Eugene Nikolaichuk, the Chief Financial Officer of the TECHIIA technology holding, in the interview to the TOP-100 magazine told about why it is important to take care of partners and "run" twice as fast.
TECHIIA was created as a holding in 2019. It unites more than 10 businesses and projects in different fields, including IT, esports, and development, with jurisdictions in different countries, with investment and equity capital. At the beginning of 2021, the holding companies employ more than 1,000 people.
What trends are currently affecting your industry the most? How does the company respond to such challenges?
The first is the trend of increasing transparency in doing business, which affects banking and tax legislation. It gets better, but it gets more complicated. Supervisory authorities carefully monitor the financial flow between jurisdictions. Our company operates in the USA and Europe, so we need to constantly study local regulations. It is important to do everything right to preserve both funds and reputation.
The second trend is the fast pace of our business. During expansion, speed is more important than emasculated processes. To keep this pace, we reduce the internal bureaucracy, and in order not to do money burning, we use the internal reserve.
For example, in February, three newbiz projects came into consideration. Some companies in such cases immediately hire more staff, but we distribute tasks within the holding in the first place, we check the idea for viability, analyze the business logic, do the math, and assess. Once we understand that the project will come to life, we single it out. It will have its systems and functions, its legal team, HR, a large operating unit, its CEO.
You cannot hesitate, otherwise, the market share will be taken, the technology will lag behind, and the best specialists will go to a more nimble competitor. Therefore, we do it just like Lewis Carroll wrote: “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”
Tell us about the most significant events in your company from your, the Chief Finance Officer’s, point of view.
The very merger of Oleg Krot’ and Yura Lazebnikov’s businesses into the holding became a significant event. We needed to streamline the operation of projects from various areas, coordinate their financial systems for easy management. But at the same time, we have retained the autonomy of each company.
As for the most recent events, I would name a new growth stage of the holding. For the first time in TECHIIA’s history, we have a consolidated budget. Each company agreed on its business model for 2021, and one of our companies WePlay Esports showed crazy growth in financial indicators, despite the last year’s pandemic.
What reforms have taken place in the company in terms of the financial department workflow arrangement? How has this affected the company's economy?
We have launched the management accounting system so that the data is consolidated in the management company. Before that, all businesses were operating by their standards. Unification will make life easier for all employees, and the holding will optimize costs.
We also created an investment committee that evaluates business cases. Previously, new businesses were born from the holding founders’ ideas, and now, when TECHIIA and Managing Partners have become recognizable, entrepreneurs from outside offer their ideas, and we test them.
We implement internal audit and due diligence to understand what can be improved, how we can be of interest to an external investor.
We also made some simple transformations. We started to involve more external consulting in local jurisdictions. However, collisions may take place, as when two local consultants say opposite things. But, the final decision is on us.
To summarize, we ran fast, and now we have equipped ourselves with the right shoes and outfit, and are ready to run even faster.
What anti-crisis programs did the financial department implement?
We constantly optimize costs, but quarantine and instability just pushed us to specific local actions. We negotiated with all landlords and SaaS solution providers and consequently received discounts or credit vacations. If a service provider wants to stay with a client after the pandemic, they will go the extra mile. If not, there is a high probability that the business will not survive the quarantine, and in that case, nobody will win.
We did the same with our clients. For example, our company Enestech makes a cloud-based solution for managing computer clubs and esports arenas. During the lockdown, when the clubs were closed, the company did not charge customers for subscriptions. And it also introduced a new monetization model for some countries, as freeware, but with ads.
What is TECHIIA investing in today and why?
Mainly in two directions: newbiz and product portfolios of current holding enterprises, which are concentrated around esports, IT solutions, their development, and sale. We believe in the prospects of esports, so we invest a lot of resources in it.
For example, last year WePlay Esports invested in Organization.GG esports company. We have become strong enough to attract partners who know how to do something better than we do. We buy expertise, knowledge, and best practices that fit into the WePlay Esports ecosystem perfectly. The startup team is also profitable, it gets access to the holding's intellectual machine, which means it can provide great value and benefit to the market. Moreover, the partner's team retains independence in decision-making.
Our investment budget focuses exactly on such cases. Many can predict the market, conversion, acquisition price, monetization. Another thing is to be able to consider the expertise that you can combine with something of your own, connect partners and, get not 2 from 1 + 1, but 4 and even more. This is one of the unique abilities of TECHIIA and its founders.
What is the most profitable way to keep corporate finances?
We are finance managers, we have a traditional conservative recipe ‒ to reconsider plans and be precise in spending.
For example, we switched to rolling forecasts, we revise our five-year models every quarter. The financial model is required by shareholders, CEOs, financial teams as a reflection of what the business must do within each department in terms of money. This is a kind of tool for both control and foresight that the business is going the right way. It makes no sense to make a once-and-for-all plan, and then say: "Oh, what a pity that it didn't work out!"
How does your financial department work, and what are the rules for maintaining performance today?
We work in the office as usual. The pandemic is simply an external factor that has not affected our effectiveness. As before, we select people for our team based on values. Their involvement and initiative are important, whether they work remotely or not. The main thing is that the person does care, that he/she does not hide in the corners, but willing to take any task.
Everyone does a little more than the job description requires. It is always an internal contribution to a common goal. Probably, this drive and the understanding that your work is important are now more crucial than ever.
What skills are in demand for financial managers today, given remote work and a non-economic crisis?
I would not correlate skills with the crisis only. My task is not only to implement processes and help owners in financial decision-making but also to unleash our team’s potential. And I always want to see the result. I expect the team to know what is behind each number and what the financial chain of each process is.
I need to protect the team from business chaos and create conditions so that they can show their talents and apply them at the right moment in the right direction with the right skill. And sometimes I just need to let them do their work.
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