At Lenovo, finance transformation isn't just part of Dennis Culin's job -- it is his job. Business Finance editor in chief Jack Sweeney speaks with Lenovo's director of finance transformation about the computer maker's yen for transformation and why finance is front and center.

BF: A lot of finance departments talk about finance transformation, but you don't always see people dedicated to it. What prepared you for the role you now play at Lenovo?

Culin: When I was with IBM -- a large company, with multiple divisions, with new mergers, new products, and everything happening all of the time -- I was part of a team that would be called on anytime there was a change to corporate systems. My role was to make sure that whatever was done to modify the systems or change the processes would still be executable within the Personal Computer Division (PCD). And also, when we made changes, that we didn't do anything to damage the overall corporate environment or some other division within.

As a consequence, throughout probably 10 to 15 years prior to the merger with Lenovo, I had been working pretty much as a troubleshooter for the controller. Anytime there was a new business opportunity or anytime there was a new business change, I represented PCD on a corporate task force designed to make that change happen. This kind of gave me some background, so when it came time to do the merger with Lenovo and get the things that we needed to do with them done, I understood that this would allow me to build on that experience. To me, this was a chance in a lifetime.

BF: What made the challenges that you faced at Lenovo different from or more exciting than those faced by other multinationals?

Culin: Well, at the root of everything -- really, nothing. I mean, we've all got to meet the same accounting standards, we've got to follow the same rules ... these things are all the same. At the same time, the big difference was that we had two very strong companies, Lenovo from China, which was number one in its marketplace, and IBM's Personal Computer Division, an organization spread across the world. What was really different about this, in my mind, compared to most other such situations, was the opportunity to start over, the opportunity to start from scratch.

BF: You've had to invent a finance department?

Culin: Yes. We have had to invent everything. Lenovo didn't have the bandwidth and the system infrastructure to support the whole world. So from a system point of view, we had to start from scratch. From an organizational point of view, in a lot of cases we did as well. Because what ended up happening was that the corporate functions like accounting, legal -- those types of things -- stayed with IBM because IBM needed them. And then, of course, Lenovo didn't have accountants in Malaysia for example, so we had to go hire and create those organizations with both accounting and business transformation. And some of our finance teams, our tax teams, our credit management teams, they all had to be hired anew and started from scratch. So the opportunity to actually get to do that and build that organization has been a lot of fun as well.

BF: So where do you begin? How do you form a global workforce from the ground up?

Culin: We believe in world sourcing. And that means simply that it doesn't matter where the people live. The talent can be anywhere. Our intent is to find the best person regardless of where they are in the world. So it's amazing, you can find a wonderful accountant in, say, Vietnam, for instance, who can really make a contribution to the business.

BF: I would think that Lenovo is far ahead of other companies in its weight class as far as sourcing talent in this way goes ...

Culin: A lot of companies want to do it, but we had to do it. I mean, if you think about what we did when we separated from IBM, just look at the simple accounting function. We had maybe 10 to 20 people in international accounting, and then we had another 100 or so in the Lenovo China organization. We had to build the entire global organization, and we did it in geographic centers of excellence. So we've got an Americas team and an Asia-Pacific team and a European team. And we had to go hire anew in those three centers in order to support our business from an accounting point of view. So we weren't stuck with people whom we had to retrain and we didn't have to change the way people did things -- we literally got to start anew.

BF: When it comes to finance transformation, what advantages does Lenovo enjoy in light of the fact that it is building something nearly from the ground up? No legacy systems, we would guess ...

Culin: What we've done is chosen some specific software packages that we want to use to get the basics done, with SAP as our overall logistics and Sabrix as our tax engine. And using these as native as possible and really differentiating our business where it matters, in our products and our supply chain, and how we serve our customers.

BF: Technology is clearly a big part of Lenovo's finance transformation strategy. Where does the finance transformation unit fit within the overall organization?

Culin: What we've done is established three legs within the CIO's shop. The actual IT team that's responsible for running, maintaining the systems, etc. The actual business transformation team that's responsible for the designs, processes, and how the system supports the business. And then the project management office, which supports and manages the sheer volume of projects that we're trying to get accomplished in our time frame, so that we can get our system up and running and our business up and running on our system infrastructure.

So this three-legged stool is how the CIO's shop is trying to get all of the things done that need to be done to support our business. And then within this, breaking down the business transformation leg of this stool, if you will, there are people like myself dedicated to supporting various functions, to bring them along to make sure that their business requirements are met. But also, at the same time, they want to start to transform how they do things to make it more seamless, better, to drive the changes that we feel we need.

A lot of times I'll get the requirements, and rather than telling me necessarily what they want, they tell me how they want it done. My job is to make sure that I understand fully what they want and then drive it into a seamless process, with my peers doing the same thing for the other functions, so that we can have a good end process.

BF: As a global company, we would imagine that you are out in front as far as adopting International Financial Reporting Standards goes ...

Culin: We are. What we're doing is setting up our systems under the IFRS rules. Meanwhile, a lot of multinationals, and even IBM, that grew up as American companies now have all of their infrastructure and all of their system design based on the American rules and GAAP. What we're doing is setting up our system on international financial rules and then modifying to the GAAP as required. In the long run, we believe that this will mean that we'll have to do less modification when we deploy our system into a particular country.

We started out with our system deploying into China. We went China, India, Canada. Now we have just finished a complete deployment in Asia-Pacific. Next, we'll be doing Mexico and Poland, our last two manufacturing countries. Then we've got to deploy to the rest of the world where we do business. Each time, the biggest challenge as we go into a country is the localization requirement. You need accounting reporting, statutory reporting, and tax rules. IFRS helps us to some extent because a lot of the countries at least follow that, or use that as their base.

For more watch this video interview [1] with Dennis Culin.