Regional Finance Leader Talks about Business Performance, New Finance Focus Areas and Innovations within the Finance Organisation

At the end of 2014, we caught up with Radha, VP of Finance for Avnet Technology Solutions to get an update of how TS Asia Pacific performed across the year and the strategies priorities for finance in 2015.

Phenomenal Fiscal Year 2014 for Avnet

Radha highlighted that FY14 was another strong performance year for Avnet Inc, as revenue grew to a record $27.5b, an 8 per cent year-on-year improvement. Operating income came in $931 million, indicating growth of about 15.8%. He further pointed out that diluted earnings per share saw a 16.8 per cent year-on-year growth to $4.24. Altogether, revenue growth, expanded operating income, and earnings per share (EPS) improvement made FY14 a “phenomenal” year for Avnet.

Historic Highs for Avnet Technology Solutions, Asia Pacific

According to Radha, significant progress was made in FY14 in its business model as well as in its financial performance. He shared that historic highs were achieved in Avnet TS APAC’s revenue per quarter and operating income per quarter. Despite the tight ongoing situation in China and India, Radha pointed out that the company had managed their working capital well, further stating that Avnet was going ahead with a much stronger business model and balance sheet into FY15. He also emphasized the disciplined cost management undertaken by the company across its business units as a key contributor to Avnet’s strong performance in FY14.

Fiscal Year 2015 Finance initiatives

Going forward, Radha explained that a key initiative for Avnet’s finance team in FY15 would be to create a clear linkage between the business strategic initiatives driven by the businesses, and the financial measures and outcomes from those initiatives. Secondly, Avnet’s finance teams will also continue to focus on cash flow management, to ensure that such efforts, along with working capital management, would continue to generate significant and positive cash from their operations.

The third area of focus is to ensure that the finance team is fully involved in the dialogue and decisions leading to M&As as well as divestment, thus making sure that that the company can fully realize the benefits derivable from M&A activities.

In the area of talent management, Radha noted that Avnet was, on a global scale, placing emphasis in creating a quality finance organisation by providing opportunities for talented employees to move between business units. The company would launch talent bench strength as well, allowing it to address market opportunities and support its future growth.

Fundamental Building Blocks of Value Added Business Analysis

When it comes down to conducting business analysis in order to identify challenges and generate solutions, data integrity continued to be the foundation for any meaningful analysis. Every organisation needs to have one version of the truth, in order for the finance team’s analysis to be understood clearly.

On the subject of line card expansion, Radha highlighted that Avnet, which carries many OEM products, intends to stay invested on those products. It would therefore be prudent that the company knows the kinds of returns expected on those investments on a consistent basis, and for Avnet to measure those considered important or relevant for businesses in helping them achieve their business objectives.

Being a technology distribution company, Radha said that Avnet saw its margins to be under constant pressure. In that regard, he stressed the necessity for analytical work performed by the finance department to be meaningful, and provide value-add to the business, as well as to keep track of the amount of resources invested in each line card.

Tool & Innovations in the Finance Organisation

In the recent budgeting cycle for FY15, Radha shared how Avnet has adopted the BW tool for budgeting worldwide. The implementation subsequently shortened the accounting cycle, as well as long-term planning. In addition, Avnet has also introduced a module to the ERP system that helps with account receivable management, as well as a tool that automates accounts reconciliation process, which is expected to improve visibility and quality of a balance sheet, along with a faster addressing of outstanding issues.  Company-wide, Avnet has adopted HANA to improve its business analytics reporting, the speed and quality of analytics and a faster close cycle in a manner that would help the business meet its goals.

All of these implementations are expected to improve the efficiency of the accounts closing process, and positively impact profit.

In the next conversation, Radha will talk about the business partnership between the CEO and the CFO. Stay tuned!

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This post was written by melinda on February 10, 2015

William Chu Delivers FY2014 Highlights and Sets Business Priorities for FY2015

FY2014: Significant improvements amid challenges

We recently caught up with William Chu, Regional President, Avnet Technology Solutions Asia Pacific. The executive talked about the latest and greatest at Avnet William happily shared the news that the company had made tremendous progress during the fiscal year 2014 ,with notable accomplishments including improved quality of revenue and revenue growth, six consecutive quarters year on year performance improvement, improved operating performance of business business unit and increased value to the market place.

On the subject of Avnet’s footprint expansion in the region, Chu said that Avnet continues to evaluate M&A opportunities that fit Avnet’s strategies but remains prudent with decisions on where the company put its investment. Avnet has grown its footprint in the Asia Pacific region with acquisitions of companies like Azure in Singapore and Malaysia, OnTrack Solutions in India, Sunshine in Vietnam and PT Datamation in Indonesia. Chu said that Avnet is now moving into another stage whereby it is investing in new strategic areas such as cloud, big data and security and networking.

Strategic Priorities for 2015

Going forward the current fiscal year 2015, William elaborated on Avnet’s strategic priorities for FY2015.

Firstly, William highlighted the importance of achieving organic growth in new segments. Currently there are several growth areas, including cloud, security and networking solutions, services and linecard expansion into the global markets.

Secondly, Avnet’s regional president highlighted the importance of delivering better products and services in the existing segments, which can be achieved through collaborations with more channel partners and improving Avnet’s resold services.

Last but not least, Chu said Avnet plans to improve its productivity in the coming year. There have been continuous efforts from the corporate to help improve efficiency; for instance, Avnet currently has implemented the Supply Chain Operations Reference model (SCOR) which measures the efficiency of delivery of each order, which would in turn help optimize the company’s go-to-market and fulfilment process. In addition, the company also looks to invest in better IT so as to improve customer services.

To meet these objectives, William emphasized the importance of having engaged and motivated employees. Avnet recently launched its Employee Opinion Survey which collects feedback from the employees and provides a blueprint for better employee engagement. Avnet Asia Pacific has also started offering their top performers with incentive trips. Lastly, Avnet is also working together with the suppliers to provide sales and technical training as part of the enablement program, so its employees can deliver better services with confidence.

To receive more Avnet news, follow us on Twitter @AvnetTSAPAC, or our Youtube channel https://www.youtube.com/channel/UC3g4wkeAE147_V6AGp1WhWg.

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This post was written by melinda on November 28, 2014

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Avnet – SAP Supplier Relationship on Full Force Globally and in Asia Pacific

  • SAP’s big data and analytics offering is a good fit for Avnet’s server and storage portfolio
  • Avnet’s expertise and strong business partner network in the Asia Pacific market gives SAP robust access to mid-market space

In September last year, Avnet Technology Solutions, Asia Pacific became a distributor of SAP’s full portfolio of analytics, enterprise mobility, database and technology solutions.  The strategic supplier relationship spans three main geographies namely ASEAN, which includes Singapore, Malaysia, Indonesia, Thailand and Vietnam, mainland China and India.

In the following video Avnet senior executives Philip Whyte, Vice President, Global Supplier Business Development, and Michael Costigan, Vice President, Marketing and Business Innovation who were in Singapore recently for an SAP business review recounted how the SAP relationship started, what has been accomplished in the twelve months post Avnet’s appointment, and the tremendous opportunities that both Avnet and SAP see in the market as big data and analytics drive technology spend in the APAC region and  internationally.

Philip narrated how Avnet and SAP established a strong foundation by doing a comprehensive due diligence and several in-depth strategy sessions, which resulted in them realizing the two companies had very good adjacencies between SAP’s big data and analytics offering and Avnet’s traditional server and storage business.  With Avnet’s deep expertise in technology solutions distribution, it was easy to identify that big data and analytics was becoming a critical piece of technology in the market.  Michael Costigan underscored how SAP’s offering complemented Avnet’s existing infrastructure relationships with IBM, Hewlett Packard and Oracle and how Avnet’s strong APAC business partner network offers a very robust go-to market in the mid-market space especially in ASEAN, mainland China and India.

Past twelve months, Philip and Michael highlighted that the Avnet and SAP teams will form greater synergies and conduct regular meetings like quarterly business reviews to constantly assess performance, identify areas for fine-tuning strategies as well as map new opportunities for the coming quarters.

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This post was written by melinda on November 3, 2014

Microprocessor Trends: Greater Performance in Smaller Packages

Written by: Jaideep Malhotra, Senior Vice President of Avnet Global Computing Components. Connect with him on LinkedIn.

In the age of convergence between PCs and tablets, mobility and low power have become important metrics in judging a processor’s value.

With the growing trends of green computing, BYOD and teleworking, form factors are shrinking, while expectations of battery life are increasing. Today’s processors need to deliver robust performance across desktop-bound and mobile platforms with an ever-decreasing power envelope.

At the same time, workloads between PCs and mobile devices are increasingly similar, with compute, gaming, imaging and video tasks demanded from both mobile and desktop machines.

Adobe’s Digital Index shows a 300 percent increase in video views from mobile devices in 2012, while PCs saw a 40 percent increase that cemented their lead as media consumption platforms. Additionally, in the enterprise, big data analytics is placing new demands on the processor, and platforms like Hadoop can benefit greatly from GPU acceleration.

As a result, the Central Processing Unit (CPU) and Graphics Processing Unit (GPU) are becoming increasingly intertwined. As I discussed in a recent interview, microprocessors are trending toward Accelerated Processing Units (APUs)—processors that combine CPU and GPU. 2014 will see the introduction of APUs with Heterogeneous System Architecture (HSA), an improved processor design that brings out the capabilities of different programmable compute elements, including the CPU and GPU, and makes them work together seamlessly to improve overall performance.

Impact on Asia

In Asia, these trends will affect a number of markets, catalyzing mobility adoption and lowering adoption costs for new technology.

Singapore has been described as an indicator of mobile trends and enjoys high cloud adoption. The growing role of tablets in collaborative design projects, document editing and project workspaces is driving demand for better performance from mobile processors. According to a Forrester report, tablets are expected to triple in sales by 2017 and reach majority status in Singapore and South Korea.

There are a number of growing markets in Asia as well. APUs are lowering the cost of ownership of a PC by negating the need for a discrete graphics card for computer-assisted design, digital content creation or multi-monitor setups. With smaller form factors, they are also addressing space constraints in workspaces. Therefore, despite the mature market, there is still untapped demand for PCs.

Industry Applications

There has also been a shift toward GPU-based computing in the enterprise. Project Sumatra aims to enable Java developers to tap into the parallel processing power of the GPU to improve the performance of Java applications. IBM, for instance, has demonstrated that GPU-accelerated Java can boost the speed of data searching by 48 times—an application highly relevant to the growing big data industry.

There is also OpenCL, an open standard for writing programs that utilize CPUs, GPUs and other processors. OpenCL is supported by projects like clMath, a set of OpenCL libraries designed to harness APUs and GPUs. Industries that demand high amounts of parallel computing power, like advanced imaging, cryptography and bioinformatics, can take advantage of OpenCL to gain greater performance from their hardware.

Migration Challenges

IT migration, whether from old platforms to new APU-powered desktops or mobile devices, or to new infrastructure where none existed, or simply accounting for BYOD, requires strategic oversight. Security and configuration are necessary to ensure smooth integration with existing infrastructure while insulating the organization from security threats. IT governance and processing services also have a role in facilitating the transfer of sensitive data, especially to mobile devices over wireless connections. Finally, lifecycle management processes should be in place to minimize the risk of downtime due to devices requiring maintenance or replacement.

Preparing for the Future

We at Avnet expect to see demand for microprocessors from multiple segments as the Asian market grows. BYOD, teleworking and green IT are set to grow in 2014. Businesses will continue to be on the lookout for better performance and price-to-performance ratio, while major chipmakers are pushing the boundaries of size and power consumption as mobile computing gains ubiquity.

As companies are increasingly pressed to adopt new technologies, management needs to adopt a systematic, calculated approach toward integrating them into existing infrastructure. To ensure a consistent IT experience across geographically dispersed business units, companies should work with solutions distributors, which possess the expertise and global scale to develop and deliver high-value solutions that combine leading services, software and hardware.

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This post was written by melinda on January 14, 2014

A Conversation with VP of Finance at Avnet Technology Solutions

V. Radhakrishnan was appointed Vice President of Finance at Avnet Technology Solutions, Asia Pacific towards the end of 2012. After months into his new role, we finally had a chance to catch up with the courteous and eloquent Finance VP in the cozy, softly-lit Avnet meeting room.

Having met each other a few months before in his new office for a short introduction, Radha is warm and chatty this time. He talked excitedly about the new role at Avnet TS Asia and some achievements he wished to see happen in the future for both the Finance team and Avnet TS as a whole. Leading a team of over 130 finance and accounting employees, Radha is responsible for providing leadership advice, and financial and fiduciary consultation on Avnet TS’s major business initiatives. Radha envisions building a world-class finance organization with competent employees equipped with the right skill set, standardizing processes, adopting technologies in transaction processing, and delivering high-quality finance support in a cost-effective manner.

Previously, Radha held various managerial positions in Finance including MNCs like Sun Micro and Dimension Data. Radha expressed that he had a very smooth transition and adapted to the business life in Avnet quickly thanks to the company’s upright corporate philosophies like respect for individual, high standards in terms of code of business conduct, advocacy of ethical behavior, compliance to laws and regulations, and friendly working environment, which are very similar to those of his previous companies.

Commenting on the macroeconomic landscape, Radha said companies are operating under uncertain economies where things change rapidly. As America is showing signs of recovery, Europe continues to struggle with sluggish economy. Having spent around two decades with IT companies, Radha shared his perspectives on how companies can effectively respond to current economic challenges and market trends. He said it’s very crucial for companies to stay nimble, always expect the unexpected and be prepared to manage uncertainties. Avnet has a yearly budget that’s split and measure on a quarterly basis. The business team and finance team work closely to deliver these figures and achieve objectives in terms of revenue or the operating profit margin for the company. In the long term, from a finance point of view, Avnet wants to build a world-class finance organization that adopts technologies, shared services and standardization, and is able to provide financial advantage to the business.

Radha shared with us that the Value-Based Management Principle continues to guide the company, with a focus on consolidation and profitable growth this year. Avnet TS Asia has made a number of acquisitions in the past years and the current plan is to leverage on the benefits of the acquisitions, be it marketing positioning, cost synergies, future strategic fit or other similar aspects. Radha expressed his aspirations to continue working on achieving efficiency and effectiveness and focusing on Solution Distribution to answer future business problems.

Recently Avnet announced its Q3-FY13 earning results and Avnet TS Asia posted positive growth despite the challenging economic times. Radha attributed the result to good geographic coverage, various acquisitions the company has made across the region as well as the strong network of resellers in Asia Pacific, providing capabilities for the company to enter new markets. Talking about the future for Avnet Technology Solutions in Asia, Radha showed confidence in the region: “Asia will continue to grow faster than global average.” As Avnet is well-positioned in the market and has good relationships with regional partners, he is looking forward to more growth in the region and the regional operations contributing more to the global revenue. For the finance team, Radha is committed to focus on continued improvement, adoption of new technologies, providing competitive shared services to business in order to aid the success of Avnet Technology Solution in Asia Pacific.

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This post was written by melinda on August 13, 2013