Brent Fisher 00:04
So yeah, my name is Brent Fisher, I, Managing Director at Riveron. I’ve spent my career focusing on technology deployments, optimization, and implementation of CRM, CPM data analytics, and ERP systems. I lead our focus and our technology practice at Riveron. Around business applications. So that’s enabling the applications that run the operations of the business from financials to supply chain operations. Over the course of my career, I’ve spent it diligence, system strategy and roadmap, Technology Advisory, and then complex change. So been a Microsoft partner at Global SI and Riveron for about three and a half years. So this session is unlocking the power of ROI and your ERP system and integrating it into what applications are in the marketplace today. So you may be thinking I, you know, I don’t have a new age ERP system, or my ERP system is New Age, but it’s not, it’s not getting the true value. In this session, we’ll walk through where has ERP come from? And then how do you use best-of-breed software to integrate it into a cloud-enabled environment? And we’ve got some case studies that will walkthrough of how we’re doing that with clients today. So we’ll start with a backdrop of, you know, where has ERP come from? And where does it stand today? And how do we use different systems and integrate them? So about River on first, we are a 650 advisory firm. So we specialize in accounting and finance, technology operations, and improving the lifecycle of a business. Primarily, we serve the office of the CFO and private equity. So within the Office of the CFO, we’re helping them from, you know, finance and accounting operations, typically, it’s event-driven. So CFO leaves, you’ve acquired a company and you’re trying to, you know, integrate them, you’re selling or divesting of a company, we can help support that, as well as technical accounting. So revenue recognition, adoption, or lease accounting adoption, we’re helping clients through that. And then within private equity, we’re helping them from a full M&A lifecycle, so full lifecycle diligence from financials, tax it, and operations to integration, 100-day plan, and helping their portfolio companies as they integrate them. So we’re about 650 acquires, across 12 offices, and we lead through industry experience and company, you know, people that have been in consulting very similar to myself.
Brent Fisher 02:49
So let’s start with, you know, the on-premise journey from Cloud, from on-premise applications ERP to the cloud environment. Now, over the past few decades, you’ve seen major software providers like SAP, Oracle, and Microsoft, and these are just representative logos, they’ve really had to change the landscape of their on-premise built applications, and how do they make them cloud-enabled? And, you know, for the SAS market? So that goes from? How are they looking at how the code is structured to, serve the market on the cloud, and how to make it integrated? How did they change their platform, as well as transition their customers from on-premise to cloud. And then there are new providers that have always been in the cloud, you look at workday, NetSuite sage, and some of those were built in the cloud. And already on that journey. If you look at SAP is migrating to SAP S/4 HANA and Oracle, the Oracle Fusion, Microsoft legacy products of Great Plains division, Salomon except, are all being transitioned to Microsoft Dynamics 365. And the reason this is important is, you know, really looking at workloads now. So with all these different applications, they’re connected to an app store, to enhance and further integrate their applications. And the goal of these ERPs is really to provide the plumbing and the ability to store data, but less about the automation, AI, the reporting, and the visibility. So early on, ERP, before my time, was invented by manufacturers really an MRP lifecycle. So how do I get better planning, resource planning is really MRP that’s migrated from Oracle and JD Edwards into the beginning stages of the probably early 90s of ERP systems being more adopted by businesses. And with that, you look at you know, their large encompassing module base and their add-in on functionality.
Brent Fisher 05:02
So you’ll see like, as they’ve, as they’ve continued to grow these, these large ERPs may have an industry viewpoint, they’re scaled-down and their ability to focus on what are the core 70-80% of how you use the business, and then use additional applications surrounding it. So the average company today has, I believe, about 10 to 12 applications and they’re in their entire environment. And some of them are purpose-built by friends here at Tristar they’ve got is it PDI is the industry. So they’ve got an industry solution specific to their industry versus a big vendor. That’s, that’s less common in their industry.
Brent Fisher 05:46
So as ERPs evolved, it’s gained business functions. So starting with big modules, and then progressing further in the internet age, you see, it becomes cloud-enabled. So companies like Workday is a great example is started from an HCM premier company that acquired a planning solution from adaptive insights and integrated that into workday planning, built out their financial system, and growing from a workday financials to have it all interconnected into one platform, you know, built on the cloud. You know, postmodern ERP is, you know, cloud and SAS is really table stakes. You know, it’s it’s not being mobile able, but you know, mobile-first. So applications are built mobile-first and expanding outwards. So you’ll see your mentioned these apps that are coming involved just like your iPhone, go to the App Store, how do I easily integrate these applications with pre-built connectors to enhance? What are ERP systems do? Typically, what we’re seeing is ERP systems really only handle about, you know, the core plumbing or 70% of the applications. So how do we look at surrounding workloads like collections, credit or dispute management, and invoice delivery portals to enhance? Most of the company’s bigger ERPs are focusing less on those types of I would say research and development and more on applications like a HighRadius is focused on how do I enhance what the intake is from the data on the ERP size, and really leverage the data that it’s storing? So ERP typically is for transactional and storing of the data. If you look at, you know, why, why is this adoption happening? So, one, the advent of the cloud, it’s a low total cost of ownership, it’s an easier entry point, where companies are, you know, they may do a proof of concept to see how a solution would work, you can spin up an environment in Azure or AWS quickly, but it doesn’t have the infrastructure requirements that it did in the past. So with that, companies are focused less on how do I customize this application? I might make some scripts around it, but how do I make sure that we can be sustainable as we continue to grow and scale and adopt new processes? Without automation? So a reduction of manual processes, AI, and machine learning? How do I take the data that we’ve been storing in ERP, and start to learn from it and then predict, you know, outcomes that have historically just transacted and stored in the environment? So now let’s shift to you know, more of the integrated finance process, and really looking at the end-to-end solution. So we take the data that was stored in ERP, you know, in a good example, is, you know, thinking about customer payments, and legacy ERP environments have, hey, they’re collecting the data of customer payments, their schedule, their history, you have a term set up for them, but it’s not predicting what does that really look like from a cash flow forecasting? What can I really expect from the history that they’ve paid on and their future sales? So a solution like a pending it with HighRadius could help you determine this customer is late on consistently on their 30-day terms, we need to have a conversation about how that affects our real-time cash flow forecasting versus just what’s set up on the customer record?
Brent Fisher 09:30
Additionally, some factors that are driving for a better process are no organic growth plus growth by acquisition, personnel capabilities, the talent market is short people leaving upskilling are people to really think about how do I harness the data that I have? And then increased demands from the finance and accounting organization so better cash visibility, better reporting, centralized and standardized processes. So if you take a look As you know, at a macro level, I’m calling it the, quote, the full cash lifecycle. Your customer has multiple experiences with you and their customer journey. So we’ve dissected it here into a couple of areas that know how your organization interacts with your customer and makes them determine if they’re going to continue to do business with you. I personally don’t do business if it makes it hard to buy, sell, or get invoiced? You know, if it’s hard to do business with the customer, that or company that does that, we have to look at companies and say, how do we interact with them with how do they want to get an invoice? How do we work together with them? So if you break it down, we’ll look at the quote to order the order to invoice Invoice to Cash processes, and then signs of needs or high manual effort or overtime effort. On the invoicing side. We call it a swivel chair where you may enter information, one system turns around and enter very similar information into another system that that’s not integrated. You may have difficulty managing cash or working capital, or that the systems are just unknown from a data transparency perspective. So if we double click into the Invoice to Cash process, you know, we’ll look at you know, what does it look like to become best in class from these different processes. You’ll see this and you may have seen this with some of the HighRadius solutions. If you break it down, across, you know, five or six different components of the detail of Invoice to Cash process. Really the journey can be long and tedious. So best in class organizations have many interactions on the A/R side across this different lifecycle. So billing, for example, you know, we shouldn’t be at the stage where combining information from CRM and ERP and excel sheets to manually create and distribute an invoice. We need to get away from disparate systems and how they’re integrated and talking together. The best invoicing processes are up to date with real-time information using customer portals, e-invoicing, etc. and automation will continue to help you get there. A recent example we were at a client on Friday, and it really hits on this dispute management side. They had an unknown percentage of their A/R under dispute, they thought it was probably around 15 to 20% of their A/R was in dispute. And it was all in sticky notes and an Excel sheet. somebody’s laughing, they understand this. It’s all in notes and an excel sheet. And when the session’s gone for the day, or they have no idea, no idea no visibility into what the dispute management process looks like? How much percentage-wise is under dispute? What do we think we might gain from that. So one thing that we’ve done with some HighRadius solutions is putting a process into place around just that dispute management side and providing better visibility on the art collections process. So as you dissect the process, you need to understand kind of what’s best in class and return on investment. Now going through a quote to cash transformation project and maybe focusing on a couple of instances. Studies have shown there’s 15 to 30% on cost savings of one to three in sales, revenue increase, and then benchmarking against what is best in class. So typically, if we come in to help a company, dissect their whole quote to cash lifecycle, we’re going to run some industry analysis based on size type of business and compare that to what’s median and what’s best in class where you are today. And how do you get there?
Brent Fisher 14:04
So some examples I’ll share is, you know, invoice to payment is 25 days, best in class day sales outstanding 37 days cash on hand 85 Cash receipts without any manual manipulation 90% the cycle time from Create Invoice is two days. So as you’re kind of thinking about your business, you know, how are you stacking up against some of those best in class metrics, percent of invoices auto-generated 70% Total uncollectible balance as a percent of revenue less than 1%. So those are just some examples. We also do some FTE comparisons. So you know if you’re a billion-dollar company, how many FTEs best in class to handle the collection process? And then how do you take that from where you are today? Add some automation and maybe repurpose salespeople to more value-added things and help reduce some of the repetitive tasks. So I’ll look at a case study, and I’m gonna go a little longer than 18 minutes, I thought it was 25. But we’ll go through a case study, but a target state, this is a SaaS company that we’ve helped. And they also have bundled equipment and provide services as well as SAS billing. So, their environment is complex. So from an ERP standpoint, they have NetSuite. They have salesforce.com. From a contract management revenue recognition standpoint, they’re extracting their data into a data lake. And then we’re manipulating it to put in dimensions and measures. And then to display it across Power BI. They’re using zone billing, from a billing aspect, and then increasing it with the capabilities with HighRadius, HighRadius for the Dunning process for cash application, and A/R. Now, this isn’t to say that this is, you know, perfect in state. But this was the target and state based on evaluating where they are today, which doesn’t mean you have to strip everything away and start with something fresh in one platform. They already had some of these solutions in place, but they were not used in the best ability, we introduced HighRadius to take on some of the additional capabilities around the collections A/R cash and the Dunning process. So some of the outcomes that we’ve seen. So we started with their future state understood what their current analysis looks like, then moved into, you know, a prioritized matrix of opportunities. So we can lay out a long list of the time and the value of all their opportunities, and then working with clients to help prioritize what they take on from the billing side, reducing the FTEs, from ten to six, and on the collection side, and application cash application side moving from eight to four with introducing some automation, so we were able to repurpose those people into more value-added tasks. And as they continue to grow through acquisition and organic growth, they don’t have to do that by adding more people to their finance and accounting departments. So that was the overall goal. The goal is how do I continue to scale the business without adding more people? And it gets difficult in kind of the inorganic growth, adding acquisition, bringing people over, and then figuring out how do I connect all these systems together? This is a continuous journey of improvements. So it’s not something that you tackle, no one time and it’s completely your ongoing assessing, you know, where you are, how do you mature your finance and accounting department? How do you bring other pieces of automation? And, you know, really, where do you identify the broken processes. So it all points back to the technology really enabling a process if the process is broken, the technology will not solve anything, just may make, you know, the process more, you know, broke more broken or highlighted. So you know, we really focus on how we understand the key processes, breaking it down into different workloads. And then from there, how do we introduce automation? So that was some of the stories that we had, you know, working with HighRadius and a technology environment. radius one, you know, from a mid-size and we had this conversation earlier. There are six different applications that we looked at from the Invoice to Cash process. The radius one solution on the mid-market is a little more simplistic, so mid-market companies if they’ve got an environment like some of the ERPs I mentioned before, it’s a good solution to help focus on maybe disputes credit collection and taking off pieces at a time.