in a fast changing market by doing stuff that's not clearly legal (Indonesia example above or new money from China or Russia).

Striving to get into finance is not easy, but its a risk free way of potentially becoming rich (albeit on a much smaller scale than a successful business man). No one ever said that getting rich is easy anyways ...

APEA 2011

Published June 28, 2011

Evolution of leadership qualities Having a good grasp of people, functional management skills and market knowledge will go a long way in tackling cross-border challenges for entrepreneurs, says NA BOON CHONG THE profile of a successful entrepreneur is one who sees and acts on opportunities, is oriented towards achievement, has concern for a high quality of work, is committed to work contract and is self confident, according to an early study by David McClelland. Armed with such a drive, it is natural that entrepreneurs seek out opportunities in new frontiers to expand their businesses once they have achieved success in their home markets. While the initial overseas foray is propelled by entrepreneurship, leadership competence needs to evolve in the life cycle of the overseas business. We would define leadership competence as comprising three major skill sets: people management, functional management and market knowledge. We take, as an example, a client whose HR practices and business expansion we have helped support for a number of years. People management We saw its products and services migrate from serving a homogenous market to customisation and then mass customisation for greater efficiency. Its value chain activities moved from being highly concentrated in its home country to a networked and distributed model. As a result, the requirement on leadership changed progressively in the following manner. Level 1 Works effectively with people from cultures other than his/her own Builds effective relationships with people from other cultures Willing to travel on work assignments Level 2 Seeks to understand cultural differences and the impact on work processes Recognises the impact of his/her own cultural attributes on others Builds effective relationships across diverse cultures and work groups Performs effectively in cultures other than one's own in work groups where there is multi-cultural membership in face-to-face or virtual environment Level 3 Leads and works effectively in groups where there is multi-cultural membership in face-to-face or virtual environment. Respects and is sensitive to others' cultural values in leading Addresses impact of own cultural values on others Looks for best practices outside of own area Recognises the local business implications of regional and global trends and events Level 4 Plans for portability of processes and products Customise solutions based on cultural norms Keeps current on the global, economic, political and legal events occurring in the region and the world, and the impact on the company's business Supports collaboration across borders and regions to improve customer satisfaction Creates development opportunities for culturally diverse members of the organisation Level 5 Builds a vision for the company's long-term success as a regional and global player Balances geography goals with corporate goals Understands the business impact for the company's long-term position in various markets Promotes respect throughout the company for value-added by way of culturally diverse elements of the workforce The above became the basis to develop management styles in an increasingly complex regional business as well as to assess a leaders' ability to perform. Functional management As the company grows its regional footprint, the following key functional skills need to be developed internally or 'bought' from the outside. Financial: Characterised by advanced financial management skills that bring together cross-border accounting, risk management, international capital markets knowledge, ability to manage across exchange rates and related risks, and international financial structures. It also includes trade and export related skills. Business development: Ranges from relationship building with international policy bodies, governments and corporate players to cross-border business planning, multiple alliance management, mergers and acquisitions and go-to-market strategies for international companies. Product development: Ability to understand and analyse international customer behaviour and preferences, international trend-spotting, intellectual property rights and related skills. Also includes fundamental skills such as product customisation, research & development and product design. Marketing: Integrates the elements of marketing management across borders with the ability to set up and manage complex distribution channels for cross-border operations; ranges from international branding and brand management, sales force effectiveness, customer relationship management, advertising and promotion (international messaging) and distribution management. Human resource: Reflects the challenges of managing across multiple cultures, legal environments and labour economies; includes international rewards, international careers and staffing, international organisation design and structures and international talent and leadership development. Manufacturing or supply chain: Brings together the complexities of managing and integrating multiple manufacturing operations across multiple countries with the added complexity of multiple supplier relationships; includes also international vendor and supplier network management, manufacturing management for international operations, supply chain planning and management and labour relations. Market knowledge Last but not least, with the rapid development of many emerging markets, what is known about a particular market becomes obsolete very quickly. Take China as an example. The early stage of economic development was around the eastern coastal cities, such as Shanghai. But as development moved inland to cities such as Chengdu, the market characteristics and challenges became different - and quite quickly. Aon Hewitt's People Risk Index global study found differences in the risk profiles of these types of Chinese cities. (Refer to table: the higher the number, the riskier). Chengdu's highest risk categories are employment practices and talent development, whereas demographics are the least of its worries. The Chengdu market has seen difficulties in attracting and retaining talent, and has pushed up the salary costs for certain industries. However, Shanghai displays a different sort of profile. Putting them all together An entrepreneur that keeps up to date with the market, applies the appropriate degree of functional oversight, and underpins all that with the right people management skills, will go a long way in growing his or her overseas business. The writer is managing director, executive compensation and performance, South-east Asia, Aon Hewitt

Don't Chase Money

I wouldn't want to be rich.
I just want to be successful.

Many people embark on the wrong journey of working for money.
And working for all the wrong and senseless goals.

I can be successful, but poor at the same time.
Money comes and go, but not ideas and spirit.

Work on what you like to do. And excel in it.
Only then will success, wealth and happiness come your way.

An American investment banker and the Mexican

An American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellow fin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.

The Mexican replied, "only a little while."

The American then asked why didn't he stay out longer and catch more fish?

The Mexican said he had enough to support his family's immediate needs.

The American then asked, "but what do you do with the rest of your time?"

The Mexican fisherman said, "I sleep late, fish a little, play with my children, take siesta with my wife, Maria, stroll into the village each evening where I sip wine and play guitar with my amigos, I have a full and busy life."

The American scoffed, "I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat with the proceeds from the bigger boat you could buy several boats, eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually NYC where you will run your expanding enterprise."

The Mexican fisherman asked, "But, how long will this all take?"

To which the American replied, "15-20 years."

"But what then?"

The American laughed and said that's the best part. "When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions."

"Millions.. Then what?"

The American said, "Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos."

Visual Basic (VB) write to text file

Dim FILE_NAME as String = "C:\my text file.txt"
Dim myText as String = "Hello World"

Dim fileWriter As New System.IO.StreamWriter(FILE_NAME)
fileWriter.WriteLine(myText)
objWriter.Close()

Visual Basic code: Enabling Select All function in TextBox

For VB developers:

If you're using System.Windows.Form.Text, you might notice that press Ctrl+A does not enable the select all function to select all text in the text box. This function needs to be coded:

Object, ByVal _
    e As System.Windows.Forms.KeyPressEventArgs) Handles _
    TextBox2.KeyPress
    If e.KeyChar = Convert.ToChar(1) Then
        DirectCast(sender, TextBox).SelectAll()
        e.Handled = True
    End If
End Sub

Qs: I am new to shares. What is this bollinger band... is it a software? Is what you've posted an indication to buy or sell?

Hi Sir,

just like you, i too am a newbie when it comes to stock trading. but i'm learning and doing my own analysis, sharing my results with everyone.

Basically what i did was some simple, typical technical analysis. There are many different technical analysis available, such as bollinger band, RSI, MACD, Simple Moving Average, Stochastics, etc etc.

The results i've posted are indeed buy/sell indicators, as studied from technical analysis of Bollinger Band and RSI combined. But pls note that all analysis are never 100% accurate because analysis is merely a study of past performance and should never be relied on.

The market is unpredictable.

Can you afford a car?

Once in a while, a forumer will appear with details about his salary and expenditure and seek the advice of fellow forumers about whether he can afford a car.

The answers will predictably fall into four categories. 

(1) "Wah, you earn so much, can afford any car you like" (for any salary above $2.5k)

This type of answer is usually posted by non-working forumers like students or those serving NS, who think that anything above $1k is a lot of money.

(2) "I like honda civic type r because chio. u shld buy"

This type of answer is useless for budgeting, but simply for +1 purposes. Again, this type of posting is usually by students or those serving NS.

(3) "I earn $5k/6k/7k per month but still take bus and eat rice + tau you"

This type of posting is usually by a forumer who earns a fair amount, but thinks he earns a lot and wants to show off how financially savvy he is.

(4) "Singapore cars so expensive if I go live in USA/Australia/Europe/Africa/North Pole the cars are so much cheaper, women more beautiful, jobs plentiful and food is tastier"

These are postings by 'politically aware' (i.e. PAP bashing) Singaporeans who seem to think that their job skills will allow them to migrate easily to other countries to work, when they don't realise that their skills can be done by a Chinese/Indian at twice the speed and half the price.

However, today, I will answer this question for you once and for all in 5 easy steps. 

Step 1 Take your average monthly salary over the last 6 months and minus your average monthly expenses over the last 6 months. 

Note: If you don't know how much you earned or saved over the last 6 months, car ownership is likely to leave you in financial ruin.

Step 2 Add car allowance (if any).

Step 3 Minus public transport costs.

Step 4 Do you have enough money left to maintain the car you are thinking of (car loan, insurance, road tax, petrol, parking, ERP, maintenance, upgrade budget)? 

Note: If you never owned a car before and you do your calculations and you think 'oh my god, this cannot be right as it is so expensive'. Congratulations, add 10% to your figure and you now have the cost of car ownership in Singapore. 

Step 5 

If YES, you can afford a car FOR THE TIME BEING (assuming you are happy to reduce your savings by the same amount). 

Note: If circumstances change (change job, lose job, lose car allowance, get married, got baby, loved one falls ill and needs medical expenses), then depending on whether you can sell the car without having to come out with money, you may be financially screwed.

If NO, you cannot afford a car. Sorry. Work harder or spend less, then maybe in the future can.

Extra Observations

1. For young people with less life experience, please note that owning a car and being able to afford a car are two different things. There are many people who cannot afford a car, but still own a car. 

Most of the confusion young people face is wondering why their colleague/friend who earns $1500 can afford a car - the answer is they cannot afford a car. Either they have background support from family, or they are financially bleeding to maintain the car. 

2. For guys who think that girls like guys with cars - you are unfortunately right. However, most girls do not know or care what sort of car it is, as long as it can get from point A to point B in relative comfort. If you are planning on buying a car for the main purpose of increasing your attractiveness to the opposite sex, a cheap and comfortable one will do - no need for a 'sports car' like a Civic Type R or STi. A guy who has an Altis or Sunny but can afford the occasional nice restaurant treat vs a guy with a STi but can only afford hawker centre or Mcdonalds - who do you think will be more successful in the game of love?

3. BONUS Observation Some people will read this posting and think that I am discouraging car ownership. I am not. I am trying to make sure that ideally, if you choose to own a car, you go in with your eyes open, and not get 'surprised' by your financial situation as time passes and reality sets in. MANY MANY Singaporeans (including car owners who post on this forum) do not 'pass' the test I have put in this posting, myself included when I first started work. Although I was making $5.5k when I bought my first car, due to poor financial discipline, I had almost nothing left every month. It is very unpleasant for a young person to realise that his financial situation is his own responsbility, but the earlier you realise this, the better it is for you. The stress you get from checking your rolled over credit card debt, overdraft and bills every month is even more unpleasant than trying to gain a basic understanding of personal finance. It is unfortunate that for most young men in Singapore, a personal finance lesson is paid for in the shape of a $60k depreciating lump of mental on wheels.

If you still decide to buy a car even though you can't afford it, all the best.

A Stimulus Package - how it works

It is a slow day in the small Saskatchewan town of Pumphandle and streets are deserted.

Times are tough, everybody is in debt, and everybody is living on credit

A tourist visiting the area drives through town, stops at the motel, and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs to pick one for the night.

As soon as he walks upstairs, the motel owner grabs the bill and runs next door to pay his debt to the butcher.

The butcher takes the $100 and runs down the street to retire his debt to the pig farmer. 

The pig farmer takes the $100 and heads off to pay his bill to his supplier, the Co-op.

The guy at the Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her "services" on credit.

The hooker rushes to the hotel and pays off her room bill with the hotel owner.

The hotel proprietor then places the $100 back on the counter so the traveler will not suspect anything.

At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, picks up the $100 bill and leaves..

No one produced anything. No one earned anything... 
However, the whole town is now out of debt and now looks to the future with a lot more optimism.

Changing role of the CFO

How has the role of the CFO (or equivalent senior financial professional) changed in your organisation/industry? From your perspective as a CEO, to what extent should CFOs be involved in strategic business planning and other business responsibilities?

Terry D O'Connor
CEO
Courts (S) Ltd

THIS question is debated from time to time in the business press and it always bemuses me as the CFO has the greatest vantage point in the organisation on the financial impact of both good and bad decisions ,in both the near and long term.

At Courts, our entire strategic planning process commences with insights and value analysis from our CFO and the inter-relationships between our prior years' strategic plans and financial outcomes. There would not be a single project of strategic importance to our business that she would not play an active role in from the outset and she is seen as an equal to any other senior executive in our organisation in the execution of strategy and second to none when it comes to strategy formulation.

Thankfully, in this era of insight-driven strategy and rightful governance focus the strategic role of the CFO is being increasingly recognised in forward looking enterprises.

Steve Watts
President
SAP Asia Pacific Japan

THE role of the CFO has changed considerably in recent years and the dynamic market environment has certainly brought to light the CFO's importance and prominence within the organisation.

CFOs today are moving beyond their traditional transactional management role towards a more strategic one that is focused on creating value and driving the growth and profitability of the business at the same time.

In a recent survey commissioned by SAP Asia-Pacific Japan, it was revealed that the top three challenges CFOs faced today are cost management, talent management and risk management. As CFOs continue to take on an increasingly strategic role within the organisation, technology becomes a key enabler to the delivery of a dynamic and robust financial system - with processes capable of withstanding change in business direction, without compromising regulatory compliance and control. Gaining genuine insight into business operations and processes enables CFOs to facilitate greater growth, by tapping into new markets to create new revenue streams.

Our CFO for SAP APJ, Colin Sampson, has taken it even further. In addition to his formal CFO role across APJ, Colin is also an external spokesman for our Shared Services facilities in Asia. He is also a vigorous and vocal champion of SAP's Executive Athlete programmes, which seek to ensure that all our employees live a healthy and balanced lifestyle.

Lim Tit Meng
Chief Executive
Science Centre Singapore

ON the first day that I took over as chief executive of the Science Centre, the director of finance was the first key appointment holder I discussed my planning strategy with. The second was the director of HR. I believe in using strategic budget allocation and talent management and development measures to shape a corporation and its culture.

A successful company has to maximise its financial and manpower assets, especially true for the Science Centre which is under certain constraints as a statutory board organisation accountable to tax payers, stakeholders and our parent ministry. A culture of discipline in financial management is what I requested my finance director to help instill in the company. I empowered her to come out with schemes to streamline workflow and hence eliminate unproductive processes, and to entrust heads of department with increased responsibility of managing the allocated budget.

We want our staff to develop an entrepreneurial spirit and not a civil servant mindset relying on government grants for operation.

While we are a non-profit organisation, we too can work towards total cost recovery or even a slight profit in order to grow, as long as profits are ploughed back to fulfilling the mission of the Science Centre.

Budget planning and allocation is now practised with clear objectives. Heads of departments work as if they each own a business unit and they have to ask themselves what strategic outcomes are expected for the projects they put up for budget request.

Stephen Harrison
Vice-President, APAC
Control Circle

ONCE a CFO was deemed a simple bean counter who produced reams of figures which only accountants could read and understand. CFOs have emerged as the go between on both sides of the corporate ladder, and a Bachelor of Business is at risk of coming in second to a CPA certificate as costs and financial models seem to be the flavour of the month in the aftermath of the great financial crisis.

Today the CFO has become the go-to person on every level and for every decision, with more CFOs being recognised as potential CEOs in a safe environment where stability and cost control are key factors. This can slow down a fast entrepreneurial business that requires first-to-market agility and a palate for risk, and where technology is a business differentiator.

In my experience as an entrepreneur, success and business longevity happen when the CEO, CTO and the CFO work towards a vision and use technology as an enabler of business differentiation and efficiency.

Dan McConaghy
President and Managing Director
FICO Asia-Pacific

I BELIEVE the biggest challenge for CFOs is figuring out how to marry their traditional financial understanding with their newfound strategic and operational skill set, so they can be leaders in encouraging innovation and smart risk. We have seen some CFOs embrace this over the past couple of years, working closely with not just the CEO, but the chief risk officer (CRO) as well.

With successful CFOs now working closely with CROs and the CEO, the alignment between the work of these three executives begets a new understanding: that risk is measurable and can be leveraged upon to grow profitably, if it is built into their fundamental business management. This differs from uncertainty, which is unmanageable.

CFOs need to take a step back and identify what the uncertainties are versus what the risks are.

While uncertainty is present at companies in every industry across the globe, the greater danger is ignoring this uncertainty which will often impede economic recovery and growth. What is needed to balance the global economic recovery and ensure continuity of the current growth in Asia-Pacific, is to reduce unmanageable uncertainty and turn it into manageable risk.

Every bit of uncertainty removed from the equation will see a substantial increase in the ability to make sound decisions.

Paul Endacott
Managing Director, Singapore
Ambition

SINCE Ambition was founded and listed in 1999, the influence of our finance leader has increased from accounting and public company compliance to a more significant business partner role as we have expanded globally. The position now exerts genuine influence around the boardroom table and the CFO provides a fresh and independent perspective, constructively challenging our business leaders over costs and productivity.

CFOs need be involved in strategic business planning, especially in listed organisations where any business decision must come back to earnings per share. Many organisations believe CFOs are capable enough to take on other areas such as IT or even HR in addition to the fiduciary responsibilities, making them far more a COO to the business. Furthermore, at Ambition we're seeing more evidence than ever before of commercially minded CFOs being considered for the top jobs and stepping up into CEO roles as boards of directors recognise the influence the CFO has played in the organisation's business strategy.

Pramod Ratwani
President & Executive Chairman
Consilium Software Inc

THE CFO's role in today's dynamic industry is not merely financial reporting or financial management as seen in the traditional business environment. Besides compliance and value creation, the CFO's involvement in formulating and implementing corporate strategies should be a high priority. The role is getting more complex as the bar continues to rise for the new-age CFO and hence there has to be a balance between the operating responsibilities and financial responsibilities.

The CFO is increasingly expected to be more knowledgeable about his industry, not only from the financial compliance perspective but also in terms of business development, competition and product strategies. This would help the CFO in handling strong cross-functional and cross-regional teams. The CFO's business acumen is now expected to be at par with that of the CEO.

Ravi Rajendran
Vice-President and General Manager Asean
Hitachi Data Systems

THE role of the CFO has changed drastically across all industries, especially since the financial crisis and more so in the IT industry itself because it is so dynamic and fast-changing.

The CFO is consistently under pressure to maintain and reduce overall capital expenditures (Capex) and operational expenses (Opex), and to do so, he must look beyond lowering acquisition costs and search for additional ongoing savings. The focus now is not just on lowered Capex spending, but more vitally, long-term Opex savings. IT organisations need to make business cases to gain management support for both strategic and tactical investments in their IT assets. Many IT engineers and architects limit their strategic planning to technology and operational perspectives, but by adding basic cash flow analysis and measuring return on investments (ROI), return on assets (ROA) and total cost of ownership (TCO), CFOs can help their management undertake initiatives based on more meaningful observations, thereby improving their overall strategy.

At Hitachi Data Systems, we have a methodology called 'Storage Economics' that helps our customers assess the true costs of their storage infrastructure. As new technologies become available, smart organisations will need to follow the principles of Storage Economics to evaluate them not just for their technical prowess but also for how well they can support business performance and particularly efforts to economise. Keeping in mind that we cannot improve what we cannot measure, CFOs and CEOs can take the first steps to define and measure costs through Storage Economics, which is the key to provide continuous improvement to that of their storage estate.

Teng Yeow Heng Michael
Managing Director
Corporate Turnaround Centre Pte Ltd

THE role of the CFO as the 'bean counter', 'financial analyst' or the 'policeman' of the company is passé. Today, many companies cannot afford to employ a CFO who is not actively participating in the business such as strategic business planning, investment analysis, identifying business opportunities for the company as well as helping the CEO in the transformation process and operations of the organisation. The CFO has access to financial numbers and other management information that are invaluable in aiding the CEO in making better decisions.

Also, a CFO will not be able to do a good job if he or she is not involved on the ground or get a good handle of the operations as well as the marketplace issues.

R Dhinakaran
Managing Director
Jay Gee Enterprises Pte Ltd

THE role and intent of a CFO in an organisation remains important over the years. Over the years we have come with many new ways of defining the role with more new terms being used.

Our expectation of the CFO as an important board or panel member has been to continue providing realistic directions by judiciously interpreting the past results, current contexts and then realistically projecting results for future options. The CFO often provides the much needed realism to collective optimism which may come about while discussing strategic matters at the highest level.

Strategic planning is not slave to any particular function whether it is marketing or finance. Strategic planning is the collective agreement by a company towards its long-term goal and every function has its imperatives embedded in this exercise for it to be equally involved.

By ignoring or sidelining any function in this key process of formulating strategies, the company risks its future far too much. The responsibility of providing balance of power to various complementing functions lies with the CEO.

A mature CEO will often overcome his emotional attachment to his own field of specialisation or specific members of top management and accord equal merit to all members of the top management.

The CEO must ensure that the strategic planning exercise takes on board all the functional heads including the CFO as well as other important functions like HR and marketing.

The CFO is undoubtedly beyond the role of an accountant, controller or finance manager and the company must encourage an active involvement from functional heads like the CFO in the collective determination of long term interests of the company.

Annie Yap
Managing Director
AYP Associates Pte Ltd

THE role of the CFO has evolved beyond conventional record-keeping and reporting of financial figures to the CEO to one who works hand in hand with the CEO to proactively facilitate strategic business planning and shoulder other pertinent business responsibilities such as business contingency planning. In my organisation, the CFO capitalises on his financial knowledge to derive financial forecasts that look beyond the short-term goals of increased sales revenue so as to ensure long-term profitability and sustainability of my business.

In addition, the CFO is able to leverage on his expertise to provide the CEO with prudent advice on how best to formulate business contingency plans, thereby playing an imperative role in ensuring that financial risks are kept to a minimum.

Having been in the HR industry for the last few decades, I have witnessed an evolution of expectations from my clients when it comes to filling a CFO position. Their prospect of a successful candidate will typically be one with qualities as mentioned above.

Karin Clarke
Regional Director - Singapore and Malaysia
Randstad Pte Ltd

THE role of the CFO has changed dramatically over the past few years - from a shared service function to one that helps navigate the new business world.

At Randstad, our CFO produces a comprehensive review of our quarterly business performance, which summarises our competitiveness, and then looks forward to say, 'Here are the growth industries in the next six months, here are the industries in decline.' Our finance model now also includes a dedicated financial advisory team that looks at how it can add value to our business - leaving the core finance function to shared services. Like the new CFO role in many organisations, this demonstrates the move from number crunching to contributing to a company's success through an effective strategic vision.

The downturn forced many CFOs to reinvent their role and restructure their finance teams - it was a time when people called for clear direction and stronger planning. This thinking has continued as companies look to grow. Together with the CEO, a CFO must interact directly with clients, senior leadership and frontline workers. They still need to produce accurate and timely figures, but it's what they do with them that really counts. With this, people on the frontline have the ammunition to make the best decisions and plans.

Lim Soon Hock
Managing Director
PLAN-B ICAG Pte Ltd

OVER the years, the role of the CFO has evolved from being perceived as a bean counter to being recognised as a key business partner in a management team. This is a positive development.

When I was in Compaq in the early 90s, I always subscribed to the philosophy that every member of my management team was first and foremost a business partner and subservient to that, a functional manager. 

The rationale is simple: if there is no business, none of us in our functional capacity will have much of a role to play. The CFO is one of two key functional heads with whom I work closely, to this day. The other is from human resources. While the CFO ensures that the company's financial lifeline is secure, the head of HR ensures that the right and congenial environment is created for all employees to give of their best.

In ensuring that the company's financial lifeline is secure, the CFO must participate in strategic business planning and the pursuit of major commercial undertakings as well as large business opportunities. Other than contributing his financial expertise, which should also include a large dose of risk management, the CFO should also give his views and opinions first and foremost, as a business manager.

Any CEO worth his salt will want to tap on the collective wisdom of his team, including the CFO, in today's fast changing and challenging times. While I do value the opinions and perspectives of other functions such as sales, marketing, engineering, legal, HR, etc, I also hold those of the CFO in high esteem.

CFOs are an important check and balance for companies, in their dual roles as a business manager and a financial professional. These roles are not mutually exclusive, and because it is so, in the absence of a head for corporate planning, I often deploy my CFOs to drive the strategic planning process and annual budgeting.

Andrea Ross
Managing Director (Singapore & Malaysia)
Robert Walters Singapore

THE role of a CFO has definitely changed globally over the past decade both internally at Robert Walters and within our extensive client network. Within senior financial roles that we have recruited for, we noticed a dramatic shift in the requirements of CFOs with increasing emphasis placed on support and value-adds that the candidate will be able to bring to the business. This includes qualities such as excellent communication and relationship building skills, as well as the ability to motivate staff and resolve issues.

With a growing importance placed on strategic relationships between businesses and their finance functions, the traditional role of a CFO becomes more complex. Finance professionals are now expected to be familiar with technological advances (as they now also need to work more closely with CIOs), commercial terms within the business and be able to give expert opinions on business-related issues. This means that traditional-type finance professionals could be in danger of being left behind, especially in larger MNCs which expect a great deal from their finance function.

Therefore, it is critical for finance professionals to constantly upskill themselves through training and networking as well as keeping abreast of market activities.

At Robert Walters we organise regular networking events including roundtables for CFOs within the financial services sector on transfer pricing, taxes and corporate governance. Such executive dialogue sessions are imperative to bringing people together and facilitating the sharing of industry trends, practices as well as ideas within a larger network.

Florence Ng
Managing Director
Straits Talent

OVER the last decade or so, the role of the CFO has evolved from one that is 'controlling and accounting' focused to one that is more business friendly and commercially focused. As the financial guardians of the business with a fiduciary duty of care to the shareholders, this is often a delicate balance. This is true across all industry segments, regardless of scale, size or complexity of the business.

In our organisation, in addition to the traditional role of financial accounting and reporting, we constantly engage our CFO in our management discussions in the following:

Strategic stewardship of the business, ranging from top level business planning to certain ground level operational matters:

Commercial affairs, such as the review of business contracts and other legal documents;

Business continuity planning, so as to address potential risk management areas;

Information technology and systems and ensuring their robustness;

Human resources development, including succession planning and the impact on business growth plans.

Clearly, CFOs of today are under pressure to be astute business partners, possessing a good blend of technical financial competence, professional ethics, strong commercial acumen, tact and diplomacy, as well as a good measure of common sense. Here's to all the CFOs out there, and their continuing professional evolution

Toby Koh
Group Managing Director
Ademco Security Group

IN Ademco, our CFO plays a very intrinsic role in strategic business planning. As a matter of fact, I insist that the CFO has a keen understanding of the daily operational matters faced by the various teams in Ademco be it, sales, technical, engineering or customer service.

Finance is a resource that must be carefully allocated to get maximum returns. What I mean by maximum returns is more than just shareholders' returns and this is something the CFO must understand. For example, we budget a teambuilding cum family vacation overseas which costs thousands of dollars. From a pure financial point of view, any CFO would find it hard to support such expense. However, in Ademco, the CFO along with the Leadership Team understands the qualitative benefits of such an investment.

The other very vital role of our CFO is the constant engagement of colleagues in being mindful of the best deployment of financial resources. The entire organisation must be aligned in financial discipline and objectives in order to achieve optimal growth.

Dhirendra Shantilal
Senior Vice-President Asia-Pacific
Kelly Services

THE evolution of the CFO's role is an inevitable part of the ever-changing business environment. As human capital specialists, Kelly embraces the notion of job evolution for two reasons. One, it means that there is progress. It shows that the job is moving with the times and is keeping up with business trends to remain competitive. 

Secondly, it shows willingness to change, an important paradigm to adopt, especially in this era of volatility.

The new CFO is not just a scorekeeper anymore; the designation now demands that it has a stake in strategic business decisions. It is after all a synergistic combination of accounting acumen and entrepreneurial strategy.

The melding of these elements will allow an organisation to formulate a clearer 'big picture' as well as a more accurately calculated long-term strategy. With both the CFO and CEO charting a business path on an enhanced collaborative front, what you will have is an organisation that is well-equipped to confront any challenge.

Dora Hoan
Group CEO
Best World International Ltd

INDEED the role of the chief financial officer in today's business organisations has been evolving over time depending on the industry and organisational set-up. In our case as a direct selling company, the dynamics may differ owing to our business model where results are largely driven by organic growth through network-building and market-sensing. Still, we draw a lot from the expertise of our group financial controller who is suitably experienced to provide guidance with good financial management to ensure that the company is safeguarded at all times and used appropriately and efficiently to secure positive business results.

As a globalising SME, we have many subsidiaries across geographic regions. This makes foreign exchange a very critical factor in our business viability and profitability. Our key finance person keeps a look-out for these fluctuations so that we can come up with coherent strategic decisions as and when circumstances demand. 

Although not directly involved in the overall strategic planning process, it is invaluable for our business to bring a financial expert's influence to bear on immediate and long-term implications of our opportunities and risks, for a good financial strategy.

Liu Chunlin
CEO
K&C Protective Technologies Pte Ltd

CHANGES in technology has resulted in a world where automation of accounting work, increased speed of information and decisions has become the norm. These changes create the environment where the CFO's role has to grow, taking note that the number crunching work can be delegated down the line. In our industry, where engineering capabilities of our staff are valued so that lives can be saved, the strategic development of the company rests solely on the CEO and CFO. It has been the case of our company and the situation for our industry that the CFO plays a crucial role in strategic planning, legal, deployment of resources and overall general management of the company.

Daniel Soh
Director
Amrop

INCREASINGLY, CEOs are looking for CFOs who can add value at the strategic business level, in addition, to building credibility in the financial numbers. The ability to link numbers to the business and vice-versa is critical. The role of financial planning and analysis is key, where CFOs partnered to drive better reporting quality and data analysis, tied in very much to the business and operations.

The CFOs should also establish the finance function to drive quality in management reporting and internal controls. There is also a need to develop and lead the finance team to be business partnering and commercially inclined. In partnering CEOs, CFOs have to anticipate what the CEOs need and are looking for, including all the perceived pitfalls and dangers to potential business transactions. In this respect, CFOs must be prepared to come up with alternative strategies to try and minimise the downside risks. The CFO role has to ensure the risk management side is addressed and the CEOs understand the entire implication of a business transaction.

On the whole, the CFO must demonstrate his/her adaptability in different operating environments as well as his/her resilience in driving activities to conclusion. CFOs must also possess a very strong commercial sense and constantly look at ways to help the business make better decisions. 

http://www.businesstimes.com.sg/sub/premiumstory/0,4574,438100,00.html?

CFDs more for savvy investors

Q: I have a small portfolio of unit trusts and I am exploring to invest in other instruments. I have seen advertisements on Contracts For Differences (CFDs). What is it and how does it work? Is it suitable for new investors?

A: Contracts For Differences (CFDs) originated in the early 1990s as market participants seek to short stocks without having to undergo the protracted and costly process of borrowing the respective stocks.

A contract for difference is a contract between two parties, typically described as 'buyer' and 'seller', stipulating that the buyer will pay to the seller the difference between the current value of an asset and its value at a specified future date.

It is a tradable derivative that mirrors the price movements of the underlying asset that may include stocks, currencies, bonds and market indices.

Several major advantages of trading CFDs contributed to its popularity over the recent years. CFDs offer the flexibility of cash settlement - the investor shares the benefits and risks of owning a security without actually owning it. CFDs also enable the client to short the underlying asset without having to engage in stock borrowing or take on increased funding. In addition, they offer tax benefits and as a margined product, increased leverage.

CFDs may appear attractive but they have potential risks. For one, the high leverage associated with CFDs magnifies any losses and the spread imposed to enter and exit positions will erode any profits if there are no large price movements. The CFDs market is not highly regulated as well.

For investors who own a portfolio of investments, investing through CFDs can potentially help to further diversify or hedge the portfolio to generate greater returns. However, this is likely to benefit the more savvy investors who are familiar with the intricacies of CFDs.

New investors are encouraged to be familiar with leverage, understand one's risk tolerance and financial limits and most importantly, carry out due diligence on the different CFD brokers in the market.

http://www.businesstimes.com.sg/sub/campus/story/0,4574,438088,00.html?

Investing in ETFs instead of individual stocks

Investing in ETFs instead of individual stocks


Q: I have heard about Exchange Traded Funds (ETFs) that track the Straits Times Index and some investment books claim that this type of funds are an easy way to invest in the stock market. What is your advice?


A: ETFs, like shares, can be bought and sold at an open market price through the exchange on any trading day. They attempt to replicate the performance of a stock market index or performance of a certain sector.

The main difference between a share and an ETF is that shares represent holdings of a single entity, whereas an ETF is a group of stocks that has been pooled together to form an investment fund. One such example is iShares MSCI Singapore, an ETF that tracks the Straits Times Index's (STI's) performance. ETFs offer a passive and an alternative investment into the underlying securities, which would otherwise require a large capital outlay if held individually.

Other benefits of ETF investing include the ability to access markets that are restricted to foreign investors, for instance the Taiwanese market.

The same can be said of the SPDR Gold ETF. Rather than buying physical pieces of gold or trading in gold futures, the ETF is an easily accessible investment vehicle for retail investors to buy into the performance of the precious metal.

Although ETFs may be attractive as investments because of their low costs, tax efficiency and stock-like features, they may suffer from illiquidity and low trading volumes.

Further, the performance of ETFs may not completely track that of the underlying securities.

Lastly, we need to be mindful that not all sectors of an economy perform in tandem. Investors who wish to seek above-market returns may see value in individual stock selections, or unit trusts where the fund manager exercises discretion in picking good potential stocks that may outperform the benchmark.

http://www.businesstimes.com.sg/sub/campus/story/0,4574,437082,00.html?

ABCs of share trading

MANY doors are open to 18-year-olds in Singapore these days, and one of them is share trading. They can buy and sell shares - unless they are an undischarged bankrupt, of course.

PRICING PRESSURE
In choosing a brokerage, look at its reputation, history, and quality of service provided in terms of research, advice and accessibility to trading representatives or remisiers
Last week, we introduced equities as a form of investment and explored different types of shares.

This week, we roll up our sleeves and talk about investing proper.

Step 1: Opening a CDP Account

Before investing, you need to familiarise yourself with the Central Depository, or CDP. CDP provides depository, clearing and book-entry settlement services for securities traded on the Singapore Exchange (SGX).

To make a long story short, you need to open a CDP account before you can trade in securities listed on SGX. Shares you have bought from SGX will be credited to the CDP account.

To open a CDP account, you can either approach CDP at SGX centre, or apply at your chosen stockbroking firm. You will need the following: your identification card (for citizens and permanent residents) or passport (for non-Singaporeans) and Malaysian identification card for Malaysians, as well as your work and re-entry permit (for foreigners and permanent residents working in Singapore).

Step 2: Choosing a stock broking firm

You will next need to open a trading account with a stock broking firm. All stockbrokers should be members of SGX-ST (the list can be found on the SGX website).

A trading account allows you to trade shares in the stock market. To sign up for one, you will need to sign your trading application form in the presence of an authorised officer at the stockbroking firm.

In addition to the documents that you brought to open your CDP account, you will need your bank account number, CPF investment account number (if applicable), and CDP account number (if applicable).

Then, simply complete a linkage form obtained from the stockbroking firm to link your CDP account with your trading account.

What should you look out for when picking a stockbroker?

Chong Kek Weng, senior lecturer at Ngee Ann Polytechnic's School of Business & Accountancy, says: 'Important considerations will be the reputation, history of the stockbroking firm, and quality of service provided in terms of research, advice and accessibility to the trading representatives or remisiers.

'It may be beneficial to choose a firm that is able to provide multiple channels to access your online trading account and to trade. It is also advantageous if the firm is able to offer you opportunities to trade on other exchanges.

'A secondary consideration may be the firm's commitment to investor education of retail clients,' he adds.

Taking note of costs

While there is no fee for opening a CDP or trading account, Mr Chong warns that there are fees one should be aware of. 'You only pay when you transact to buy or sell shares. The transaction cost will include brokerage commission, depending on brokerage firm and transaction volume, CDP fees (0.04-0.05 per cent of the contract value, depending on the type of instruments traded) and the 7 per cent goods and services tax.'

'But what if I intend to trade without the advice of a broker?' you may ask. Brokers are, fortunately or unfortunately, the individual investor's direct link to trading. Although technology and the Internet has made it easier for individual investors to take control of their portfolios, the basic rule still applies: you need a broker if you want to trade.

Step 3: Deciding on a trading platform

Whichever stockbrokerage you choose, you should be able to trade using a variety of platforms - broker assisted, Internet trading, or mobile trading.


Broker assisted
When you sign up with a brokerage firm, you will be assigned a broker. You can approach your broker for advice, as well as task them with buying and/or selling orders. Broker assisted trading commission is generally 0.5 per cent of transacted value for below $50,000; 0.4 per cent of transacted value for trades between $50,000 and $100,000; and 0.25 per cent of transacted value above $100,000, according to Mr Chong.


Internet trading
If you want to be in control of your trades, Internet trading might be the way to go. In Internet trading, you need to input your own buy/sell orders.

The brokerage commission for Internet transactions is generally about 0.275 per cent of transacted value.


Mobile trading
With the advent of, and growing popularity of smartphones, many brokerages have applications created for the technologically savvy trader. This again puts greater control over the portfolio in the investor's hands.

Jargon you might want to know before placing orders . . .


Blue chips: These are listed companies with a good track record of steady profit growth and dividend payments, good management and sound reputation.


Limit order: An order to transact at a specified price. This guarantees the price at which you will buy or sell a security.


Market order: An order that requires immediate execution at the best price available.


Stop order: A market order that kicks in when a specified level has been reached. This may be a stop-loss or stop-limit. The exact price cannot be guaranteed, but this can be a good way to protect your downside.

. . . and some fun stuff


Stalking-horse bid: An initial bid on a bankrupt company's assets from an interested buyer chosen by the bankrupt company. This basically allows the distressed company to set the bar so that other bidders can't low-ball the purchase price.


Dead cat bounce: A temporary recovery from a prolonged decline or bear market, after which the market continues to fall.


Next week, we look at some strategies you can employ when trading and learn why developing nerves of steel is important in the trade.

http://www.businesstimes.com.sg/sub/campus/story/0,4574,437086,00.html?

How to Get Installous in Cydia

Recently i've upgraded and jailbreaked my iPhone 3G, but I need to load in free apps. To my surprise, I cannot find Installous program unlike in my iPhone 4. So you will need to manage the Cydia repository sources manually. Here's how to get Installous in iPhone 3G:


Go to Cydia. then manage then sources. Then press edit (top right). then press add (top left). Type in http://cydia.hackulo.us/ . when that is done just press continue anyway because it will pop up a message. then search for installous and bam its there! ;)