The Future of Digital Transformation in the Finance Function

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[Transcript]

Michelle: Hello and welcome to The Future of Digital Transformation in the Finance Function: Seeing The Wood and The Trees, presented by FinancialForce. Thank you for joining us today.

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Now, it’s FEI’s pleasure to introduce Andy Campbell.

Andy?

Andy Campbell: Michelle, thank you very much, indeed. Welcome to this webinar: Seeing The Wood and The Trees. Delighted to be able to host and moderate this event today. Most importantly, to involve Ida Pai, the CFO at Deeproot.

Just a bit before we get into the nitty-gritty. Personally, as a role of Evangelist at FinancialForce, I’ve been in the technology space for about 30-odd years, as you can tell by my complete lack of hair. I think the amount of change we’re seeing in the industry at the moment is like we’ve never seen before. The impact of the pandemic has been, obviously, profound and people are now thinking about how and why they need to change their businesses, and what they need to do in response to the challenges that are in this space.

So, what that’s meaning in terms of change, in terms of speed, it’s been like nothing we’ve ever seen before. So, fascinating topic to be talking about today, and I’m absolutely delighted to be here with Ida.

Just to start off the process. Ida, could you tell us something? Not about the business, but something about you. Something about who Ida is, your sort of personal journey, where you are, and what floats your boat?

Ida Pai: Yeah. Again, thanks for this great opportunity. I’m glad to be here having this great opportunity and sharing a little bit of my journey and who I am.

So, first of all, I actually live in San Francisco, a city that I can ever stay away from. So, I have probably 10+ years in the AEC industry, always dealing with the architecture, engineering, construction world. With that, I have probably over 20 years in the corporate finance world. So, I joined Deeproot about seven years ago, and it’s quite a fascinating journey for me. In terms of how a small business can grow so fast, and dealing with all the challenges and opportunities, and how - like Andy mentioned earlier - the system can actually help us continue to improve and grow our business. So, those are all the areas that I’m happy to share a little bit more in detail coming up. But I’m definitely excited to be here.

Andy Campbell: That’s super. Thank you so much for joining us. That’s a picture of me at the bottom; that was pre-lockdown. You can tell I’ve put on about 20 pounds and I’ve grown a lockdown beard in the meantime.

So, Ida’s got a great deal of experience, as we heard. Please do click on the Q&A buttons. We’ll try and engage as many people as we can and try and make this an interesting dialogue for you all as we go through.

Here’s the agenda that we’re going to be talking through over the next 45-50 minutes or so. We’ll talk about the impact of what’s happened in the last 18 months. We can’t get away from it, and it very much does set an agenda for people moving forward. We’ll think about what that means for those people working in the finance function. How have they had to respond, and what do we think that’s going to mean for them moving forward?

We have to talk about digital transformation. Hopefully the time will come soon where we don’t have to use the word “digital” at all, as though “digital” won’t be a surprise. It won’t be any different, it will just be part of what change actually involves. But the transformation that Deeproot have been through over the past few years or so has been really fascinating, and it would be great to understand that. Part of that is to understand, as Ida has already alluded to, the value of having integrated systems and technology to underpin everything that goes on in running that sort of business.

So, that’s the agenda we’re going to be going through. Start at the ten, though, Ida. DeepRoot, fascinating organization. Really, really interesting.

Could you tell us something about who you are, what you do, where you do it? It’s a really, really interesting story.

Ida Pai: Yeah. You know, I’m going to say, I think this slide kind of gives a very well [sic] overview of what we do. One thing I want to share is we don’t really do something that’s super high-tech or anything like that. We’re just a little bit back to nature. One of our missions is to make sure that we can bring the forest to your doorstep, if you can imagine that.

I think what DeepRoot really believes in is truly that we really focus on a lot of sustainable practices. What does “sustainable practice” really mean? I mean, you ask. Right? It doesn’t necessarily mean just that it has to be green and we’re saving our carbon footprint, but I think it’s everything that we can think about that’s around and you walk around our life. From that perspective, I want to say DeepRoot is really a big family where all the members truly believe in being sustainable. We make sure that we practice sustainably. We live our lives as minimally as we can.

So, one of the things that I’d like to share with everyone is we are a small but very international company. We’re not just located in the United States, but we also have companies in Canada and in the UK. So, from that perspective, we seem to be huge as a company, but in reality, we are very small. We only have no more than 25 employees overall.

So, we definitely are trying to find the best way for us to make sure that we can sustainably grow the company, and also to make sure that we’re utilizing our resources as much as we can.

So, basically, we produce a couple of different types of products. What it does is it will give more soil, more water, more oxygen to the trees that are sitting either in front of your sidewalk or in the major - or urban - areas.

So, that’s really what we do. We believe in practicing. So, we try to make sure that if we can produce locally, we can source things locally, that’s what we always try to do. We try to transport our goods as little as possible, and really let nature do its job. I think with the human improvements in how our lives are changing so quickly and so rapidly these days, we kind of changed the big environment quite a lot. We try to use as many resources as we can, but not necessarily as actually what we need. So, I think this is really our mission for the company, and hopefully, we can leave a greener earth for our next generations.

Andy Campbell: That’s fantastic. I mean, the whole sustainability agenda is so important, and what you’re doing to contribute to that. The business model that you have is a really interesting one. You talk about doing not re-wilding, but engaging with and the re-greening of concrete jungles.

Could you tell us something about how you do that? Who are your customers, and how do you work with your customers?

Ida Pai: Yeah. I think this is a very interesting area that I’d like to share with everyone. I will say, we have been in business for more than 40 years, and we have our product, and we continue to try to improve and find new products that can do better. One of our products, called Silva Cell, and I’m going to say Silva Cell has probably been around for about anywhere between 20 years or so. But the first 10 years, I’d like to say, I think, as a company, we’ve been doing a lot more of education than to really sell our product. Right? We work very closely with designers and government entities to make sure to really sell the idea to them. To say, “Hey, you know what? We can really bring trees. We can live with trees on the same land, close to each other, and have it really nurture and help with our standard lifestyle.”

So, once our education and our mindset is set, then what happens is we find a lot of designers start to build our product into their design. That’s how we first started off in starting that cycle.

At the end of the day, we actually work very closely with contractors who actually can install our products and also with distributors. So, those are our main two lines of customer-lying. In the finance world, or in the business world, we’d like to say that we really only do business from B2B. We don’t really do it to residentials. But, at the same time, you can find our product on Amazon, and we have distributors who actually sell to a lot of homeowners who purchase our product to help with their yards, sidewalks, anywhere that they can use our system.

Andy Campbell: Yeah. So, you’re not just selling the products that could be used. You’re also selling advisory services, or you’re engaging with architects and designers, and town planners and people like that to think about how can we use these things. What do we need to do to re-green a space and take the best advantage of it for the community good? Does that sound fair?

Ida Pai: Yeah. Absolutely. You know, I think one thing that’s important to mesh in, in terms of services, I think, from a financial officer perspective, I always think okay, if I’m doing something, am I getting revenue? Right? I mean, that must be a big attraction for all the CFOs. But, I have to say, I think from a service perspective, we do sell part of our technical service in terms of helping our contractors to install properly and making sure to deal with all the roadblocks.

Another aspect of our service is it’s more important, and I think that’s the main focus where it connects all the dots in terms of we provide all the customer service. I think you had a great point. Where we deal with the government entity, where we deal with architecture from the designers, the engineers, we’re not just there to sell the idea, but also to hear from their perspective. Right? What works? What doesn’t work? That really helps us to work together, to bring a more green planet to our earth, in a way.

So, we get a lot of great help from them, but, at the same time, we also want to make sure that we can try to make their lives a little bit easier, to help our customers to be more cost-effective and efficient. So, those are all the collaborative [sic] that we have. Not just with our own company, but really with all of our partners to make sure that we make it as a whole.

Andy Campbell: Yeah. I love that. It’s not just a product company, it’s around the service that goes with it to make everything. You used the term collaboration which is very much the modern community approach of things.

Thank you so much for the background of DeepRoot. Could you tell us something about your business plans? What are your strategies? Perhaps, what that means for you to run the finance function within DeepRoot?

Ida Pai: Well, Andy, I wish you’d asked me that two years ago because I’d have a completely different answer. Right? I was going to say, two years ago, I would probably tell you, “Oh, my god. We have a five-year forecast. I expect to grow anywhere between 25-30% every year.” With all honesty, that’s absolutely what that is. But, I have to say, unfortunately, we hit the pandemic.

This is where it’s quite a challenge, I’m going to say. I’m sure we’re not the only company who is experiencing this. For the past 18 months, it has been quite a journey for us. Not all bad, I have to say. I think the challenges that we’re facing definitely opened up a lot of opportunities for us at the same time. So, that piece, I’m going to say I’m actually very excited. I mentioned that we are from a small company, so you can imagine that even with growth, we faced a lot of roadblocks and a lot of challenges, and there are a lot of priorities that we don’t want to push off.

With that, I want to say Covid definitely did us a favor. We’re like, now we have no option but to focus on that.

So, I’m going to make it a little bit more general, I think. For the next five years, we’re really, again, looking into how can we serve our customers better? How can we be able to react to things a lot quicker than before, just because with the pandemic things change every other month, every other week. Status changes all the time. That’s where I want to say, if anything, the pandemic made us to be a little bit more energetic and making sure that we have to be right on top of things more than we ever can, in order for us to be successful.

Andy Campbell: Yeah. Excellent. Well, it’s good to hear that. Interesting to think about that sort of speed and acting, giving you a bit of a kick up the proverbial to have to do things differently. We’ve actually got a quick poll that I’ll move onto now to try and get some feedback to see whether other people have had the same issue.

So, to all those people out there listening, here’s a poll for you. We’ll give you sort of 15 seconds or so.

The question is: How has your business performed over the past 18 months? Has it had an overall negative impact? Have you been stable or just been able to survive? How have you taken the opportunity to grow? Or, lastly, have you, perhaps, responded in a way where you’ve had to change your business model to do something slightly different, and that’s been the way in which you’ve managed to survive in these difficult times?

So, we’ll give you just 20 seconds or so.

What do you think the responses are going to be to this?

Ida Pai: Oh, my god. You know, I think it really depends on the industry. Right? Because, I mean, I think we’re seeing everything all over the place. I’m going to say maybe a little bit more between negative impact and business growth? I don’t know!

Andy Campbell: You’re hedging your bets there. I’m going to go for business growth. I’m actually going to go for business growth.

Ida Pai: Okay!

Andy Campbell: It might just be because I’m a Brit. You know? I’m naturally optimistic at heart, so I’m going to go for business growth. Let’s see what the answer is.

Ida Pai: I love that.

Andy Campbell: Oh, here we go. Here we go.

Ida Pai: Oh, look at that!

Andy Campbell: Yeah! Half of the people are stable. Almost a quarter of organizations have had some negative impact. I’m sure that’s likely to be in specific industries, as you say. There may as well be a geographic dimension. In the UK, we are coming through the Covid pandemic. We can certainly see the green shoots at the other side. It may well be that a lot of those organizations like that will hopefully be seeing things better in the future.

What kind of things did you do during the pandemic? What strategies? We’ve got your answer for that. When you had the kick up the bum, what did you do about it?

Ida Pai: You know, that’s a very good question. I remember, and I’m trying to take my memory back to March of 2020. I guess that’s when the whole thing first started off with. I think, from our business perspective, we kind of heard early on in January about what’s kind of going to happen, what’s going on in China. We’re like, okay, it seems like it’s kind of serious. We’ll probably have to be prepared.

So, actually, as a company, the first thing that we did was to make sure that we can have all of our employees have full access to do business online, and making sure that everybody has the right equipment. This is where I’m going to say if it’s perfectly in terms of technology. Right? Because, I’m going to say, if this pandemic happened 20 years ago, I think our business would be interrupted so much more just because we didn’t have the technology to be in place to handle this.

For us, we were very lucky, I have to say, that in the beginning - maybe in the first couple of months - we were definitely still getting a little scattered, trying to make sure people can actually work properly, have the right space, handling the day-to-day work. But, for our company, we actually were able to be up running fairly quickly. We were able to go back to pretty stable day-to-day operations fairly easily.

With that, I think, in terms of all the things that we experienced, it’s really just trying to stay on top of what’s kind of going on. What are the changes? What are the impacts? I mean, for our business, we also have significant business practices around supply chain, which is quite a unique area, where - if anything - it impacted a lot quicker than the rest of our business operations. So, because of the border shutting down and people were not able to move or travel very easily, supply chain kind of got hit at the very beginning, and also the freight world because people were not really on the road. Cities are shut down.

So, those are different things that we had to really look into. Of course, from my finance perspective, my first thing is, okay, wait. What are we doing with…? Are we going to have collection issues? Are we going to have credit issues? I mean, those are all very realistic situations that we have to figure out. Also, keep intact to make sure that our customers are doing okay. Anywhere from health and safety, really.

So, all of the above. We were really trying to be a little bit more prepared for ourselves.

Andy Campbell: Yeah. I mean, FinancialForce, we don’t sell physical products, obviously. We’re a software provider. But, the issue about sort of cash flow is absolutely critical. We used to run cash flow forecasts about once a month, something along those lines. But, in March 2020, we were doing them sub-daily. So, every time there was a big customer transaction coming in, we were thinking, “What’s the impact that’s going to be on our cash?” You know? We had to be able to respond with that speed in order to be able to address things.

Interesting there.

You might be interested in this. This is some research that’s done by an organization called SPI that we were involved in. This is only looking at one subset. So, this is only looking at the software as a service software industry. So, this is only the same industry. There’s no differences there in terms of industry. But the difference between those people that have done well in post-Covid and those people who haven’t done well is absolutely huge. If you look at the one at the bottom, EBITDA, the difference between those software companies that haven’t performed - that had a -4% impact on EBITDA - but the better organizations are actually having a hugely positive contribution.

If you look at some of the numbers in the middle, the one about billable utilization. For a services organization, utilization is kind of key. For those joined up businesses that are doing it well, up in the 80s. Whereas, down in those more fragmented organizations that weren’t doing quite so well, down in the 53-54%.

So, lots of issues there. So, it’s not just about Covid. It’s about the way in which you respond to it and the tools you’ve got to help that, which is kind of important, I think.

So, let’s move on to another poll. This is looking in a more positive perspective. Yeah?

So, how do we see our businesses performing over the next 18 months or so?

So, again, we give you 20 seconds or so. What are the options? Further negative impact. Just going to be stable again (that was about 48% last time, remember?). Some growth, less than 5%. Or are you going to go great gains? You’re going to be more than 5% for annual growth.

So, give yourself a vote on that. 10 seconds. Right?

Ida, what do you reckon? What’s it going to be this time?

Ida Pai: I think I’m going to go with stable this time.

Andy Campbell: You’re going to go with stable this time. So, you’re on 48% last time on stable. Yeah? Should we see where we are on this one? Let’s have a little look. I’m going to go with less than 5% growth.

Ida Pai: Oh! You’re right on!

Andy Campbell: See? This is good. So, we’ve had the negative impact was 27%. It’s gone down to 10%, so that’s really positive that a lot of organizations see that they’re going to be able to change and moving into growth, which is really fantastic.

So, if we’re moving into growth, a question for yourself: What are the business challenges that you see coming forward? You’re going to be one of those growing organizations; what are the business challenges that you think you need to face?

Ida Pai: Yeah. I think this is very interesting with the growth. Again, I think the challenges can be in many different ways… From our perspective, from my business perspective, it’s really to make sure that we can have something a little bit more steady and stable in terms of our partnership. Right? Our supply chain needs to make sure to go a little bit more consistent. The freight world needs to settle a little bit, because the freight world and the borders are going a little bit upside down these days. Of course, I hate to say it, this is one of the main factors that probably none of us really have a good behind: what will happen with Covid? Are we going to have another variant? If we can get a little bit more control and vaccinations are working well, people feel a little bit more stable and things are more controllable from a health perspective, then I think, absolutely. I think growth will go a lot smoother.

But, if not…

Go ahead. Sorry.

Andy Campbell: I was just going to say, so some of the issues around supply chain will be associated with communications, visibility of transactions, and data and information, I presume. Yeah?

Ida Pai: Absolutely. You know, I think if anything that we’ve learned from this whole Covid thing is really to have data and information as quickly as possible. That’s what will make our business successful, because, unfortunately, we can’t follow a three-month, six-month, one-year trend anymore. There aren’t any of those recurring activities. We just need to know what’s really happening, and for the stuff that we’re doing to make sure that it actually, really, transitions through and we’re hitting our goals.

Andy Campbell: Yeah. Cool. Good.

I’ll ask you another question about what that’s going to mean for the finance function. But, before I do that, this is a model that came from the, similarly, Finance Professional [unknown 0:27:38]. It talks about the changing role of the finance function, where - historically - it was the way seen as being the domain of accounting, where people talk in numbers, speak only with finance, speaking with accounting jargon, et cetera. That’s now changing towards being more of a managerial, more consulting, more business-centric, more fluid to the language of business, et cetera, and those kinds of things.

Is this how you see finance function operating within DeepRoot?

Ida Pai: Absolutely. I think I want to say I get a lot of questions from my directors… I won’t say every day, but maybe once a month, and one of the biggest things… I recall myself keep saying this. I keep sharing this to tell them it’s not just about how much money we’re spending. It’s really we’re evaluating our risk. I think that’s where I’m seeing the financial positions are changing more. Besides all the reporting, all the data, all the numbers that we’re seeing, I think I find our finance department is doing a little bit more - or pushing through more - on relying more on the analytics that we can provide, and to really evaluate what the risk is. What are we getting?

I think that’s where I’m really seeing with our business, and with a lot of the finance world, that’s what we’re doing. I feel like the CFO role today is very different compared to before. Right? A lot of the time, people come to me and ask…

I honestly feel, nowadays, like I read more words than numbers. I don’t know what happened! But I really do find that it’s being that partnership to the CEO and really continuing to look at the business overall, and evaluating how we can grow. What are the risks? What are the liabilities that we need to encounter with?

Andy Campbell: Yeah.

What’s your relationship like with sales, for example? Because, typically, there’s been an adversarial relationship between the salespeople who go, “yes, yes, yes,” and the finance people go, “no, no, no.” What’s your relationship like with sales?

Ida Pai: Andy, you’re right on! I think if you asked my sales director, he will probably have a very different perspective than I do!

I have to say, I think… Maybe also because I find it, as a smaller company, those kinds of collaborations can be a little bit more transparent. I’m not going to get into too much stuff yet, but I want to say I think having an ERP system, having FinancialForce, definitely helped all the different departments to connect better and understand. Right? Sometimes, I think our biggest challenges a lot of the time between the departments are they are so specialized, and they’re so focused in their own field. They don’t really look above and beyond sometimes. Right? They don’t really want you to know what’s going on.

I remember, in my previous life, I’d have CEOs telling me, “Ida, the finance people are just not flexible. You guys are just too strict.” Right? “You’re too black and white.” It’s very interesting. I used to tell people, “You don’t want finance people to be flexible. We need to be black and white in order to be compliant.”

But I do think by having data and having the understanding and being able to connect all the dots of your business practice is really what the key is for us to collaborate better. I like even to say we can support better to the sales team and to the operations team, to say, “Hey, I can let you know when we are falling within these parameters. We can definitely have some kind of flexibility, but, at the same time, there are lines that we have to hold. At the end of the day, we’re reaching to the same goal, and we’re going to really help each other achieve what we want to achieve, and we will be able to see a better outcome.”

Andy Campbell: That’s great. I love the point about transparency. I was talking to a CFO the other day. He was being quite candid. He was saying, “I don’t own finance numbers; and the sales director, she doesn’t own the sales numbers. They are business numbers, and they need to be complementary, and they need to be visible for everybody.” Which is exactly what you’re saying.

Fascinating. Great.

Conscious of time. We need to… We’ve got a lot of ground to cover. One of the areas we talked about earlier on was around sort of services and how you’re not just a business company - you’re also a services company. I’d be interested to get a sense of the audience here as well and see whether that is a common feeling for them as well.

So, Poll #3, the question: How important are services to your business? Are they minimal? Are they just stable? You know, we do a little bit here and there, but it’s not core to our business? Is it important? I mean, that might be like 10-15% or so and potentially growing. Or is it absolutely critical to delivery of your business? So, what does it mean for you and your business?

Ida, what do you reckon to this one?

Ida Pai: I will say it’s important and growing.

Andy Campbell: You know what? I was going to say exactly the same.

Ida Pai: Well, I guess, like we said earlier, especially with today’s world, I think we need some kind… Service is going to be a key. I do think that way.

Andy Campbell: Yeah. Yeah.

Look at that. See? We were both right. Business-critical.

So, there’s only 25% of organizations are in the top two. So, 75% of the audience here have services as a growing and critical part of their business. That’s really interesting. I’m not surprised, but that really does reinforce our thinking.

Tell us some more about the role of services in DeepRoot and how important it is to your customer relationships and the like.

Ida Pai: Yeah. I mean, like I said, we do have two lines of service. One, it’s more of the customer service, where we want to serve and we want to support our clients as good and as much as we can. Especially when we deal with a lot of contractors, in order for them to coordinate shipment and making sure that they get the material on time and meeting their deadlines, it’s very crucial for us. You know, and also making sure that we are helping them to get all the paperwork, all the stuff, timely, and making sure that we can continue to push through our internal system. That’s what a lot of our back-office support team do, and we actually get tremendously great feedback from our customers telling us how good we are providing that service, in terms of helping them to be more organized and helping them to meet their deadline in the most effective and efficient way.

We also have another line of service, which is more on the technical side. We have a full technical team who can help our customers troubleshoot and deal with all the roadblocks that they face when they do installations. In terms of what kind of different scenarios that we handle. Even though our product doesn’t seem super high-tech, engineered, but it’s actually very… It’s a very engineered item, I would say. There are very specific ways that you have to install it that you have to make sure that it actually meets the outcome that we’re looking for.

So, you know, I think those are the areas that we will continue to make sure to expand. I think that’s what we’re seeing in the world. We’re no longer just a local or specific territory business focus anymore. We’re really more on the collaborative side.

I can share that a few years ago, I was also in front of a group of audience, and unfortunately, I wasn’t really selling our product, but, more or less, I was more of the highly-paid translator, and I was in Taiwan for a very high profile project. Our first whole seminar, basically, we were talking to a room full of architecture and engineering people for probably anywhere between 50-70 people. To them, they just want to understand the concept. It’s quite new to them. Right? That’s where I think we find we just feel there could be more people to know about our things. There need to be more people who understand the concept. So, I think services is the key. It’s the way, for us, to know how to communicate with people.

Andy Campbell: Yeah. Absolutely. That’s absolutely the key.

We’ve had a couple of questions come in. I’ll pick those up as we go through, but just as a note to the audience now there, if you’ve got any more questions, please drop them in the chat and we’ll pick them up as we go through.

We’ve got to talk about technology and how moving into a more services-centric and being able to deliver all the information you need, you need some form of transformation. We use the term “digital transformation” all the time.

I’ve got to share this quote because I love it. It’s from a guy at MIT Sloan. It talks about digital transformation:

“When digital transformation is done right, it’s like a caterpillar turning into a beautiful butterfly. But when it’s done wrong, all you have is a really fast caterpillar.”

There are so many customers that I engage with. You say, “Are you doing any digital transformation?”

They say, “Yeah!”

You say, “What have you done?”

They say, “Well, we got a new website.” Or you say, “Yeah. We’re really embracing robotics.”

“Oh, yeah? What are you doing?”

“Yeah. We got a chatbot.”

You know? That’s kind of it: those sort of tactical solutions. What this kind of says is that digital transformation is slightly bigger than that. It’s kind of more transformational in its true sense. It impacts a whole organization.

What does digital transformation mean for you in your journey?

Ida Pai: Well, you know, I think this butterfly thing is totally right on the spot. I think it is very true. Right? We need to make sure that we do it right. I think that’s really important for us.

Unfortunately, I’m going to say, I’m used to taking out a journal and writing my T-chart or whatever that I need to do, and, unfortunately, that’s not the way anymore. But I have to say, I do think that it’s a different way of opening up our business and making sure to support the growth of a business is to go the digital way because this is where we can actually move and collect things so much more efficiently and so much faster.

I’m going to say, you have to have a very open mind. It’s quite a change for the finance world. I understand that very much so, but I totally agree. When it’s done right, it will turn into a very beautiful butterfly. For sure.

Andy Campbell: Cool. It makes me think about one of our customers in the UK. It's a professional services company called Methods. Talking with their CFO, and he was saying that they have automated 95% of their business processes within the finance function [unknown 0:40:08]. The impact of that is like 40% reduction on overheads. I mean, the impact! We’re not talking about small beer here. We’re talking about something that truly could be quite significant.

Let’s see what plans are for our audience, what they’re thinking.

So, if we’re talking about systems and we’re talking about a lot of people thinking about growth as we’re coming out of the pandemic. So, how will our systems support those objectives? Are we able to use our existing systems? Are we going to be looking at tactical investments, like sort of [unknown 0:40:44] and things. Or are we going to be looking at things from a more strategic perspective?

It’d be interesting to see how this is answered now compared to, perhaps, a couple of years ago. I think there’s actually going to be a lot more people reviewing where they are, and perhaps looking at a more strategic view of digital.

What are your thoughts, Ida?

Ida Pai: I want to say it’s a significant investment and more strategic initiatives, but I don’t know. We’ll have to see.

Andy Campbell: Let’s see. Let’s see. You feel [crosstalk].

Ida Pai: What was the poll two years ago?

Andy Campbell: I wouldn’t be able to be much more tactical. It would be much more tactical. People were looking for short-term investments, short-term return on investments. They want payback within three… Not that that’s bad. You know,that's absolutely right. But, as you said, your organization is able to move to a mobile workforce or to a work-from-home workforce, you can only do that because of the technology that you’re using to underpin your business. People are realizing that, hold on, I’ve been living with this old stuff for a long time, and frankly, it’s been a bit found wanting.

So, shall we have a look at the answers?

Ida Pai: Ooh.

Andy Campbell: 41% percent of people. 30% of people, yeah. That’s interesting. Yeah. I thought it would be slightly more on the strategic initiatives with the green being about equivalent, but yeah. Yeah. At least only a quarter of organizations really think that they’ll be able to deliver the new kind of economy with the current systems they’ve got and capabilities they’ve got. Cool. There’s a lot of technology companies out there who would be very interested to see these kinds of results, I would have thought.

You are a significant user of both Salesforce and FinancialForce to underpin your business. Could you tell us something about your technology journey?

Ida Pai: Wow. I think this is going to be very interesting. So, I think in order for me to do that, let me just give a little background in terms of what we used to use, because I was actually hired to evaluate an ERP system. I think one good secret that I’m going to share with all of the audience - and hopefully that’s very helpful - because I think when we people think about ERP systems, it seems to be very vague and very scary. You know, I’m sure I wasn’t the only one who felt that way.

But, at the same time, I think it’s also, you will be surprised by the benefits you get out of it. So, for us, we actually went straight to an ERP system at a year when the business wasn't doing very well. It’s not because we made a ton of profit and now we are like, ‘Great, let’s improve that.” Actually, that wasn’t the case. This is the reason why I kept coming back and said, “I think the pandemic, it’s a great challenge, but also a great opportunity for the companies to do whatever that they might not feel comfortable doing during a more stable economy, because I think you will have more needs in these types of tools.

So, for us, we basically went from we used to do everything in Salesforce, Petri, and Excel. Three different types of systems. When we got FinancialForce, even though we call it FinancialForce/Salesforce, but we’re really just on one platform. You can imagine for our employees who constantly have to juggle between three different systems, not really understanding how the numbers ever connect, and have to enter all the data like two or three times each time. Versus now, they just do it one time, and everything flows through, and we can actually also guarantee the data integrity because we know that it’s entered the first way and it’s correct.

So, I think that’s really our journey in terms of… We didn’t really just decide, “Oh, great. We have the money, and let’s go ahead and invest in something like that.” I think it’s, again, as a CFO, I’m going to say it’s not about spending money. It’s really about what you’re spending is getting you back in return. I think that’s what’s more important. Right?

I’d love to tell my CEO, “You’re not going to make money if you’re not going to spend money. Keep that in mind.” Right? I mean…

So, from that, I think I’m going to just elaborate a little bit more on the reason that we went with FinancialForce. It’s really a couple of things. One is really that we can be on the same platform. I think that is the key. You know? We don’t have to deal with different formats. We don’t have to deal with different functionalities. Our employees can be trained and easily utilize things. We have all the data at the same platform, so when we have to communicate data, reporting and information, it’s so much easier. We can build up. Really, we customize specific dashboards to our employees.

On top of it, like I always say, with our journey with the whole system, it’s really a great opportunity for us not just to talk about how to implement a tool that works for us. It’s really for us to be more transparent about all the departments, and really understand and connect to make sure that our process for each department can flow smoothly and efficiently. Also, for all the other departments to really get to know what’s kind of going on with the company. Right? I don’t know how many of us have the experience to say, “Oh, wait. You work for Apple. What department are you in?”

“Oh, we’re in finance.”

That’s all we know. We don’t know anything else about the company. You know? I mean, that’s a joke, but I think a lot of the time those are things that we have to really understand because I do find that when employees really understand and truly believe in it, you will be surprised how much more effective that they can be, and how much more passion that they have to work for a company like yours.

I think that’s really more the most important thing that we find. So, we actually get to revisit and really be smart and revise our business practice a lot more simply and easily and efficiently. That’s really where I will say the largest benefit that we saw in terms of getting the system in place.

Andy Campbell: That’s great. So, what I’m hearing is if you’ve got something that’s sort of simple, easy to use, it will be adopted by people, it gives you sort of seamless transparency through all the processes. That, in turn, will give you the information you need to make better decisions and all that sort of stuff. Is that where we are?

Ida Pai: Absolutely. You know, you will definitely get more buy-in. I can’t say more. I just have to share that my husband laughed at me when he heard that I’m going to implement an ERP system. Of course, he has an IT background. Right? Look! I’m very successful with FInancialForce, I’m going to say!

Andy Campbell: It’s going very well. It’s come very well.

Interesting you say that. You haven’t seen this slide, Ida, but I’ll share it anyway. It comes from the same source. IT comes from SPI. They do a survey every year of services business - about 700 services businesses - and this slide here describes the difference in business metrics between those companies that have integrated solutions for CRM, professional services, and ERP - and those people that don’t have integrated solutions. Again, you can see some significant differences there in terms of things like EBITA project margins. If you’ve got an integrated solution, you’ve got tighter control over margins and that translates into a 15% difference. You know? 3% difference in utilization rates, 17% difference in EBITDA. Those have a significant impact on the bottom line. So, it’s not just implementing stuff because it looks pretty. It’s because it drives the real sort of business performance.

You did start, at the beginning, talking about Excel. We all know that the spreadsheet is the weapon of choice for more CFOs to run their business. So, how did you win your organization off the dreaded spreadsheet?

Ida Pai: You know, I have to say, in many ways, we are a little bit more lucky in terms of we love Excel, but we are not as attached to Excel as much as a lot of the other organizations, because, first of all, most of my audience is - especially internally - is my CEO and all of my directors. Some of them are really savvy with Excel. They can do all kinds of things. Some of them are not so much. So, finding that we have so much formulas in these Excels, not able to drill down on data, it’s actually quite troublesome for some of our upper management.

Then, of course, as humans, we always say if we don’t like something, it’s very easy for you to nitpick on things that went wrong. Correct? So, when we see that the data is not consistent, the first thing that people will react is like your Excel is wrong. So, getting off on Excel on that that level was tremendous for us.

You know, we use a lot oreport building, we use dashboards in FinancialForce. My CEO loves it because I’m like, “Here’s a dashboard. You have questions? You just drill down. Don’t even have to come and ask me if you don’t have to.” Right?

But, I think, also, what we find the most important for us, also, is we’re international and we do provide consolidated financials. Which involves not just different countries, but also different currencies. So, having Excel to accommodate immediate changes to try to compare different currencies and different companies, it’s not very efficient and effective. Versus, when we have, you know, a built-in platform, I hate to say, I can pretty much compare them by a click away. That’s how effective it is. At the same time, I can really rely on the numbers and knowing that just because I do a couple of clicks, all my datas are accurate, and I don’t have to worry about that things change because I’m not sure if a formula got mistakenly entered or we forgot to update an exchange rate.

So, that’s how our journey so far went. So, I’m so happy to have a system in place rather than trying to change all the formats. Especially when you compare prior years and you don’t have the right format. What do you do? My goodness!

So, yeah. That’s where the system really helped us significantly.

Andy Campbell: There’s some fantastic benefits there. That’s really cool. Thank you.

I’ve got a couple of final questions. Great questions coming from Heather at Lone Star Solutions.

In the finance team, are you seeing more use of Agile and SCRUM methodologies in this changing world? When you talked about the way in which you engage with sales and other business units, do you do much in the way of SCRUM and Agile, in that more collaborative way of engaging?

Ida Pai: Absolutely. You know, with the system that we have, like I said, we have all the departments connected through the systems. So, we find we’re able to answer a lot more questions a lot easier. We have data there. We get to see… So, from us, we have a lot of project bases, so we actually get to see the life of the project, and we were able to set up notations and tasks for people to handle at certain stages. All that is actually recorded. So, if anywhere that we find issues and stuff, we know exactly who to contact instead of trying to figure out or read through 50 emails trying to figure out where are we supposed to connect.

So, that’s where we’re seeing all those significant benefits in terms of communication and collaboration.

Andy Campbell: That’s cool. That’s really good.

One last question from me. If there’s any more questions to pop through, please do. We’ve only got a couple of minutes left.

Lots of people out in the organization say they’ll be thinking about their own transformation journey and hopefully they’ll get some wise words from you and some thoughts about how they can help shake their journeys.

If you were to give them one piece of advice, what would that be?

Ida Pai: You know, I think I would definitely make sure to tell everyone, first of all, you need to have an open mind, and you need to get your business practice down. I think a lot of time people find that they’re just wasting money, because they invested so much money and then the tool doesn’t work. Well, the tool’s not going to work if you cannot have a very clear business process in place.

I think when you’re planning for your business process, you have to keep in mind that you want to be a little bit more flexible, and you want to plan for something that’s a little bit more scalable. That’s where, down the road, you will find that you can continue to work with your tool to accommodate your growth.

I think, sometimes, we get so focused and into just fixing one problem, but kind of miss out on the big pictures. I think having an ERP system in place and setting up the fundamental base correctly is going to go a very long way for everyone.

Andy Campbell: Yeah. So, it’s got to be… You need to take the blinkers off and think about the bigger people, and think about the future, because if you’re growing, you’ll be doing new things. You’ll be developing more services, potentially. You need to think about how you can take those new business models on board and all that kind of stuff, I suppose.

Ida Pai: Absolutely. I want to just add there, for FinancialForce, that’s one of the key reasons why we went with it because there’s that flexibility that we can continue to build on. I don’t think it’s something that you can just reach 100% from the first time when you implement something.

Even for us, we continue to make sure to connect and make more things more automated. It’s going to be a continuation of your journey, not just a one-time shot. So, I think that’s something that people should also keep in mind.

Andy Campbell: That’s brilliant. Thank you so much.

Ida, it’s been fantastic speaking with you. Thank you so much, indeed, for your time.

To summarize what I’ve heard and we’ve already thought through. The road of finance is different from what it used to sbe. It’s not just about people sitting in the corner counting beans. It is about being a real value-added partner engaging with and collaborating with and sharing data with all our business partners around the organization.

Change is inevitable. We need to think about and embrace it rather than try and stop it, because otherwise you’re just going to get run over.

Digital reimagining, thinking about how organizations can take advantage of technology. Because, you know, 20 years ago the mobile phone hadn’t been invented, but now it’s the weapon of choice for everything. You know? So, we need to think about what the boundaries are and how we can push them. Thinking about design in four services, because it’s going to grow. Thinking about deploying the processes in a seamless way so it’s easy for our users and giving you good quality data at the heart of your business in order to make better decisions, to invest where you want to invest and be able to make those decisions moving forward.

Again, thank you so much, indeed for your time. Some great insights there. I’d like now just to hand it over back to Michelle, who’s our overall moderator, just to see if there’s anything else that comes through, or we just wrap up from there.