Every financial leader has a unique perspective that can benefit the business, says Tom Brandt, senior vice president and chief financial officer of TeleCommunication Systems (TCS). When Brandt first began working for TCS, he thought he’d help the company through a bumpy turnaround period, and then be on his way toward something more permanent. That was eighteen years ago.
“TCS is an entrepreneurial enterprise still run by its founder after twenty-eight years, engaged in highly relevant communications technology,” Brandt says. “I work with people with technical talent and integrity that I respect.” The company provides solutions to wireless and Internet telephony network operators, secure wireless military networks, other government business, and now even mobile emergency medicine. “The business does meaningful work,” Brandt says. “We’ve delivered ground terminals for satellite and other wireless communications in Afghanistan and Iraq; we’re currently developing mesh network solutions that are usable by public safety first responders and homeland security; we’ve created a mobile medicine app, and our number-one business is delivering 911 calls to public safety answering points. It’s been a good, long ride, but I would hate to miss what comes next.”
Brandt began his career at PricewaterhouseCoopers as a certified public accountant. Before joining TCS, he had stints as a controller and CFO at Easco Corporation, a small Fortune 500 conglomerate in his hometown of Baltimore; as CFO of a USX leveraged buyout; and as CFO of Internet service provider Digex for its 1996 initial public offering. The roles brought him a breadth of experience, from New York Stock Exchange compliance to a bankruptcy, and helped him develop a perspective on how a financial leader should contribute to the executive team.
“My role is a bridge between the capital markets and the company’s leadership,” Brandt says, explaining that a financial officer should first and foremost be a good communicator, given that the financial reporting is the common thread among the individuals who make the decisions that guide the business. “Our team’s report card is expressed in the financial statements, relative to expectations of lenders and equity investors, and my proficiency is using that language in text and tables to support decisions,” he says. “Variants of that information enable goal-setting, forecasting, and budgeting, which then serve as tools for gauging progress and overcoming obstacles.”
The challenges of the role are numerous. Brandt says regulatory compliance has become much more costly than it was earlier in his career, with auditors very concerned about the Public Company Accounting Oversight Board, created by the Sarbanes-Oxley Act to oversee public companies’ CPA firms. “Containing compliance cost to preserve resources for the benefit of investors has become more difficult,” he says. “Coordinating our company’s geographically dispersed cohort of financial personnel is also a continuous challenge,” says Brandt, “as it entails responding to both changes in the operations of the business and available improvements in technology.”
That said, the biggest challenges for Brandt have also brought the most rewards, such as those that have involved adapting the capital structure of the company. “Not everything in a technology business goes according to plan A,” he says. “For example, if you happen to have some debt maturing or some other deadline while a part of the business has gone south, the CFO and team are compelled to crisply communicate with capital sources to keep the fuel tank filled on fair terms. Pulling that off feels gratifying, and it’s something we’ve had to do a few times in the life of the company.”
“I’ve been blessed with a very strong team whose planning, skill, and patience have helped us use technology to be more efficient.”
Beyond compliance and capital-raising, Brandt says he’s proud of the steady improvement in TCS’s enterprise resource planning tools for project planning, forecasting, and managing an evolving mix of business, that he feels has more than kept pace with the company’s peers. “I certainly can’t take credit for it alone,” he says, “I’ve been blessed with a very strong team whose planning, skill, and patience have helped us use technology to be more efficient.”
Brandt also remarks that survival is becoming a differentiator of sorts among CFOs in the technology world. “There aren’t many guys who are in this kind of job this long, because tech businesses are sold or change, and CEOs and CFOs part ways,” he says. Brandt feels he’s still around in part because of his foundation of prior experience and education, including an MBA from the Wharton School of Business at the University of Pennsylvania, gained midway through his career via the executive program. He also notes that a CFO’s staying power depends on trusting the integrity of colleagues, particularly the CEO. Otherwise, the only choice is to move on. “We’re a tech company, and we’ve taken some business chances, but through ups and downs, everyone here plays it straight,” he says.
The company has progressed a long way in eighteen years. Today it has more than 1,000 employees, approaches $400 million in annual revenues, and is a member of the Russell 2000 Index. Looking ahead, Brandt would like to see Wall Street respect the value of the company at the level that he believes is merited by the technology it has accumulated, as well as its position for future opportunities. “We didn’t own a patent when I came, and now we own more than 350,” he says, noting that the patents are one indicator of the talent of TCS’s people, and the fact that the underlying technology has converged across deliverables so that they are more promising than ever before. “Part of my job is, along with the CEO, to communicate to Wall Street that there’s more value here than our current share price indicates,” he says.