Speaking to The CFO, Acuity Knowledge Partners’ CFO, Ian Mullen shares how he’s leaning on eastern markets to help mitigate the impacts of the recession happening in the west
The UK is gradually slipping into a recession and tasking many CFOs, 55% in fact, with reducing costs as their top priority as falling revenues pinch corporate margins, according to Deloitte’s quarterly CFO survey.
As markets in the west grow in volatility, businesses with operations in the east could soon rely on those markets to help mitigate some of the impact.
Speaking to The CFO, Ian Mullen, CFO at Acuity Knowledge Partners, offers his outlook for the UK’s impending recession and how he’s leaning on the company’s eastern market workforce to help mitigate some of the impacts of the recession in the west.
Hopefully, it’s a mild recession. We’ve had exceptionally strong growth over several years. The nature of our business will hopefully mean that we will still see growth and significant growth, but just not at the same levels as to what we’ve seen historically.
The reason why I say that is that the nature of our business, is once we start working with a customer, we tend to retain that customer for many years. We like to become strategic partners with our customers and the biggest single dynamic that has been growing our business over time is basically what we would call land and expand, so the customer sees the quality of what we do, and then they want to do more with us.
The recession will mean that some of our customers have less of a need for the same volume of business. But some of the dynamics around, certainly this recession, will be different from previous recessions, we’ve got very high inflation at the moment.
One of the things that is certainly a positive for our business model is higher wage inflation in the West versus India, Costa Rica, China, and Sri Lanka. The West has had very low wage inflation for many years. So higher wage inflation will make the dynamic of outsourcing offshoring a process more beneficial to our customer base.
There are pros and cons in there but because we’ve got a stable cohort of customers, and we still expect there’s going to be a significant amount of them that will continue to grow their business, it’ll be mixed customer by customer. However, I still think we’ll see growth, it just won’t be as significant of what we’ve seen over the last few years.
We’re spending a lot of time working on technology solutions for our customers. We have 100 developers who are based in Bangalore, who are working solely on technology solutions for our customers. And it’s called BEAT: Business excellence automation tools. We’re striving to automate and improve the quality of the experience for the customer. Very recently we rolled out a new app, which is specifically for this, and we try to integrate our customers as much as possible into our technology solutions. That will provide more value to our customers and we think that’s a better proposition for them.
And expanding into new jurisdiction. So our sales force has largely been historically based in New York, London and Hong Kong. We’ve now expanded our sales force into multiple parts of the United Emirates States, into Dubai, and we’re looking to roll it out that sales force into two other countries as well.
Ultimately, the CFO is the custodian of data. Maybe not all data but the vast majority of data. I think the ability to take that data and not only make sure that in a controlled manner everything is done to whatever standard has to be met by the auditors or a regulator, it’s the so what that comes from that data, and being able to put that data in front of senior business leaders to help drive business decisions.
I think data analytics would be the key part of the answer to this question. That you can put data that can really help improve the outcomes for the business, its efficiency and the way that the business is run and ultimately, drive the bottom line EBITA, or revenue growth or any aspects of your P&L. Those business insights are useful and timely.
One thing that I’ve learned the most from working in those organizations, and bringing that to my experience today, is understanding financial services, the way the markets work and the types of products that we offer to customers.
It’s an interesting question you ask, because if I reflect back to the different roles I had in the likes of HSBC or Merrill Lynch, although the underlying numbers, if I was to say the size of the businesses that I was responsible for, are massive, you’re only dealing with a relatively small part of the organization in percentage terms of revenue or profit.
The experience that I’ve gained post-2015 in leaving banking and basically working in roles where you see the entirety of the business and everything in the business operations is more relevant to experience for the job I do today where you’re responsible for everything around group accounts, funding of the organisation and strategic initiatives. At Merrill Lynch, or HSBC, you’re involved with strategic initiatives around that business, which is large underlying numbers, but still a small part of the overall business. I think being involved with the totality of a company is more relevant experience.
We have people in many different countries. Communication and collaboration is key to that. I think we’ve got a very strong culture around both of those things. We’re very open and transparent and we have many meetings where we have people from all of those countries on those calls.
Probably good to talk about an example […] we’ve got 500 customers globally across seven different business units and quite often those customers will go across multiple business units. The employees that are supporting that one customer could be in multiple countries so you’ll end up with what we call delivery: the function that basically does the work for the customers are our delivery employees. So you could have delivery employees potentially in two, three, or all four countries supporting the same customer.
