Warren Prinsloo - CFO Jasco: "Either step up and play your part or step down"
"We have to ask ourselves how we as a country can compete with countries like South Korea and other Asian Tigers. Frankly, I don’t think we can," says Warren Prinsloo (39), CFO of Jasco Group. Warren is a qualified Chartered Accountant (SA) and has been a registered member of the South African Institute of Chartered Accountants since 1999. He is also a member of the Institute of Directors South Africa and has more than twelve years of experience in finance and commerce. He completed his B.Com at Wits University in 2004 followed by his B.Acc in 2005. He passed the Board exam in 2006 and then completed his articles before qualifying as a Chartered Accountant in 1998.
Warren began his career as an assistant manager at Ernst & Young in 1999, and has also worked as Group Accountant at Northern Engineering Industries Limited in 2000. In late 2000 he made a move to the Massmart group, a South African-based group of wholesale and retail chains, where he fulfilled a variety of senior financial management positions. After six years at Massmart, the opportunity arose to join the board of Jasco. Warren took up the position of Chief Financial Officer in 2006, a position which he holds to this day. He is also currently the chairman of the ICT Steering Committee and a director of several Jasco subsidiaries.
The Jasco Group was founded in 1976 and listed on the JSE in 1987. Originally the company focused on distributing, designing, installing, assembling and manufacturing electronic and electrical products, services and solutions. Jasco played a leading role in electronics and high technology for several decades. As part of a growth strategy that includes tactical acquisitions, the Jasco Group completed a merger with Spescom in 2010. Spescom, a listed company since 1987, focused on delivering integrated business communication solutions that allow businesses to communicate with their clients, leveraging voice, video and data technologies. Today the new Jasco Group employs between 800 and 850 people nationwide.
What do you enjoy most about your job and why?
What I enjoy most about my job right now are the intricacies of completing a structural turnaround of two established, merged companies. Bringing the two organisations (Spescom and Jasco) together into one integrated company on a new path poses a unique set of challenges that change almost on a daily basis. This sense of unpredictability keeps me sharp and makes my job interesting and fulfilling. Part of what I enjoy is the fact that we are really building something sustainable for the future. We started the process of merging officially in January 2011, but the restructure really gain impetus when Jasco's new CEO, Pete da Silva, took the helm.
How do you perceive the role of the CFO having changed in the last five to ten years?
I think what has happened is that the role of the CFO has changed greatly from more of a back-office financial controller to being the right-hand business partner of the CEO. The role has become much more of a manager of key business risks and advisor to the rest of the Executive team. . The modern CFO thus plays a pivotal role in the organisation from a leadership perspective, along with the CEO, in determining the strategy of the business and executing the game plan.
I personally have experienced this change positively; I find it provides an extra dimension to my responsibilities and tasks. It's both challenging and frightening at the same time. It really is a matter of personal choice: you either have to step up and play your part or step down.
How do you see the role of the CFO evolving in the next say five to ten years?
I think the only constant we have today is change, not just in the industry and environment I personally find myself in, but in the greater environement. However, this industry in particular has always been about rapid change, which can be difficult to handle and which certainly put me in a right state when I joined Jasco at a relatively young age. Part of our rapidly changing technology driven world today implies that greater interdependency extends beyond national borders, and the concept of time has changed. Speed has increased tremendously in all facets of our modern lives.
You, as the CFO, have to get a lot more done in less time - as demand is on our time is ever increasing . Coupled with increasing cost pressures on organisations and people, requires the CFO has to work smarter than ever, and be much more efficient with how time is spent and how resources are allocated.. This fits the new role of the CFO, where his or her leadership is much more pronounced.
Would you say that accurate forecasting and budgeting is still feasible for a financial department in today's tumultuous financial markets?
I personally have never seen a budget that perfectly anticipates what will happen in the following year. These days I suppose it is a bit of entrenched behaviour. What I have seen over the past decade is that business has shifted into a continuous forecasting mode. Your lead indicators are becoming important measures - which gives you a good feel of what your turnover in the forthcoming period will be. Although you can pretty much rely on past experiences or trends, which differ from one business to the next, these can an do change without warning. You have to know where your turnover is coming from and plan accordingly, make sure you look further out. This diminishes the chances of you being surprised. In other words, despitesignificantly greater uncertainty today, , budgeting it is still a very important planning function as long as you act on it properly.
What do you see as the greatest challenge for South African companies in the global economic situation?
It's quite clear that South Africa is lacking in relative efficiency. That, to me, is definitely a concern. Evidently, it's becoming just as clear that it is increasingly difficult to compete with the efficiency and cost-effectiveness of countries in the Far East. I recently visited - and will visit again soon - South Korea and I was astonished by the hard working population of that country. A large part of their disposable incomes goes straight into their children's education. We have to ask ourselves how we as a country can compete with countries like South Korea and other Asian Tigers. Frankly, I don't think we can.
Look at our unemployment figures - every one out of four South Africans is unemployed! Being able to up our game and face global challenges requires a radical change in structure and moreover, our mindset. South Africans are just more casual in their approach and mindset. It's not that we are lazy or don't want to work hard - it's just a different mindset and culture. At this point we lack the skills to boost our employment, in which education also plays a crucial role. To enhance our national productivity remains a challenge for our country, especially in today's global competitive situation.
Which skill(s) do you think a finance professional or director should master to be most successful in his work?
The required skills for finance directors revolve around two vital elements: people and time, and how to manage them both individually and together. At all times you need to be able to prioritise, with regards to management of people and time. Although you always have to give people a fair chance to prove themselves, I think it is always good to test people's reliability before you actually trust them.
With respect to your personal skills: make sure you identify areas of weakness you might have and make sure your team is stronger than you in that particular area. That enables your team as a whole to function as a much stronger unit. I learnt this valuable lesson during my stay at Massmart.
Which achievement or project in your business career are you most proud of?
Referring to the transition of combining Jasco and Spescom - the fact that we have been able to extract value by putting the two businesses together is something I consider a great achievement. This restructured turnaround is a work in progress and being part of the team that is realising value is fantastic.
What we have been doing for the past year has been quite critical, and we have been exposed to many challenges along the way. The fact that we are still able to demonstrate value to our shareholders is very gratifying.
Although I would always like things to move faster, the pace at which the process has been evolving is according to what was expected. We foresaw that the restructured turnaround to be a 2-3 year process.
What particular changes have you as the CFO implemented in the new Jasco group after merging with Spescom, or the company as a whole?
In terms of repositioning the company after the merger, we have had to implement, and are in the process of implementing, a number of critical changes within our company:
- Moving to a standard ERP system (that's happening now);
- Standardising our IP and connectivity platforms, which is running in parallel with the ERP project;
- We have commenced a 3 year process of rationalising unnecessary statutory entities in the new Jasco group, which will further enhance value;
- We combined the head offices of Jasco and Spescom to create a single head office with enhanced capacity to support the future growth of Jasco.;
- Supporting Pete in the overall organisational restructuring of the group ( which is largely complete by now);
Lastly, and occupying most of my time right now, is looking at the structure of my balance sheet, and conducting a critical analysis of the best alternatives for Jasco.
Who is your role model in life and why?
During the course of my career I have had the privilege of some excellent mentors. Guy Hayward (CFO of Massmart) was a key role model; he gave me a lot of guidance when I was fledgling executive, and was quite pivotal in my career. I especially admire the manner in which he approached things - I certainly applied a lot of the lessons learnt at Massmart in my everyday life..
Another very important mentor in my career was Martin Lotz, the former CEO of Jasco. He gave me a lot of guidance when I first moved into the Group CFO role at the six years ago.. He especially taught me to stay level-headed and keep my feet firmly on the ground.
What vital piece of advice would you give young ambitious finance professionals?
What I would challenge young professionals to do is to ask themselves every day if what they are doing today is still relevant." Why am I doing what I am doing? Is it adding value, is it achieving my objectives?" I think we don't ask that question often enough. If the answer to that question implies that you have to change something, then don't be afraid to do so. Challenge things, even if they have been that way for a long time and don't just accept things at face-value. Challenge the status quo, otherwise you risk landing in a comfort zone, where unexpected things can surprise you.
If you also would like to share your ideas with the CFO community, please get in touch with us to arrange an interview with you.Please contact Jurriën Morsch on [email protected].