Richard Stoffelen is the Chief Financial Officers of Centogene - an international privately owned BioTech/HealthTech company, based in Germany. Here he tells us about what it’s like to be the CFO of Centogene and offers his piece of advice for other financial directors.
What were the goals that you arrived with when becoming the CFO of Centogene over a year ago?
My primary goals were to professionalize the finance department of this fast-growing company, to raise a first round of external capital (Round A/Pre-IPO funding), and to prepare the company for a successful IPO.
Would you say that you have started working towards accomplishing them?
Together with the existing and new Management Team and greatly supported by the Sr dir Corporate Finance/Investor Relations, we have been very successful so far, which was confirmed by successfully raising €25 million in the Round A funding.
Currently, we are working on the further continuous growing of the company and its processes, and towards the IPO plans in the near future.
What is the company’s growth strategy? What part do you play in it?
The company has been on a great growth trajectory ever since its foundation about 10 years ago. We have positioned Centogene in the international medical diagnostics field. We grow very fast in our pharmaceutical segment, where we deliver services to the global orphan drug developing companies: a.o. patient screening programs, assistance in drug-discovery and –development programs, longitudinal monitoring programs, developing biomarkers for monitoring the patients and improving the early diagnosis.
My role in all of this is to support the strategic business, with adequate financial modelling, planning, budgeting and funding.
You have over 25 years of broad experience with international audit functions – how did your career path lead you to becoming the CFO of Centogene? Which one of your experiences was foundational?
After being in the Audit profession for a long time, a lot of the roles I had played in that field have contributed greatly to my new role:
· Running an office, and being part of the management team of KPMG for the south of the Netherlands has strengthened my managerial experience.
· Doing management development roles in KPMG in the Netherlands, Hong Kong and China was a crucial experience that helped me in the development of the new management layer at Centogene.
· Working on business development in audits in the past has provided me with valuable knowledge in relation to doing what I do now when securing funding for Centogene.
· Working across the world in various roles proves to be extremely helpful in a managerial role, especially in a company with employees from over 30 countries.
· Having been involved in many strategic processes, helps me tremendously to look around the corner of the pure finance function, which is crucial to deliver on all the needs for a modern CFO.
What is your motivation behind working for a biotechnology company?
It is fascinating to be at the brink of many new developments that really make a direct impact on the lives of many people around the world.
It is fascinating to be in this fast-moving industry, where new opportunities arise on a daily basis, and where we, as management, have to make important choices on a daily basis in relation to the right opportunities to pursue.
Where do you see Centogene in 3 years? What does the future hold for the company?
In my opinion, Centogene will expand significantly in 3 years and will be delivering even more services to patients and the orphan drug industry, having an even bigger impact on people around the world – and not just patients and their families, but also on investors in both our company and the orphan drug manufacturers.
What would be your top three tips for other CFOs?
1. Be aware of the business needs, don’t focus solely on the finance role.
2. Always be prepared for the unexpected.
3. Enjoy what you are doing and cherish the contribution you can have in the development of your company.
About Centogene:
Centogene - The rare disease company
Transforming global genetic date into medical decisions.
While only a small number of people are suffering from a singular rare disease, 350 million people worldwide are suffering from rare diseases, whereas 80% of rare disease are caused by mutations in our genome.
Centogene is ideally positioned to serve and support patients and physicians worldwide while accelerating drug discovery and development of orphan drugs.
· we are the sole provider of a GLOBAL perspective to >3.200 rare diseases
· we close the gap between the diagnostic and therapeutic hemispheres
· we continuously translate scientific discoveries into innovation like new biomarkers and novel molecular tests to guide drug development and clinical practice
· we leverage our vast –omic data to support the development of the personalized therapies of the future
· we have the largest genetic mutation database (CentoMD®) regarding rare diseases with patient date from over 115 countries worldwide
Website: https://www.centogene.com/
By Daniel Mason, Managing Director UK, Prophix Software
Headquartered just outside Toronto in Canada, Prophix Software is a leading developer of innovative performance management solutions, designed to automate financial and operational processes. Thousands of finance leaders in nearly one hundred countries use Prophix to empower their organisations and gain valuable insight into business performance. Prophix and its partners deliver superior value by combining high-end functionality with low cost-of ownership and fast implementation. Daniel Mason has been with the Prophix organization for just over 7 years, having spent a total of 17 years working within the corporate performance management sector. He is currently responsible for Prophix’s UK operations, including sales, marketing and professional services.
Here Daniel explores the modern finance function, the skills finance leaders need to recruit and offers his views on how organisations can prepare for the future by investing in their finance teams.
You can’t handle the truth
The truth of business comes out in the numbers. Not just revenues and profits, but headcount and staff turnover, customer churn and marketing reach.
Finance has historically been the natural home for numbers in an organisation. But recent reports show that finance teams are struggling to keep up with the growing demands of modern business. A lack of data literacy, continuing reliance on manual tools, and poor collaborative skills, are seeing the finance function side-lined as business transforms in this data-driven age.
The challenge is more acute now, highlighted by the capabilities brought by global connectivity and new technology. But issues of skills development and technology investment in finance are not new.
I’ve been working in the finance world for the last 17 years and the same issues were apparent when I first moved over. Prophix was founded on the recognition of some of these issues 30 years ago. Yet still, many – perhaps most – finance teams have not changed their practices. Why?
Barriers to progress
In my experience there are three things that hold the finance function back.
The first is a lack of resources. Even though IT was born out of the finance function in many organisations, investment in IT for finance has long been hard to secure. Because it doesn’t have a visible ‘front line’ effect on sales, it’s often overlooked.
The second is the knowledge base. Too few finance professionals have been on a mission to grow their skill base and expand their knowledge beyond its current bounds. The reasons for this are sound: the realities of operating a modern finance function haven’t left much room for personal development. But breaking the cycle of all-hands-to-the-pumps manual processing requires that time to step back and analyse the current processes.
The third reason is a lack of soft skills across the function - particularly communication. This isn’t about lazy stereotypes of finance professionals. It’s about formalised training in building collaborative relationships and releasing staff to have the time to go and build them. While other functions have moved on in this regard, finance has all-too-often remained static.
Building maturity
It’s possible to begin to quantify the problem, or at least recognise just how widespread it is amongst finance teams. The global analyst firm Gartner created a ‘Maturity Model’ to map the transition from historical finance practices to new. That means moving from a messy world of manual data manipulation, isolated in its own silo, to being truly smart about data, and providing strategic insight across the business.
In this Maturity Model, Level One represents those unaware of corporate performance management (CPM) tools – the term for technologies that enable more automated and integrated data handling in finance and beyond into business operations. Level Five represents companies making best use of data – connecting across departments and driving business strategy.
What’s interesting about Gartner’s analysis is that in the most recent update of its research, no companies were found to have reached Level Five. That’s no companies, of any size.
At Prophix, we work primarily with mid-market companies. We, and they, often expect that the largest global organisations will be significantly more sophisticated. But it seems not. It seems all finance teams in every size of organisation might be facing the same barriers to progress.
The ideal modern finance function
These barriers aren’t just bad for the finance function. They’re bad for the business. Finance’s requirement to look backwards as well as forwards puts it in the strongest position to drive strategy within the organisation. By underinvesting in skills, development and infrastructure to advance the finance function, the business is missing out on better insight, evidence-based strategy and enhanced day-to-day decision making.
There are three core areas where investment can unlock a transition of huge value to the organisation.
The first is what might be called ‘Smart Compliance’. Finance teams invest untold time – and sweat – in the production of mandated reports of one form or another. Still today, most organisations produce these reports through manual manipulation of spreadsheets with very poor repeat-ability and little robustness. The skills of manipulation required for a particular task are often locked in the head of a single individual, and audit trails are incredibly hard to produce.
Technology can remove the burden and often manual process of compliance through “Smart Automation”, which not only frees up human resource, but dramatically increases transparency and reduces risk. With time freed, finance teams can start to address more forward-looking issues of strategy and operational readiness.
This operational readiness forms the basis of the second major step. In an accelerated world, getting good information at speed is critical to good decision-making. Given the resources, finance can be the home of “Operational Intelligence”, giving leaders and departments the insight they need to improve decision-making. Analysis can be made available in near-real time against external events.
Of course, sometimes organisations need to look well beyond today and it is improved “Foresight” that forms the third pillar of improved service from finance that can be unlocked with investment. Planning stops being an annual trudge through budgets and likely expenditure, and becomes a process of acquiring and qualifying strategically valuable foresight. This delivers increased accuracy of forecasting, multi-dimensional modeling, resource correctly allocated to sales expectations and much better reconciliation of cross-functional planning. Imagine being able to quickly realise multiple future scenarios and explore the impact of different factors and decisions on the organisation’s success.
Partnering across the business
The ideal finance team should be seen as finance partners, having the trust and understanding of all departmental managers. It’s not enough to simply have the skills and collect data, analyze and report it as required. Since almost everything a company does is ultimately routed through finance, finance leaders need to be able to cooperate, partner and work efficiently with the teams and departments that report to them.
This highlights the importance of investment well beyond technology and systems. Skills remains a big gap in the finance function, both technical and more general.
The technical skills gap is in systems thinking, and financial planning and analysis. With so much effort devoted to manual processing, teams have lacked the opportunity to go beyond the immediate challenge and start to look to the future. There has been little opportunity below the most senior levels to examine operations – both in finance and the wider business - and consider improvements. Freeing time through automation creates this opportunity and the skills gap rapidly becomes apparent: even when the tools are available, teams don’t have the skills to apply them to their maximum potential. For this reason, investment in CPM should be paired with investment in up-skilling to maximise the benefit.
The softer skills gap is in communication, though perhaps calling it a ‘soft’ skill underplays its importance. To deliver the most value to the business, finance teams need to get well beyond the borders of their function and learn to communicate effectively, gain mind-share within departments, and socialise ideas. Building trust across the business will allow finance to enhance every department’s capability with better insight and support for improved foresight and operational decision making.
The truly modern finance function features a mix of skilled individuals who understand new technology, and who are able to interpret data, come up with a solution, point it in the right direction, and then are able to take that information and communicate it effectively through the organisation. Finance leaders need to look at training the people they have, but also at recruiting individuals who bring this mix of skills. People who have the financial intelligence and commercial acumen to understand the data, and see what’s going on within an organisation, and who are confident interacting with their colleagues and communicating information and ideas.
Preparing better for the future
At Prophix, we see lots of finance leaders who are happy with a large team dedicated to manually processing data. They don’t want to grow their role. They don’t want to embrace change. Until a risk is realised, or competitive advantage is lost. By then it can be too late – for the finance function, which has lost its role as the arbiter of truth. Or in the worst cases, for the business.
Finance leaders with ambition need to get closer to the CEO and push the business case for change. They shouldn’t just be signing off big-ticket investments in all the other areas of the business going through rapid transformation, it should be part of that transformation. Performance management may be thought of as a low priority because it’s a ‘back office system’. But extensive research shows that companies that invest in performance management generally outperform their peers 2:1 within the marketplace. The business case for change is strong.
Investment is just the start though. As Gartner’s Maturity Model shows, building a truly modern finance function is a journey, and one that all organisations are still on. 70% of organisations are still only at Level One, not even aware of how much better things could be.
Delivering the business benefits of a modern finance function requires continuous evolution, review, and investment. It's not a one-off project and it certainly can’t be addressed purely with technology. Skills and talent are absolutely crucial, both developing existing talent and recruiting the right new people into the organisation. People who blend technical skills with systems thinking and the confidence to deliver that value across the organisation.
As with any journey, the starting point is to assess where your company is right now. At future-of-finance.com we have developed a comprehensive audit tool that will give you an immediate idea of your position and provide you with a 17-page report with practical guidance on what to do next. So get going today.
Read more at www.future-of-finance.com
Earlier this month, Finance Monthly had the privilege of interviewing the CFO of IBM UK & Ireland (UKI) – Vineet Khurana. Here he discusses his role within the organisation, Brexit implications and offers piece of advice to fledging CFOs.
You have been the CFO of IBM UKI for nearly a year now - what is your favourite thing about your role?
My favourite thing about the role has to be the breadth, reach and influence it offers.
I get to work extremely closely with our Chief Executive and the rest of the leadership team (Sales, Operations, HR, IT, RESO, etc.) not only on all financial matters, but also across a spectrum of other business matters that impact our business - both in the short and long term. As an example, I recently led a piece of work, in partnership with the Corporate Strategy team based at the Headquarters in New York, to re-define our Client coverage strategy in the UK.
As a CFO, I am also presented with opportunities to engage externally with Clients and share with them IBM’s point of view and value proposition, as it relates to Enterprise IT. I personally find this aspect of my role very enjoyable.
What would you say have been IBM UK & Ireland's major achievements in the past twelve months? What has been your involvement, in relation to them?
Our key focus over the last year has been to align ourselves here in the UK & Ireland with IBM’s transformation as a Cloud Platform and a Cognitive Solutions company.
This is absolutely key for us in order to fully leverage and benefit from the breadth of the Cloud-based cognitive offerings that are available. Associated with this, my role as the Finance Leader for UK & Ireland has been to ensure that our resources and investments are (a) prioritized and (b) deployed appropriately in support of this initiative. Of course, we’ve also had to make sure that we have a revised set of operational/performance metrics and reporting capabilities in place.
Finally, as mentioned above, the work we led as a Finance team in regards to re-defining and making our Client Coverage strategy more effective is something I am particularly proud of.
What is the best advice you could share with Fledging CFOs and Finance Directors?
With the role of finance constantly expanding and finance increasingly needing to play a central part in all business decisions, I really don’t think there has been a more exciting time to be a finance professional.
Technological advances are disrupting the status-quo. Companies are utilising technology to transform their business and the way they interact with their clients and employees. This is being done while industry convergence is producing new agile rivals at breakneck speed. With all this change afoot, the role of the CFO needs to change as well.
CFOs need to embrace business strategy in addition to the financial strategy, understand the changing market/client needs in addition to regulatory changes, and deliver business insight in conjunction with data reporting and analysis.
Therefore, my advice is to embrace this change, as it is key to ensure your increased effectiveness in the role and your ability to deliver enhanced value at the leadership table.
In light of the recent triggering of Article 50 - what is your outlook for the future of IBM UK Ireland in next twelve months and beyond?
IBM has been operating in the UK for over 100 years and as such it is an important market in the context of our global business. We have always done and continue to make significant investments here in support of our business and economy. As an example, we recently announced the establishment of four new UK cloud data centres, tripling our UK cloud data centre capability.
In summary, we are making sure that we are well-placed to help our clients as they transform their businesses by improving their competitiveness, as they prepare to exploit new opportunities.
What are the implications and challenges of global Brexit uncertainties faced by CFOs?
I think we all recognise that we are facing an extended period of uncertainty during the exit negotiations. So at this early stage of Brexit, the approach of the CFO should be to understand the potential exposures their organisations could face.
I believe two significant uncertainties centre around import/export of goods and data and the free movement of resources across the continent. The magnitude of these uncertainties will obviously vary by sector and individual organisation. CFOs should look at mapping the relative exposure of their organisations to these elements by carrying out the data analytics work now. This analysis will then allow for quicker action and informed business decisions to be taken, once the negotiations are concluded and changes in regulations are clear.
