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Interview: How CFOs Can Handle Cultural Changes Tied to Innovation

July 20, 2018

An ability to adapt quickly to spontaneous change along with taking advantage of access to vast amounts of data to make better financial decisions are just two of the many skills that today’s CFOs should have. With new technologies aimed at helping almost every aspect of a company’s operations, from slashing administration and process times to automatizing invoices and payments, CFOs have to increasingly work closer with IT departments to scrutinize these new technologies to minimize vulnerabilities and maximize value they could potentially bring to the company.

Ariel Azar Núñez, CFO at Chilean state-owned energy firm ENAP, shares how his company is implementing new tech and dealing with the cultural changes associated with innovation.

ENAP’s revenues reached $6.4 billion in 2017, up 23 percent from the year before, thereby pushing the company up three spots in Latin Trade’s most recent Top 500 Companies in Latin America ranking.

Q: How is ENAP innovating?

A: At ENAP, we stepped up our innovation efforts over the past two years. To that end, we created an Innovation Office, under the IT department, which in turn is under the Finance and Administration department.

We also created a governance mechanism that manages everything to do with innovation internally in the company, and from that, we’ve been developing a series of initiatives that have helped our finance and administration processes be more efficient. In my case, specifically in the finance department, we’ve worked on automatizing administration processes. The aim of all this is to create an innovation culture within ENAP, and to reach that goal we decided it was necessary to create that Innovation Office. We are also receiving help from outside: Ernst & Young is helping us through the whole process.

Q: What are the risks when implementing new technologies in a company’s finances and processes?

A: There are three main risks. The first has to do with cultural change, which means implementing technology, innovation, and automation for work that used to be manual, and depended too much on people. I think that calls for a change in culture.

The second risk has to do with the resistance that the organization itself can have toward the loss of jobs that could result from automation.

The third has to do with the need to establish the necessary controls that will ensure that innovation is sufficiently robust to avoid any vulnerabilities to the internal control of the company.

Q: What are ENAP’s priorities when it comes to automation?

A: We are in the process of managing this change. The main thing is to avoid automation of processes that don’t meet our requirements in terms of trust and confidence. They must comply with SOX Compliance requirements and our own internal rules.

Q: How are you dealing with the cultural change required for innovation and automation?

A: We are highlighting for the organization the benefits of automation of certain administrative processes, especially with regards to saving time and security when carrying out transactions that minimize human error. So we are showing the value that automation brings to the organization by highlighting the way it optimizes the process chain.

Q: What is ENAP doing in terms of cybersecurity?

A: For the past three years we’ve been working on many aspects of cybersecurity. The first step we took was work with Accenture to evaluate our systems, both administrative and industrial. We also hired third-party ethical hackers to test our systems, which has helped us strengthen our industrial and administration networks.

But perhaps the most important step we’ve taken is to create a Cybersecurity Office, which reports directly to the CFO, because we believe this is a topic that will evolve quickly and requires extra time and care from a focused, specialized team.

Q: What is the main challenge CFOs face today?

A: I think the main challenge for CFOs in large corporations has to do with quickly adapting to the changes in this role. Today, the rate at which our profession is changing is very fast, and the amount of information at immediate disposal to help us make decisions is enormous. So, I believe CFOs must have this ability to adapt quickly and take advantage of the vast amount of information to make better decisions for the company.

This interview was conducted by Latin Trade for Council of the Americas.