Interview: With New Technology, Test before You Invest

While it’s important to implement new technologies in the financial department of a company, they should be thoroughly analyzed and chosen for what each one can bring the best results to the business, rather than just implementing a new technology because it is fashionable.

That is the view of Alonso Botero, vice president of finance at the Colombian pharmaceutical firm Tecnoquímicas, a multilatina that also has offices in the Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, and Panama. In this interview, Botero shares his thoughts about new technologies, as well as cybersecurity, data, and the changing role of a CFO.

Q: What is Tecnoquímicas doing in terms of new technology in the financial department?

A: We already have electronic payment systems in place, but we’re not seeking to have something really top of the line in that respect. I think that’s more the nature of a consumer goods company. Although we are a pharmaceutical firm, on the retail side of things we are more like a consumer goods firm.

In terms of internal innovation to manage our coverage, we have focused on natural coverage. But we are thinking about being more proactive on this respect and look for different hedges we could use that are appropriate for our industry.

In consumer finance technology, we’ve focused on using our internal knowledge and data. We’ve leveraged our deep knowledge of customers and the infinite sources of information available to us to truly understand the profile of our clients as well as our credit risk in any given moment.

Q: What’s your opinion on blockchain?

A: I think it would be amazing to use. It would help a great deal, especially in our case where our customers aren’t in the country’s biggest cities. It’s a way of minimizing risks for our sales representatives, who often are the ones who end up personally taking the cash to the banks in those towns. But many times, there isn’t a very large coverage for a company of our size and our specific needs. (We cover some 600–700 towns.) I think blockchain is something we should look into further.

Q: What are the risks associated with handling data?

A: In my specific case, when I looked into the processes, I found a vast amount of information that could be used to develop a big data model for our budget department’s calculations and forecasts. I think that’s where we should exploit the data and from the information we get, we will be able to gain a deeper understanding of our balance sheet.

We have an infinite amount of information. I’ve been looking into partnering with a university that is opening several big data courses so we can begin to create far more precise models that will allow us to better manage our resources.

Q: What are you doing in terms of cybersecurity?

A: In our case, cybersecurity has been more about our alliances with the banks and their own security systems. For our part, our IT department has put very good and modern firewalls in place. There have been significant security advancements in technology infrastructure over the past five years. And it’s not just physical, but also for our data in the cloud, so that we can guarantee the continuity of our operations in case of a cyberattack.

Q: What are the risks associated with implementing new technology in the financial department?

A: The risks, as in any department, would be more to do with having an open mind toward technological changes. That’s the main risk. Our stance on this is that if we don’t see any specific added value in a new technology, we don’t use it. We won’t just use a new technology because everyone else is using it. We carry out a thorough research process before we use anything new, because given the type of company we are, most of our investments are geared toward strengthening our products and marketing, as well as things that will guarantee our operations. But to invest in something that goes beyond the financial area, per se, from the financial department’s point of view, is not our style. Because in terms of our clients and customers, it’s not something we need. Of course, if it helps us with our forecasts and to optimize our working capital, then we are open to it. But it must give a specific added value to our clients and stakeholders.

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