Working Together: Guide to Enabling Successful Digital Transformation In The Office of the CFO

Kevin Permenter [00:00:05]
All right. So the this was the scheduling wasn’t my idea. I didn’t mean to follow both gift cards and a dancing performance. Because all we have here are just some tips and tricks and best practices around digital transformation. So, you know, way that with a grain of salt, it’s not as sexy as, you know, an iPad, but it’s important stuff. So we’re going to get to I think one of the things that I want to start with is this idea that the digital transformation is not a new thing. The office of the CFO has been changing quite a bit over the last maybe ten years. But of course, with the pandemic and some of the Black Swan events that we’ve been seeing over the last 24 months, a little bit more than, I guess, you know, the acceleration in the pace of the acceleration has really been changing. So, you know, digital transformation has been seen as a pathway really to kind of, you know, build a bridge to the future for the office of the CFO. But those digital transformation projects are expensive. They can be expensive. They can be cumbersome, they can be tricky. So what we’re going to do here today is try to give you some tips and tricks and best practices around various aspects of it. And, you know, to really kind of give you a take away and then some some something to hold on to as you go back into your into your jobs. So I guess I want to start with the first question here. The ffice of the CFO for the Office of the CFO. What are some of the top things? And this is just Kyle and Samir and practitioners here for the office of the CFO. What are some of the top things that they’re trying to achieve with the digital transformation efforts? And then, of course, what are some of the things maybe that they haven’t quite achieved in those digital transformation efforts? Start with me, Samir.

Samir Bagri [00:02:19]
I’ll go first. So first I wanted to say I’m so thank you for inviting me and I hope everybody’s having a wonderful time and looking forward to the conference. Actually, it does feel good to be back in person and I’m sure others are probably down the same path of transformation. You know. Interesting question there as to what is the office of the CFO looking for in transformation? When I reflect upon transformation, it’s been in our business dictionary for decades. Right. So what’s changed? Right. In the nineties. Focus was primarily on cost. Right. There were things like reengineering, activity-based costing, balance scorecard. And I was a practitioner of that. But what I see different in the last ten years is the high focus on customer experience, early days of transformation, focus on cost, not really on customer experience as much. In the last ten years, I think technology has brought customer experience to the forefront. Cost has become a given. And what’s interesting also is employee experience has really come on top of mind now. And a lot of it is kind of the virtual work that happened during COVID, the big resignation, you know, employees finding innovative models in terms of how they work for different companies. So I think employee experience is also another area that’s going to be huge here going forward. Coming back to your question, why consider transformation? The way I look at it is, first of all, customer experience use technology to make every customer touchpoint a positive experience, regardless of whether it’s in the front office, middle office, back office. Understanding customer needs proactively. Secondly, operational processes. Improving the internal process through technology. And as part of that employee experience, making sure that digital tools are available to all the employees to make their work that much easier so that, you know, what they do at work is similar to what I’m doing right now with my i-phone. Right. And innovative business models of augmenting the physical environment with the digital environment. So those would be the few areas where CFOs seem to be focused on for transformation.

Kevin Permenter [00:04:49]
And I’m gonna throw it over to you, Kyle, but I want to pull the thread a little bit on some of those answers. The idea of the employee experience being top of mind for the CFO, it really is resonating recently. And then the idea there was a thread that you laid out in there that was talking about, you know, the back office. And there is a connection all the way to the front office, right. That these things aren’t in isolation, they’re connected. So I think those are two really important ideas he brought forth there. Go ahead, Kyle.

Kyle Prestidge [00:05:21]
Yeah. Good morning, everyone. Kyle Prestidge Global Director, Credit, and Collections at Sealed Air. Just to add a little bit to what the Samir said is. You know, you can transform any process and you can do it for efficiencies to improve your control environment, certainly. But I would imagine the number one is to see operating cost reduction. And so, you know. As an as an office environment. We’ve been able to have seen this as a success story in the manufacturing environment over the last 15, 20 years. Right. You first focused on cost reduction, labor arbitrage, what kind of countries you go in to get that incremental labor arbitrage. But that only gets you so far. And so you bring in interject technology and automation really to get a touchless process. Right. And that does two things. Obviously, it reduces your overall cost structure, but it can build in overall control into the process to have less deviations come from it. But, you know, a part of it is what’s the success story? You know, if you go in with the expectation that it’s going to solve all your problems, it’s going to streamline everything, you’ll be poorly. Um, you’ll be sad, right? Because ultimately you still need that human interjection. Um, you know, best case, what I’ve seen through my experience is you might be able to automate about 80% of an entire process from beginning to end, but you’re still going to need that human interaction and touch throughout the process.

Kevin Permenter [00:06:53]
In the end, it’s still a people business, right? And people still matter. Um, I want to get to, I want to change gears a bit here and talk about another aspect of digital transformation efforts that we see become pain points and that’s partners, right? And partnerships. I want to, you know, throw the question to our practitioners here Kyle first and then Samir the idea of how do we think about partners? You know, what partners do we need to complete our digital transformation? And then, of course, how do we go about finding or selecting those partners? I think that’s those are important questions.

Kyle Prestidge [00:07:34]
And I mean, it’s critical. Absolutely. And so, you know, any transformation initiative, you’re going to go out and select a variety of vendors. And essentially the assumption, the admission ticket to the table is that the technology is proven and it works. And odds are there’s going to be two or three vendors that offer a technology solution that are comparable. There may be one that the finance team likes a little bit better or maybe one of your internal I.T likes a little bit better. But ultimately you need to have the proven technology on the table. So if you take that off, how do you select a partner? It’s about any relationship, right? It’s trust, it’s transparency. And how do you get that trust and transparency? I think it’s events like this, right? I mean, I had the opportunity to go out to dinner with Jared and Samir yesterday and got an opportunity to talk about success stories from customers with HighRadius. And it wasn’t just about. What, everything worked well, right? Also talked about what pitfalls and obstacles that they had. And you through conversations like that, you really understand that transparency piece. And just an example to walk through my boss, we had a very large service center RFP in my boss where that transparency and trust peace was. The first thing he would do is go look at all their metrics right on the walls. We come and visit and of course they would update it and get it all going. But if everything was green, you said one of two things. Either you’re lying to me. Or you’re not measuring the right things. Right. And so we want to partner with someone who is going to be transparent, roll up their sleeves, identify problems, and figure out how to solve them.

Kevin Permenter [00:09:17] Go ahead, Samir

Samir Bagri [00:09:18]
Fair points in terms of partner selection. And if I was to add a couple more items to think about more from a client practitioner perspective. And the first thing I would do is the client practitioner self-reflect as to why is it that you are looking for a partner. And that helps with identifying where you may have, quote unquote, weaknesses within your own organization. And it crystallizes as to why you are truly looking for that partner and not only for yourself as your own organization, but your ability to then broadcast to your stakeholders as to why there is a partner that’s needed. And that goes a long way in terms of change management when you’re actually implementing. So that’s one. The second area that I usually think about is as a client, we spend a fair amount of time evaluating partners and spend time selecting one. Keep in mind that the partners doing the same thing. They also have a roster of clients. You are somewhere in that mix, right? You may be in the top, you may be in the bottom, you may be in the middle. It is important to find out as to why the partner wishes to work with you. Right. Is it because looking for a large customer, looking for something innovative, something new? So it goes a long way to also do that self-reflection and understand where you fit in into the partners roster.

Kevin Permenter [00:10:50]
Yeah. It’s a long, you know, sort scary journey for a lot of companies. And your partners are there to kind of, you know, help you get through it and walk you through it. But it’s a relationship, right? But you have to really put some thought some time into. So I agree wholeheartedly. With what the Kyle and Samir sort of said. We’re gonna get to Jared, he’s got the beard, right. So we don’t want to leave him out. And what I want to do is talk about another theme of the digital transformation effort, and that’s setting expectations, right, having, you know, matching and setting those expectations. I want to talk a little bit about, you know, to Jared from his perspective with helping hundreds of companies sort of go through the digital transformation. You know, talk to us a little bit, Jared, about what expectations do you have when you’re going into those situations? Sure. I appreciate it. You know how to everyone.

Jared Lane [00:11:51]
Sure. I appreciate it. You know hello everyone, I’m Jared, the VP of Digital Transformation here at HighRadius. I think the first thing is when you’re heading into these projects, that’s good for, you know, your vendor partners that we really try to instill is it, you know, kind of realize that this isn’t just an I.T. project. This is really a business-driven project. And as you’re going through all of your requirements and kind of building out what you think you need, don’t necessarily replicate your current process. You know, really dive in and ask, you know, is this the most efficient way that we can do this? Are we actually just asking the vendor to customize their software to meet a process that’s broken or inefficient or you don’t even know why you do what you do anymore? And it’s just always been that way, that sort of thing, and focus on that. The main thing, though, that I like to have the teams focus on when we work with our customers, though, is change management. It’s still the most under-budgeted or ignored thing part of the process. You know, we were talking yesterday with a lot of different people and about how, you know, people react when a new system is coming into place and they don’t like it or they’re scared or what’s going to happen to it. And and really explaining that early on, getting buying in from the top down of how this is going to work, how it’s going to change everyone’s job, how it’s actually to make them more efficient, more valuable. It’s kind of key to early stage to making sure that that the product is successful.

Kevin Permenter [00:13:16]
Yeah. So as a technology consultant, I’m rarely given an opportunity to hear the expectations discussion from both sides of the ledger here. We have, of course, Jared, who is on the vendor side, and he’s going to come into your companies or to help you in that fashion. We also have two practitioners here, so I’d love to get, you know, a little reaction. Right. React to what Jared has said and how what he’s talking about may impact how you shape your digital transformation efforts. Go ahead.

Kyle Prestidge [00:13:52]
Yeah, I can start first and I think he nailed it right in the head is you don’t want to just automate a bad process. Right. And I think from a practitioner standpoint, when we’re looking at a vendor like HighRadius, we don’t want to internally say, okay, we have all these processes, they’re not standardized. Let’s find the region that does it best and let’s automate that for the globe. And that might work and you might get some benefit and some efficiencies. But I feel like the expectation is, you know, an example like HighRadius, they’re the subject matter experts, right? And they’ve got multiple clients in the same space. They’ve worked in this environment and they probably have some proven successes. And so you don’t necessarily have to start with a blank sheet of paper by any means. But certainly, the expectation is, you know, a HighRadius or a vendor would come in and have those benchmarks, have those success stories and share those practices of what other customers have done and how they’ve seen it work.

Kevin Permenter [00:14:50]
Are you anything there?

Samir Bagri [00:14:52]
Yeah, a fair point. I fully agree with what. What’s been said. Um, the way I would look at it is, you know, a partner like HighRadius coming in, bringing in the technology, to your point. Also bringing in other best practices, seeing where things are work may not have worked. So, I think it’s important to keep an open mind to that as a client, as a new client, and then also take the opportunity as a new client to identify what will be the bottlenecks within your own organization, but use that more as a way to find opportunity as opposed to, you know, making it a reason not to implement.

Kevin Permenter [00:15:32]
That’s very good. Very good point there. I want to go back to Jared. Right. From his perspective, how do you what can you tell us about helping clients measure the value of these digital transformation efforts?

Jared Lane [00:15:47]
Right, so one of the things we do really excuse me really early on. Is aligned on what those value metrics are going to be. What what is success mean to you at the end of the project? And once we have those value metrics, we then kind of take a step back and double click on, Okay, well, what are the levers that we need to implement to achieve those value metrics? And those levers start to become your leading indicators, whereas the those metrics become your lagging indicators. And by identifying the leading indicators early on in knowing what those are, then we can measure how we’re achieving on those. And so we’re not just waiting till after the fact, you know, then seeing how things happened after it’s already done. When you’re measuring the leading indicators, you can actually effect change during that process earlier on. And, you know, one thing that high ratings does is, is we have transformation advisors assigned to each of our customers that have ten, 20 years experience in the domain and meet with them on a regular basis. All of our customers monthly, six weeks, eight weeks, poorly, whatever is needed to go over those metrics and adapt and evolve them right. They understand what’s going on in the industry, economic changes, your own company changes, you know, all those different things we can pivot. The thing about transformation projects and kind of the secret is they’re never over, right? You always have to be kind of evolving the requirements and evolving is how things change. And so, you know, having that kind of trusted resources been there, done that, and knows what’s happening in your peer groups is extremely important.

Kevin Permenter [00:17:17] All right, so last question. We’re going to throw it to Kyle and Samir here. You know, we just talked about change, right? So the world is evolving around the office of the CFO. You know, the office of the CFO itself is evolving. And so to have the digital transformation projects right where they need to talk a lot. Talk to us a little bit about how you see them evolving over the next few years. First, Samir and then Kyle.

Samir Bagri [00:17:43] In terms of the evolution over the next few years, I believe costs, working capital improvements, those are a given. And the value-based capture that partners like HighRadius brings are key to making sure that value gets delivered. And as a practitioner within the client, I think a high focus also needs to be on that customer experience aspect. You know, are you taking out the cycle time? Are you making it easier for the salesforce, let’s say, to use the application? And then the other piece that we talked about was the employee experience and are the employees working in green screens in the back? And, you know, the front office has apps that probably will not work into the future. As you know, just about all of us are getting more and more used to using our phones, using tablets, and have become even more used to used to that or the last two years.

Kevin Permenter [00:18:41] And, Kyle.

Kyle Prestidge [00:18:43] Yeah. And just to add to that, I think it is about it’s continuous improvement, right? And so we’re implementing all these new technologies and automations and solutions and RPA, but people change processes change, technology changes. And so both, you know, the practitioner and the in the vendor role, they may need to have a continuous improvement mindset. Otherwise, you’re going to be left behind. And you know, I think. What I’ve often seen as people try to automate a piece of a process. But what works well as you end to end right in a true Order-to-Ccash, a true Procure-to-Pay and leveraging tools, functionalities to their most. What I’ve seen a lot and times as people try to have a new technology replicate what they already have, right. And it’s just a piece of the puzzle, even though there’s a lot more different functionality available. And so I think the long-term solution is taking full advantage of that whole process from beginning to end and having that continuous mindset.

Kevin Permenter [00:19:45] So that’s you know, I want to know how we’re doing on time. Just 2 minutes left, all right. So we got time for maybe one question. Um, there’s time for questions. There’s only 2 minutes left for us. Okay, so obviously nowhere near as entertaining as the dancing cheerleaders. So we missed the mark on that one. I think if we could. You know what, Jared, there’s time now. Talk a little bit about the evolution is there’s another minute where you can sort of wrap this up.

Jared Lane [00:20:18] Yeah, and so, you know, I think one of the questions that we get all the time is people want to improve the process. People want to make make sure that they’re doing well, but they always ask us, well, how am I doing versus everyone else? What’s everyone else doing? And so I think one of the main things we try to do is first, you have to understand where you’re at. Do a really deep current state analysis, an honest, transparent one, and acknowledging, you know, like you said, everything can’t be green where the reds are because the reds are the opportunities for improvement. And then do some benchmarking which which, you know, vendors like us can help you with based on industry, based on your peer group, based on on all those sorts of different factors. And, you know, the goal of it here is to get from wherever you’re at to the top-quartile or be one of the top performers here in not just, you know, comparing against yourself, but comparing in how you get there. And so we’ve seen a big trend in people wanting to, you know, figure out not just how to improve themselves, but how to improve themselves against others as well.

Kevin Permenter [00:21:19] Yeah. So benchmarking will, you know, be an important, you know, go forward for digital transformation.

[00:21:25] Thank you all so much.