Tech is a game changer, says Elvin de Kock, CFO of Etion Limited
"More and more companies are looking at how they can exploit technology to increase their competitive edge."
Elvin de Kock, who took on the role of Etion Limited CFO in January this year, believes that while the use of technology in decision-making will add immense value to businesses, South Africa is not yet on par with other, more developed countries. “If you take artificial intelligence (AI) for example, South Africa is still some way away from complete AI. Globally, the level of adoption of complete AI will be earlier. Certainly, some of the bigger banks are already looking at AI, while some of the insurance companies are looking at blockchain and how they can use this to improve their reinsurance processes.”
Will technology replace the finance function – or the CFO? No, says Elvin: “There’s a continuous pressure to optimise cost structures in business, so I can see AI being a natural progression of some processes and it will certainly increase value because routine tasks are automated, but it’s about using AI to add value to the business. In the longer-term, do I see the role of the CFO becoming defunct? Not at all.”
Elvin joined Etion at a very interesting time, as the business has recently finalised the acquisition of LAWtrust and has also rebranded from Ansys Limited to Etion Limited. He had to hit the ground running. “It was also financial year end,” he laughs, “but luckily most of the finance team that was here before my arrival is still here, as is the person who acted in the role of CFO, who moved back into the role he was previously. So, there’s continuity in the day-to-day finance function, which is ideal, and which has allowed me the space to get more involved in the acquisition. Etion is currently driving a much bigger strategy than previously, transforming itself from a technology engineering business to a digital technology solutions provider.
Etion, a wholly owned South African company operating in the digital space, has been around for more than three decades, and has a strong history of design and manufacturing, having developed world-class expertise in rail, mining, telecoms, defence, and online security. The organisation currently operates in the areas of, Safety and Productivity, Digital Network Solutions and Original Design Manufacturing, which houses the group’s current cyber security and defence offerings. The acquisition of LAWTrust is thus very complementary and will bolster Etion’ cyber security offering.
Work on the LAWtrust acquisition started last year, prior to Elvin’s arrival, and he says current efforts are centred on meeting the conditions of the precedent and integrating that business into Etion. LAWtrust, a well-established company, provides commercial and in-house encryption solutions. It is one of only two entities that can issue electronic, digital certificates, explains Elvin, and also runs the ID card system for Home Affairs.
“It’s a really exciting acquisition; a game-changer. It will catapult Etion into a new space. It will allow us to take what we already do and build onto it. The opportunities on the horizon are so much wider now.”
Fit for purpose
Elvin’s experience lends itself well to his new role. Over the course of his career, he has been a CEO, a CFO (twice), a CRO, and run technology operations in a large bank. He says that after his first meeting with Etion CEO Teddy Daka, he was sold. “It felt good,” he says, adding that the strategic thrust at Etion is very important. “When you listen to most companies, their strategic thrust is about shareholder return, which it is all good and well, but Etion has a greater goal. The company is driving an accelerated growth strategy, which will see it operating in a much larger turnover bracket by 2023 and the most important reason for this is that it will create 1,000 to 1,500 direct jobs and make the various businesses within the Etion umbrella sustainable. That’s pretty powerful and something which resonates with me.”
Elvin says that the journey to get to this target is critical and will be done by both acquisitive and organic growth. “The key question is, how do we develop an organisation of competencies that will take the organisation to this point?” he says. He admits that he has had to apply himself to the matter of creating the right structure and processes to enable the business to deliver on its strategy.
“I’ve had to consider how I, as CFO, move beyond the traditional ‘accounting’ role and move to adding business value. It’s about communicating growth insights, scanning the horizon and analysing this effectively, and adding commercial value.”
His new role has, however, been challenging at times, Elvin says. “When you’re coming from large multinationals to a smaller company where the processes and governance you’re accustomed to perhaps isn’t there, it takes some getting used to. We are a listed entity on the AltX, so there are things we have to do, and then there are things which are appropriate for the business. You have to ensure that what you put in place is proportionate and fit for purpose in the business. You don’t want to use a sledgehammer to crack a nut!”
Finance under fire
Asked what he thinks is the most pressing concern currently faced by those working in the finance sector, Elvin answers without hesitation: “The impact of all of the corruption issues that are surfacing now – and surfacing quick and fast. Also, the impact on the reputation on financial professionals overall. Once upon a time, South African CAs were highly sought after, now there’s this stigma. How do we collectively recover and what actions do we put in place to restore that trust in the South African finance community as a whole? I don’t have the answers. I think we all need to ensure that in the spaces where we operate, that we uphold governance and ethical standards without fail. It’s a very difficult time.”