Sridhar:
I wanted to start off with a big thanks to all the representatives from our partner organization joining us today as she’s showing in this light. Partners are a very integral part of our ecosystem. We put them up there with our customers. So thank you very much, everyone. And special thanks to Genpact and EY for willing to participate in this. So let me start off with you, Jennifer. So I know Genpact is one of the industry leaders in F&A operations, and you keep a close eye on what’s happening in the CFO office. So what kind of trends are you seeing in the CFO office? What keeps CFOs up at night from your perspective?
Jennifer:
So right now, I mean, cash is king. I don’t think anybody here hasn’t heard those words. Cash is king. And I was talking at lunch because interestingly, a lot of what we’ve seen throughout the day is kind of building up to this moment because that’s what we’re seeing right now. So with Covid, that real-time focus and analytics and insights and helping get predictive views and get in front of what’s coming is very, very important. The CFO is typically looking for what we call 4 Cs. So cost is just one element of it. Customer experience is something that’s very critical. Compliance, I know we talked a little bit about that. Compliance is very big and then obviously cash. So cash and revenue dilution are a huge focus right now. Things like the AI technology are really bringing the ability for them to have a better view of what’s happening in their world and a predictive view about potentially what could happen. Nobody ever expected Covid to happen. Everything was reactive. So everybody now has said this can’t happen again. We need to start looking at how we can get more proactive. The other thing that we see a lot of is where previously people were looking more at their metrics and what their results were. So the effectiveness of the organization versus a true blend of effectiveness and efficiency. So how you achieve your metrics is equally as important so that what and how is quite important. A lot of our clients are focusing on that.
Sridhar:
So, Shawn, I know you might have a CFO survey every year, and you guys, of course, are very close to the CFO office. So what are you seeing out there in the market from a CFO of trend perspective?
Shawn:
So the same 4 Cs that Jennifer talked about, but really there’s two that are the biggest highlights right now, and that is how cost to serve and digital transformation are kind of getting co-mingled where you’ve got ballooning costs from all of this rapid change, both within your company, within your supply chains, within your customers and your suppliers. And so the CFO is stuck in the middle with their shared services and their different operations, trying to make sense of what tools do I deploy, how do I connect with these, how do I make it so that I don’t have a linear cost structure, that every additional supplier or customer that I on board equals another dollar that I have to spend going out the back door. So figuring out what’s the right approach holistically, especially when you’ve got disparate solutions that have evolved at different speeds. So maybe I implemented a Cash App solution two years ago. Now I’m looking at what do I do for invoicing. Well, do they jive? Do they mesh? Does one make the other worse? So the CFOs are really struggling to make sense of all that. And then looking down the road, what’s the next wave? Like everybody is talking about blockchain, smart contracts, more A.I., more machine learning. All those things are coming down and going to hit them hard. And they need to make sure whatever they put in place now is going to be adaptive for that and not drive more cost into the system.
Sridhar:
I’m glad you brought in one of the biggest trends we are seeing. And Jennifer, you talked about prediction. So there are some simple use cases, you know, in the case of Highradius, where you predict the credit limit of a customer, we use AI for that. That’s reasonably simple. And then they get into complex cases. Right. Being able to predict the validity of a short payment from a customer. So from a use case perspective, specific to AI, Shawn, maybe you can start us off, but what are you seeing? What kind of use cases are adaptable to AI solutions out there?
Shawn:
So I think you have to look at how shared service centers and back-office functions are migrating. So used to be 10, 15, 20 years ago, you’d have somebody in a local office, they would drive down to the customer, bring them a cup of coffee, pick up a check, resolve a dispute on the spot. Now, you have all these centers and activities being centralized, being moved to Monterey, being moved to Europe, being moved. To India. You’re getting distance, and in addition to that distance, you’re getting a huge step up in volume. Every collector is no longer taking coffee to six people. They’re trying to look through two hundred accounts a day and figure out what they’re supposed to work on. It’s no longer possible to trust that collector or expect that collector to be able to identify subtle changes in payment behavior. So what you need to do is enable the person to do the job better by having machine learning and AI and look for those patterns and those trends and then prioritize the activities for the collector and have the collectors or the cash app people or the invoicing teams, then focusing on those things that the system tells them to look at. So they can have their skills working with the customer, not trying to interpret this incredible amount of data.
Sridhar:
Jennifer, I know you’re on the consulting side, but maybe you can give us an operational perspective of what’s being more adaptable to.
Jennifer:
Sure. And I’ll add I mean, obviously on the collection side, it’s really big. And going back to the efficiency versus effectiveness is not really where people want to spend their time doing that on their own. Some very non-value-added tasks. But Shawn, you touched on one thing for deductions, because deductions for CPG and manufacturing is a significant revenue leakage area, it is just a drain. And we’ve seen a lot and a lot of our clients, that’s where they’re very heavily focused on predicting the deductions, not just to know what’s coming, but to stop them from coming at all. So it’s one thing to recollect once deductions been taken, but ultimately the goal of every customer out there is to stop the deduction from coming in the first place. And AI has really done a good job in the deductions area of helping that. And we’ve got a number of use cases that that’s been one of their biggest, you know, positive cash impacts of.
Sridhar:
We have a poll question that needs to come up sometime here if you guys can open your apps. There’s a poll question to ask about which stage of digital transformation your finance organization is. Oh, I know there’s some raffle tickets available if you answer, but we actually value your opinion more than you get. So please take a second to answer that question if you don’t mind. And in the case of our partners that work with multiple clients, we would appreciate a broad-based opinion of what you see out there in the market with your clients. So while you’re doing that, I’ll. Jennifer, would you jump into the nitty-gritty a little bit? Right, talking about the digital transformation of the business case for that. Right. So so there’s always a complexity around building that business case. So let’s talk about the cost and funding mechanisms. What typically convinces the CXOs is to invest in a digital transformation of the finance organization, what kind of elements go into the business case.
Jennifer:
So I hope this phrase is not trademarked, but the four keywords ‘show me the money’. So what they’re really, really, really interested in is not the cost out, because that’s never going to make a business case, just removing people and boosting efficiency. It’s the business impact that’s coming from improvement. DSO, improve past due, improved days deductions outstanding and putting those numbers down on the paper is really what’s going to make a positive ROI. And it’s changed a lot because we struggle with that. Obviously, also, in any case, when you start to show them the true business impact it. Its cash is king again. And it’s, you know, show them, show them what they’re going to get out of it.
Sridhar:
So just to follow up on that, in case of an operation contract, do you still see the client investing in the solution, or is that something that Genpact as a provider of services takes it upon itself to invest and take the risk? How do you see the trends in the market from investment into a client?
Jennifer:
So the clients definitely invest. I think, you know, we’ve implemented. I know Jenny spoke with Tim this morning on our WESCO implementation. Same thing. So it’s all parties. Our job is to help the client sell into their organization. Why this tool? Why the benefit? What are they going to get out of it? And again, when you look at it from the less productivity and more true value dollars and cents, productivity may get you a couple hundred thousand because this impact may get you in the millions. It’s an easier, so much easier to sell.
Sridhar:
So, Sean, I want to ask you a different flavor of the same question from an advisory perspective. We typically build transformation roadmaps two-year three-year programs. There is one mechanism where there’s wholesale funding of the entire transformation versus a piecemeal, where you have little funding mechanisms, you have low-hanging fruit. So what kind of investment mechanisms are working with the CFO these days?
Shawn:
So the first it’s important to have a vision of everything that’s going to need to change because not all of it’s going to have the same amount of return and not all of it’s going to line up with what’s happening with the rest of the business. So you might have M&A activity that’s coming down the pipe. You might have customer changes, supplier changes that are acting. So we’ve seen both. We’ve seen the Big Bang transformation, three year defined roadmap, all funded at once. And then we’ve seen others where, hey, this is incremental, we need to do it. But you lay out the whole map, you figure out the value of return. Just like Jen was saying, with all the different total cost value to the business. And then you pick those things that have the highest, quickest return and self fund going forward. And I think one of the other key things as far as how to get these things sold, especially with the back office finance activities, it’s one of the more overlooked things that this is your contact with your customer. In some cases, it’s the most contact you have with your customer one on one. And every time your customer has to talk to a collector or a cash app person, you’re making them incur cost. And when you put it to a salesperson like that, your customer doesn’t ever want to talk to collections. Most of them just want to pay you. They don’t ever want they want it to be seamless because they don’t want to put that cost into their A/P department to help figure out what’s going on. So. That is a big sell with sales,
Jennifer:
And I would actually add that to the customer is not always the end customer. Internal customers. So does the salesperson want to spend their time talking to the collector or having to step in and be the collector? No, same with deductions. They’ve got much more important things that they need to do. So even though people consider A/R back office, they’re very much the hub of the entire wheel, and they’re dealing with multiple different parties.
Sridhar:
The opportunity cost element is significant. So let’s let’s flip to the other side of business case, which is value realization or benefit realization. So we at HighRadius believe in that and Sashi even talked about not getting paid unless our Treasury module was going to assure the results. So we believe in that philosophy. So what kind of benefit realization of leading practices are best practices are you seeing out there? How do how much effort do customers, your customers, put in tracking realization and benefits as they go through a transformation program?
Shawn:
It varies. And you’re, as you’d expect, the more you track it, the better your results end up being. So there’s lots of cases where the transformations we see that don’t go well are where everyone believes it’s a moment in time. We do one thing. We put in a tool. Everything’s going to be better going forward. But that’s not what makes these transformations stick. These rules really got to look at him kind of like an apprenticeship model. So you need an expert to come in and infuse your group with how to do this right. And then have them continue to train the rest of the organization because with any of these functions, you could fix everything. And tomorrow, something else will break. So the system has to be able to adapt to that and learn how to handle that itself. And you only get that through this innovative mindset within the team that’s there. And you have to track everything. The more things that are being monitored, the more things are being measured to make sure it’s sustainable. That’s what’s going to drive your success. And that’s where we see the biggest. Success is among our clients, regardless of the scope of what they’re doing.
Sridhar:
Yeah. Jennifer, your perspective?
Jennifer:
So the funny thing to me is that clients believe that if you implement today, you will see significant benefit tomorrow. That’s never going to happen. And I don’t care if it’s HighRadius, SAP, or Oracle. It doesn’t matter. There’s always a stabilization hyper care period. And that needs to be realistic. I do think that we have a couple of customers who were very skeptical and we’ve implemented and immediately actually did see very tangible benefits. Cash App is the quickest in which we’ve had customers recognize benefits, where they’ve gone from auto cash of twenty five percent to eighty percent, just switching on the tool. So those are really tangible collections, I think is the next one, or we’ve seen some really good paths to benefits. So we do see that. But they also do monitor heavily because what they see day one is only going to continue to increase over time. And to your point. Really what we tell all of our clients is everything. Technology is changing consistently, and you need to be aware of that and change with it. So keep reevaluating what you’ve done and change accordingly. Put in requests to enhance the product. HighRadius does a great job of adding enhancements from all different customers, but understand that that’s important. What happens today is not going to be what the world looks like in six months.
Sridhar:
And that brings us to the important point, which HighRadius is all about in terms of the right technology for transformation. Right. So what kind of perspective do you provide your clients in terms of picking the right technology? I know Ernst & Young is more of an advisory board. But let’s start with you, Jennifer. And is this point technology solutions, this platform solutions out there? So how do you advise your clients on picking the right technology?
Jennifer:
So we tell our clients you should look at it as end to end transformation. And we actually developed with HighRadius a star straight through A/R. So your goal should be I don’t touch anything in the system now. And Sashi said that earlier. That’s never going to happen. And I agree with that. But the goal is touchless are end to end. So credit, cash collections, disputes. Why do I have people touching when the system can do that for them? You know, previously we had a lot of clients that looked at a particular cash app solution or RPA, which is very, you know, specific to a use case. And we’ve really said you need to look at it holistically and end to end. And we’ve had a few customers that had some RPA solutions and that have now changed to a holistic view and really recognize the difference in the benefits around that. You should never just look at one piece of the pie.
Sridhar:
So Shawn, I used to work for EY So I know EY’s perspective. We were technology agnostic. I mean, we were when I was there. I’m sure we still are. So how do you advise your client and what kind of technology to pick and still be technology agnostic when it comes to advising them? Transformation.
Shawn:
It’s really about understanding the process and end first. So don’t don’t take the tool and then try to find where it’s going to fit. Find out what you need and then go look for the tool that’s the right fit for it. You may find out once you understand the whole process that you could. You don’t even need a tool. You might be able to change the way you go to market. You might be able to move to invoicing in advance with your customers and you don’t have to collect anymore. There’s lots of different ways you can solve the problem. If you look at it holistically. But then you’ll also know where the value add is going to come from. So you decide what toolsets to get and you want a toolset that’s going to evolve with your business. One of the biggest things we see our clients make mistakes on, especially if they try to home-grow their own applications, is that they will make one initial investment and then never put anything aside for continued updates and advancements. So it might be great right now, might even be better than a HighRadius out of the box. But then if you’re not going to maintain and keep it up, then it very quickly degrades and you’re going to run into trouble. So it’s thinking not only about what’s right now, but what’s going to be needed over the next few years to keep it running,
Jennifer:
Which is a trick because nobody knows what’s going to be needed over the next few years. But agree, if you’re with a homegrown technology, the chances of you keeping up with the times is much smaller than not. Now, one thing I would also add, though, too, and you touched a little bit on it. We have a lot of customers who just and I’ve personally sat in the room with some very large CPG major customers that they’re implementing HighRadius. And they and they literally take what they have today and just want to automate it and no! you need to look at the processes. You need to take this as an opportunity. You’ve got this great technology coming and you take this opportunity to build that foundation. Right. Change your. Processes, look at what your end goal is and make sure that you’re designing a technology that’s led by process to get you to that goal. Technology alone will never be the solution ever.
Sridhar:
I think we pretty close to the time limit here. But before we open it up for Q&A, let’s start conclude with some final thoughts from your side. Any thoughts, any comments about anything that we didn’t get a chance to talk about, Jennifer?
Jennifer:
You know, again, I think the uncertainty of what’s happening in the world right now is really made this whole space a very hot topic. Where we’ve seen a lot of our clients benefit is by going with tools and technologies that many others are already with. And you know, you can design your own, but if somebody else and I use web portal grabbing from a portal, those portals change all the time. You can design your own technology, but you’re going to constantly be updating it. So people have got smart and said, I want to go off what’s happening with others or themselves helps others out. So a lot of consolidation we’re seeing into the larger technology providers because it’s beneficial to the clients themselves.
Sridhar:
Shawn?
Shawn:
Yeah, I think it’s keeping in mind that this function is just moving more and more to the front as far as the importance to the overall business. The speed with which you need to have answers, the speed with which you need to respond to customers and the accuracy that you’re going to be expected to have is going up, up, up. So your customers are continuing to adapt. They’re putting in place new technologies and they want to be able to do business with you seamlessly. We’ve seen our our our clients are losing customers, not because they can’t deliver a service or a good, but because they can’t provide a clean invoice. And that it’s you would think on big transformational construction projects, things like that. These customers don’t want to have to deal with your back office. And that is a no-go for them.
Sridhar
Perfect. All right, thank you very much, but let’s open it up for Q&A. Just make sure you ask the questions, either Jennifer or Shawn, they are the experts. I’m just the moderator here. Any questions from anyone? Well, you nailed it, that’s all right. Thank you very much, everyone, for joining us. Shawn, thank you very much for spending time with us. Jennifer, thank you very much.
