This episode features an interview with Kevin Permenter, Research Director at IDC, the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. Kevin has over 20 years of experience in finance. As Research Director, Kevin is in charge of providing insights and analysis across Fintech market segments including accounting, revenue management, treasury and enterprise payment management, and more. Prior to joining IDC, he consulted with Fortune 500 companies on strategic planning, market analysis and technology evaluation among other topics. On this episode, Kevin discusses improving the efficiency of data management, getting actionable insights at near real time, and building resiliency of your business.
This episode features an interview with Kevin Permenter, Research Director at IDC, the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets.
Kevin has over 20 years of experience in finance. As Research Director, Kevin is in charge of providing insights and analysis across Fintech market segments including accounting, revenue management, treasury and enterprise payment management, and more. Prior to joining IDC, he consulted with Fortune 500 companies on strategic planning, market analysis and technology evaluation among other topics.
On this episode, Kevin discusses improving the efficiency of data management, getting actionable insights at near real time, and building resiliency of your business.
Quotes
*”The office of the CFO now, their main job is moved away from adding a half a point of profitability here or shaving off a half a head count here, you know, they've moved away from those sort of really speeds and feeds or tactical goals. And the bigger goal now is resiliency.”
*“I need to be able to move this company and protect the people in it, protecting my shareholders, protecting my customers. I want to protect these constituencies, and the way I'm able to do that is by moving fast. And the only way to do that is to manage the data such that you're getting actionable insights at speed.”
*”What's been happening within data management is a realization that most of your business problems come down to data management. It's either the fact that we're not getting data into the financial operations space in an efficient manner, or the system itself is not efficient.”
*“The companies that have invested in the infrastructure to efficiently manage their data, those are the ones that are agile. Those are the ones that have shortened the time between a business event and a decision so that the CFO, the board, now they have that rock solid information that they need, even across a very complex business environment to make the decisions. They’re the ones that ultimately have an advantage in these uncertain times.”
*“You can have a situation where the treasurer is looking at their dashboard. And they're seeing a ticker go by with all the relevant market information. And that's coming in from a marketplace provider via an API. He's also looking at his bank accounts and those are coming in from the 10, 15, 20, 30, 100 different bank accounts via APIs. So he's got all this information. He’s sitting at the head of this river of information and the plumbing bringing all that information to him are the APIs. So what we're finding is that companies that are working to efficiently move data quickly through the process from transaction to decision, or from transaction to insight, and then insight to decision, the ones that are working to build the plumbing, to build the infrastructure, are the ones that are learning to thrive in this market. And that plumbing, that infrastructure, is oftentimes built upon various APIs.”
Time Stamps
[6:12] About the role of Research Analyst
[10:59] The convergence of financial operations
[16:16] Cash Crossroads
[24:52] Using APIs to streamline operations
[27:39] The Playbook
[34:00] How to tackle uncertainty
[37:49] How to prioritize investment
[41:22] Report from the Future
Sponsor
The Invisible Vault is powered by the team at Kyriba, the global leader in cloud treasury and finance solutions, empowering CFOs and their teams to transform how they activate liquidity as a dynamic, real-time vehicle for growth and value creation. To learn more visit www.kyriba.com
Links
Connect with Kevin on LinkedIn
Connect with Daniel on LinkedIn
Kevin: You can have a situation where the treasurer is looking at their other dashboard and they're seeing a ticker go by with all the relevant market information. And that's coming in from a marketplace provider via API. He's also looking at his line of credit. He's looking at his bank accounts and those are coming in from 10, 15, 20, 30, a hundred different bank accounts via API APIs. So he's got all this information. He's sitting at the head of, of this river of information and that river and the plumbing, bringing all that information through Kevin are the API APIs. So what we're finding is that companies that are working to efficiently move data quickly through the process, right? From transaction to decision or from transaction to insight and insight to decision. The ones that are, that are working build the infrastructure are the ones that are, are trying to thrive in this Ms market. And that infrastructure is oftentimes built upon a very CPI.
Narrator: Hello and welcome to the Invisible Vault. This episode features an interview with Kevin Permenter Research Director at IDC. On this episode, Kevin discusses improving the efficiency of data management, getting actionable insights at near real time and building resiliency of your business. But before we get into it, here's a brief word from our sponsor. The Invisible Fault is powered by the team at Kyriba, the global leader in cloud treasury and finance solutions, empowering CFOs and their teams to transform how they activate liquidity as a dynamic real-time vehicle for growth and value creation to learn more, visit Kyriba.com. So please enjoy this interview between your host, Daniel Shaffer and Kevin Permenter Research Director at IDC.
Daniel: Let's get started. Today I have the privilege of talking with Kevin Permenter. Kevin is the Enterprise Research Analyst for IDC. the premier provider of market intelligence in the world. Kevin has a distinguished career in consulting for Fortune 500 companies and many other opportunities, in providing guidance and inspiration for people that he's worked with in the past years. Kevin, thanks again. And welcome to the Invisible Vault podcast. You know, we wanted to take a minute to learn a little bit about you and what got you to where you are today. I know you spent a few years as an enterprise technology analyst, but what really led you to that career? Is that where it started for you? And did you have any experiences or maybe some early mentors who really inspired you?
Kevin: Yeah for me, I guess I'm the sum of my parts. Right? so for me it was, giving me opportunity to go to, the college that my mother went to. She went to Florida a and M university. It's a historically Black college in the Tallahassee Florida area. And, I was able to get a lot of opportunities afforded to me because I, I went to Florida a and M. And one of the really interesting things is that because I've always been curious about business problems and curious about technology and the way everything sort of fits in together. I've always had an entrepreneurial mind. I remember starting a pressure cleaning business with my buddies in high school. It turns out that Florida A&M was a great sort of, nurturing bed for me to kind of grow out of. And it gave me my first opportunity into this sort of technology world. Yeah. I was able to take advantage of a department of state sort of program that wanted to get you know, young, black males up into the foreign service world. My station, I was lucky enough to get was in Botswana. Gabarone, Botswana the capital there. And I was able to, you know, work as inside the embassy, helping. young entrepreneurs. There, work out their business problems. And then, you know, I was able to pick up a lot of skills and that set me on my track. It gave me an opportunity to learn and grow, but it also gave me an opportunity to get a, a secret, clearance. And that really open new doors for me. that got me into a program that was designed to get, young African-Americans into the technology field. It was called at the time entrepreneurial technology apprenticeship program. you know, next thing, you know, it's been 20 plus years of me sort of, looking into technology markets in some capacity or another, helping companies and, commercializing technologies, growing new markets, expanding into new areas. It's been an exciting ride.
Daniel: That's a very interesting background To really dig in to that entrepreneurial spirit that you had. And I'm sure, you know, part of that really was coming through you in those days and college, and wanting to explore other parts of the world and really see how people operate.
Kevin: Yeah, I mean, it was an odd conversation to go home to my mom and tell her, Hey, here's my coach ticket to Botswana and, you know, my family, most of us never leave south Florida. So the idea of going to a nation, a half a world away, that was a shocking moment for her. I think it was also a moment where she realized that. Hey, this is a different kid. This kid wants to do something different,
Daniel: One of our guests early on in the podcast is a CEO of a company called Ripplenami. And she does a lot of business in Africa and is today fascinated by the entrepreneurial spirit that she continues to come up against and is really working on a way to track and map all the different types of businesses in Africa so that people don't have to rely on the black market to get by. And I think you have a little understanding of that.
Kevin: Absolutely. Absolutely.
Daniel: So one of the important parts of the discussion here today is around technology. What was your path to becoming an analyst for IDC? I mean, you said you wanted to understand the businesses. Tell us a little bit about IDC as an organization and what you do there.
Kevin: So, I wear three hats As a research analyst here at IDC, I wear the hat where I'm interacting with vendors, and other sort of companies that are building the software and selling the software. Then I interact also and I wear another hat in which I talk with the end users, right?
The folks that are actually utilizing the software and trying to get it to support their business and their business world. And then that third hat is reserved for sort of the the venture markets, the venture cap companies, private equity guys that are looking to figure out, not necessarily individual companies, sometimes they are, but sometimes they're looking for help around the growth potential in the entire market or a niche or sliver within a market. So at IDC what's really interesting about this job is that no, no two days really are the same. Every day there's like a new challenge and that really appeals to me. There, are there issues where companies are working through not just sort of, Hey, how do we get companies to migrate to the cloud? Right. That's been a, you know, that's been a kind of a thing for a better part of a decade, So that's sort of, a tried and true problem, right. But every now and then and a lot of times I get problems around new areas, right. Diversity, equity and inclusion problems, how does you know, the office of the CFO handle DEI ESG, environmental, social, and governance even some issues around like accessibility. How does the role of the treasurer work if your, employees have accessibility issues? you get the maximum sort of productivity and provide a positive workspace for some of those folks? So the business problems are just sort of, ones and zeros or, you know, debits and credits the business problems often. sort of crossover into like the people aspect of software building. And those are the ones that I really sort of, rise to. And those are the ones that are really exciting.
Daniel: So you're referencing a little bit of development on software. Can you talk about your main clients? I'm not sure you're able to disclose that, but maybe give us a sense of the type of clients that you work with and provide consulting for.
Kevin: Right now I cover six, financial markets w underneath the umbrella of financial applications. So that's your small business accounting to the large ERP financial suites. For that we call that sort of the traditional financial application space. And then I cover traveling expense. corporate tax. accounts payable. Accounts receivable and of course I covered treasury. And within that sort of ecosystem, I cover companies that are going after various customer segments, right? So some of them are built specifically to go after small businesses, you know, they're light and they're fast. And you know, they can be deployed quickly. And they go after small businesses to try to help them grow then there are ones that are going after that mid-market space where the problems are big, but the budgets and the resources don't always match. And then they, you know, I have a handful that really sort of go after the large and complex areas within,. Those various spaces. They go after the large and complex you know, businesses that are multi as I call it. Right. So they're the multi-national multi business unit, multicurrency. Multilanguage right. The multi multi you know, kind of companies of the world. Fortune 50 kinds of guys. So in that whole spectrum, I have clients within that spectrum. And then of course, along the, you know, sort of, parallels of all the different categories that I spoke of.
Daniel: Well, that's really helpful to understand what you do at IDC. So one of the things that you identified here in that types of clients that you work with in segments is that there's a real new mindset happening. People are looking for growth. They're looking for quality and there's a lot of interesting environmental challenges right now. Supply chain disruption is changing the way that CFOs lead their organizations. You talked about ESG as a real hot topic, which is a new consideration, right? For CFOs and all business owners. Payments are developing and growing really fast. Can you shed a little bit of light on maybe another hot topic that you're seeing that is making a difference in the way business leaders invest in their technology?
Kevin: Absolutely. We're seeing a tremendous movement now maybe something short of a revolution. definitely a a forceful move toward, the convergence, right. The walls or the convergence within you know, financial operations. Financial ops in many ways is a Multilink value chain, right. Starts with, you know, maybe procurement. Right. And then goes into AP and the net goes into treasury you know, and then that rolls up until your FP&A and budgeting and planning. And then finally down to your, you know, financial close or some iteration like that. And then of course, you've got your big ERP or system of record in the front, right? So, you know, what I was just described as a, it really is a value chain or financial value chain. And then what we're starting to see is that the walls between those areas right, are starting to collapse. They're starting to fall down and you're starting to see you know, companies that primarily have done procurement adding AP accounts payable. Companies that have primarily done treasury, adding financial close and reporting or adding treasury, right. And then treasury companies that have normally done, you know, the state, you know, sort of true to treasury, adding, you know, sort of corporate payments and and some of these sort of adjacencies. And what's really interesting about it, the thing that I really love, is that this isn't, you know, just some you know, product manager or group of product managers sitting around a cafe in Silicon Valley saying, how can we work together? This is a pull from the CFO's, the controllers of the world, that need a more holistic view of their company's financial position. They need a more real time view, and they need to have more confidence and trust in the numbers that they're getting. And because of that's sort of pushed these financial leaders to ask for, Hey, how do we get all of this information into one place so that I can make a decision? I think you asked about what's changing with this CFO. One of the things that we're starting to see shifting is that because of all the craziness with the continued pandemic, all the various, disruptions that we've seen. There is this this idea that like there's so much uncertainty that for, you know, the office of the CFO now, their main job is moved away from, adding a half a point of profitability here or shaving off a, half a head count here, you know, they've moved away from those sort of really speeds and feeds or tactical, goals. And the bigger goal now is resiliency. How do I make it so that my financial operation is able to cope with whatever comes next in terms of some, you know, global earth shattering, you know, crazy event. That's really the idea now. And if that's the idea what's really exciting about that is that it, it moves you toward this idea that what I really need is to be able to make decisions fast, right? Because I need to be able to move this company, and protect the people in it, protecting my shareholders. Right. And protect my, even my customers. I want to protect the, these constituencies and the way I'm able to do that is by moving fast. And the only way to do that is to, you know, manage the data such that you're getting actionable insights at speed. it's really about utilizing the tools AI machine learning, RPA, all these sort of advanced technologies, utilizing that to, to drive, not, you know, a 10th of a point of. On this or that but driving resiliency, driving speed and agility and ultimately business resiliency. Here on the invisible vault, many of our CFOs are coming in. And one of the questions that we ask is what was your path to CFO? And traditionally w you know, you would expect that the path of CFO is going to be through FP&A. That is just not been the case in the group that we've talked to. And they've come from treasury. They come from a business management location.
Daniel: they come from operations.
And so when you talk about convergence and the real kind of breakdown of these different silos and finding technologies that enables CFOs to be more strategic, that really is starting to make sense. And the CFO today wants to be agile. And as you said, make sure the company is resilient to anything that comes their way and have those actionable insights to drive growth based on the data presented. Let's talk a little bit about that. So you really opened the door to a very exciting part of the Invisible Vault and it's called cash crossroads.
Daniel: At the top of our mind, thinking of resiliency, what do you see happening differently in data management today than in the past five years, Kevin?
Kevin: I think ultimately what's been happening within data management is one, a realization that most of your business problems. Most. And I would say all, but like, as an analyst, you don't want to, you don't want to paint yourself in a place like that. But like, the vast majority of business problems or even business processes come down to data management.
It's either the fact that, you know, we're not getting data into the, you know, financial operations space. Either the tools within, In a sort of efficient time or efficient manner, or the system itself is not efficient. Right? I've got a 17 different ERPs. I've got another, you know, couple dozen sort of order management solutions. I got a dozen CRM solutions. I got another dozen, you know, financial close or reconciliation solutions. So even that right. That problem. So, in that space you have a data management issue. So whether it's moving data into it or sort of moving data between and sort of collating and combining all that data, so you can get a picture. And then the other problem is it comes at the other end, right. Getting data out of the financial operation. So, you know, saying, okay, all right this event happened. We got these 2000 invoices. Okay. We were able to put them all together, match them up. Right. And we were able to, you know, sort of, record them back to our GL, Hey, we're good. What actually happened? Why didn't we get 10,000 of these things? How come we didn't get 11,000? How come we only got, you know, this number? How come we've got this big number, right? So the why behind the data. Getting to an understanding of what's, you know, what this data means for my company, for my, my, my shareholders for my customers. Right. What is it telling me? And so that's the other sort of data problem. And then there's like a overarching data problem, which is the security of it. Right? So when you see all of these sort of data management issues you know, what you realize is that it's the companies that have invested in the infrastructure to efficiently manage, you know, their data. Those are the ones that are agile, right? Those are the ones that have shortened the time between a business event and a decision. Right. They've shortened that time so that you know, the CFO, the board, now they have that information that they need rock solid information even across a very complex business environment, they have information that they need to make the decisions, you know, the M&A decisions, the global expansion decisions to, to add a new product line to move toward a digital subscription model. These kinds of big decisions demand a smooth agile data management environment. And I said, like I said, it's the ones that have invested in that and sort of see that those are the ones that, that ultimately have an advantage in these uncertain times.
Daniel: Well, talking a lot about data and what we're talking about here is all of the different inputs. Ross Tannenbaum over at Avalara came over from a investment banker background in, is working in a company, focusing on tax. In his mind, you have to have all of those data points at your fingertips, so that you are able to make those decisions about what makes and moves your business. And that's exactly what you just shared with us. So what would be your guidance than. If you were advising a CFO on making tech decisions, and if you're talking about being resilient and data-driven, how do you do that? You just talked about thousands of payments. You talked about 17 ERPs. That's a lot of technology just to open the door. How do you make that all come together?
Kevin: So one of the things noticed in the recorded through some of the various surveys that we've done here at IVC is that there's typically a gap between the office of the CFO and the IT department. Even though the CIO and the CFO, they may sit together at lunch, but there, there are operations in there staffs can be miles apart. Because, the CIO and IT ethos is about keeping the data, you know, sort of safe, keeping it in one place. So we have control and we can keep it safe. But now, you know, if you flip the page and you look at the CFO is giving asked every day to be flexible, right. To react to these macro economic, events. Right. we were at the conferences the other day, and we're saying, okay, maybe we should do like a game of bingo game. Every time someone says unprecedented. Right because we were running out of things to use that word on. Because every day there's like some new unprecedented thing. And that's the world that the CFO has to move in. Right. We're talking, you know, capital volatility, you know, geopolitical, social volatility. He's got a supply chain, you know, that he's got to manage all those things. He's got you know, sort of, inventory and procurement issues that that he, that keeps, it, keeps him up at night. So every day he's being asked to be agile. And then the IT guys are sitting there, sort of hoarding all this data, keeping it safe. So what you end up with is a bit of a gap in, in between those organizations. I say all that to say this what we're seeing is that the companies that are learning how to thrive in this new precedented reality, right are the ones that have worked to close that gap between finance and IT. Right. They've worked to add more data management, data science capabilities on the office of the CFO, right. They worked to bring in and implement software that has a low code, no code kind of, ability to take some of the weight of, you know, development off of the IT team. The IT teams themselves have become entrepreneurial making a lot of their own applications, right, based on these platforms that they've, that they become accustomed to. Or sort of bringing in tech data from other around ecosystem around those platforms that they've invested in. So this idea now is that, you know, bringing these two worlds together, has all sorts of benefits. There are thicker walls between them. So it's harder to get them to work together, but in smaller companies we've seen, you know, the office of the CFO, and the IT, the head of IT be the same person, right. it's become that essential, to the function of the, office of the CFO or the CFO's job.
Daniel: I mean, again, there's that convergence in how the CFO and the CTO are making decisions about the strategic future of the company. And in order to enable the technologies one has to be guided a bit by the CFO and by the CTO in terms of really making the right decision. There's so many specialized technologies doing the jobs across the finance and treasury organizations. And as you said, the silos are coming down. You mentioned AI. You mentioned payments machine learning. And what I'm wondering about is the APIs that are those connectors that are really helping things come together and optimize workflows. You know, there's not one solution Kevin, that will fix every problem or really streamline every operation. How are you seeing APIs used in this instance?
Kevin: So we talked about the worlds, the walls coming down, the actual mechanism is it, you know, sort of a sledgehammer, right? It's it's a little bit of a software called an API. Right. And those APIs work to shuttle data between applications. Right. And they can be built in such a way, right, at such a deep level to expose, you know, very detailed information to, the solutions that are attached to it. Right? So you can have a situation where the treasurer is looking, at their their dashboard. And they're seeing a ticker go by with all the relevant, market information. And that's coming in from marketplace, provider via an API. He's also looking at his line of, or he's looking at his, bank accounts and those are coming in from, 10, 15, 20, 30, a hundred different bank accounts via APIs. So he's got all this information. He says he's sitting at head of, of this river of information and that river, the plumbing, bringing all that information to him are the APIs. So what we're finding is that companies that are working to efficiently move data quickly through the process right. from transaction to decision. Or from transaction to insight and an insight to decision, the ones that are working to build the infrastructure are the ones that are learning to thrive in this market. And that infrastructure is oftentimes built upon various APIs, right? Rest APIs. And even in some of the cases, some newer API, APIs, like graph, graph, API APIs, and those sorts of things. So, when you're talking to APIs what you're really talking about is the plumbing for data. And if that is the new oil and some folks even say that data is like the new water it's even more essential to business, right? If that's the case. And, the tools used to move that, you know, that precious data around those become really important. So what we find is that, you know, companies that have built out their platform on the software side, and have worked to build out their API structure their, change notes API updates and all of those things that he have to do to maintain, you know, sort of the plumbing that allow developers to sort of come in and hook up to it. It's those software developers that are winning the day.
Daniel: Some great insights there, Kevin, and I think it takes us to the next segment called The Playbook.
Daniel: During this segment, we talk a little bit about how you measure growth and you are starting to provide some guidance on what the CFO and CTO need to do in order to create a solution to enable their organization to be resilient. So during The Playbook, let's think about this as kind of a a mini guidance course on how people are putting together opportunities to be resilient. So one of the areas you've talked about at the beginning of the hour was people aren't just focusing on that half a percent or shaving off a FT here. They really want to be resilient. They want to grow the company. But a 2% growth margin really isn't the KPI they're measuring these days. So Kevin, tell me based on that, how are you becoming or offering guidance to the CFO to be a strategic partner, to the business?
Kevin: So what we try to do here at IDC is, try to up level their thinking when it comes to what's possible. Right. What's possible of course is through the marriage of advanced technologies like big data analytics, like, AI and ML you know, what's possible when you put all those things together. Of course you'll get some productivity gains and those sorts of things. What's also possible is to understand that you can influence as you know, as the back office that your productivity and in your sort of efficiency can even have a effect on the customer satisfaction, right. And customer retention. And also it can have an effect on the employee experience, right? So there's a people aspect to to the, you know, to the outcome of the office of the CFO. Right. You know, sort of, you see this a lot in the banking space, right? For example, financial services where your outcome of course is, you know, being able to close the books faster, you know, and those sorts of things, but it also means that you're able to get information about the customer, right? About the patterns that a pattern of behavior that the customer is exhibited. Right. Get that to the decision makers. or, get that to the, sales team and the customer relationship manager team. so that they can act on that, information and provide a more, a richer experience for the clients, and build a deeper relationship. you see it in the AR space, right? Accounts receivable, where, having efficiency in the collection process means that strategic vendor who routinely pays 50 days out because that's how their cycle works, doesn't get the same, dunning letter, that a non strategic vendor might get. Right. So adding a personal, personalized touch, on the payment side, being able to accept payments in whatever rail whichever format, you know, that helps the client, be efficient, right? So there's all of these sorts of human aspects to, to bringing efficiency to the office of the CFO, Such that what I've been pushing, and I'm not going to say, like, across the board at IDC, we're doing this kind of thing, but what I've been pushing a lot of the CFOs I talk with, is to consider. Yeah. there are, you know, profitability and liquidity measures that you have to keep an eye on. You're going to have to keep an eye on those things. That's core to the job. But also include you know, customer retention as part of your KPIs things that you monitor and manage. Also include employee experience. Lost invoice on the AP side can really, you know, sort of impact the Goodwill and the relationship of your customer. Misalignment on the procurement side, right. Can really impact the treasury sorta function. And ultimately, the supplier that you're working for. And sour the relationship there. Right. We see that a lot with misalignment when it comes to which currency the contracts in which one works best for the treasurer. Right. So there are all sorts of ways that the office of the CFO has impact on both his, the employees and the entire business, and then also the customer. So going forward, what I've been sort of pushing is that, Hey let's look at the people aspect and let's look at what what an efficient financial operation, how that can impact you know, sort of the people aspect of the business.
Daniel: So Kevin, you just talked about the people aspect of the business, and it's no surprise to me. Again, as many of the CFOs who have joined the Invisible Vault have had a similar guidance that they are focusing people not only their customers, but also their employees. And what I'm curious about here is that you mentioned liquidity if you're not efficient or effective with that, you're unable to maybe have the additional resources to invest in, a project that your company cares about, or to see what resources you might need in the event that you have to expand your headcount in order to grow a new part of the business that you decided would be strategic. So. While that 2% KPI on the bottom line is not the formula that CFOs should be looking at today that they really need to look at the bigger picture. Are there ways to make their opportunities more predictable? And how are you providing guidance on that?
Kevin: yeah, look, you know, for every company the uncertainty that we've been experiencing when it comes to all the various things that are happening out there, it really has put a spotlight on cash and liquidity. Right. A lot of the things that we've been talking about, all the great, you know, software and great technology, great innovations that you know, are out there available to the office of the CFO, the advancements that are there now because of those things the doors aren't open to you. If you don't have your cash and liquidity, in line to, to sort of take advantage of those things, right. To invest in those steps. This is a problem that isn't going away. We have data that points to, a large number of companies that don't have visibility into cash and no more than like 60 days out. Right. And just consider running your own household. If you didn't know, you know, what kind of cash you're going to have in two months. Right. this idea that a lot of, you know, large companies, they have a lot of you know, sophistication when it comes to these kinds of things. It's not always the case. And then of course with with smaller companies, they may not have the, you know, sophistication, but they also may not have the wherewithal, right. The reserves, the cash on hand to, weather, any sort of shocks. You know, to the system. So, one of the things that we saw in 2020, unfortunately, especially for smaller companies, is that liquidity, cash and liquidity was the thing that in the end, got them to a point where either they had to do like massive layoffs, which are, you know, just sad across the board. or they had to, close their doors and go out of business. So, cash and liquidity is especially in that sort of mid market thing, it's life or death. So when you started talking about the role of, you know, what you're doing around that, I think you have to at very least bring in some level of, focus when it comes to inflows and outflows, right? So you need to get a handle on every dollar that goes out and you need to have some visibility to every dollar that comes in, you know, in the business. And the treasury solution actually is a pretty good home to work control tower for that kind of thing. Of course your ERP could serve in that fashion. But again you know, the treasury solution also will bring to bear cash management, capabilities, some forecasting some scenario building, right? Those sorts of things that really sort of making a home for that kind of thing. So what we saw is that there was a a bounce in the amount of when things that really uncertain. There was actually a bounce in the amount of financial applications companies were investing in. Many other, you know, sort of investment, projects were scuttled in favor of transforming the financial operation. And the reason is because cash had become so incredibly important. And a lot of companies realize they did not have the view of their cash that they needed. Or even thought that they had, you know, so it was really, it really was an eye opening situation.
Daniel: So you really anticipated one of my questions, which is, you know, the difference between, as you said, an ERP, like a system of record and maybe something more specialized and focused as a system of intelligence. And in this case that crisis and the volatility that continues to happen, it seems like with more frequency and more intensity really requires something more critical. How do you advise your clients on where to prioritize their investment? What is your guidance there?
Kevin: So, this is an important question. So if you've gotta put your, best foot forward is probably gonna start in a, FP and A space. It'll vary, right? It'll start in the world that goes into helping companies look forward. Right. So many companies have had to look into the future. And it sort of look into the crystal ball with, you know, like a spreadsheet and a dream, you know, that is not, you know, that is not what you're looking for. So what we found is that a lot of companies will invest first in that, FP and A kind of area. and of course it's the cash management cash forecasting piece is part of that in my mind. Right. So we saw you know, the treasury solutions that had that grow. Of course we saw a lot of the FP and A, proper solutions, that had that ability to do sort of scenario planning and all those kinds of things grow pretty rapidly. And again, it's because the end of the day, what you have to do in order to figure out what's going to happen is that you don't know what's going to happen, but you need to model out even like, at this point, world war, like you need to have a model for like, what if we all go to war tomorrow? Well, that kind of thing, because, you know, 20 years ago, maybe that was like pretty farfetched. You wouldn't waste your time on it. But now you have to do that. So look, if I have to, as a CFO, have to invest in all these different models and have to invest in this, you know, in doing this kind of stuff to help me look forward. If I have to do that, I can't just throw an unlimited amount of people at that. FP and A teams are typically pretty small. Treasury teams are typically pretty small, right. You know, it's 3, 4, 5 people. I need tools. I need tools to help me do that. Those tools need to be sort of, infused with automation and machine learning to, to grab data from the various different parts of the business, and then bring that in so we can analyze it right. and what I'm saying is the idea of, you know, shortening that time to decision shortening, that time to insight. And I do know this one of the first stops where for a lot of CFOs, when they at the height of the pandemic, right, that, that sort of Q1 of 2021, you know, no one knew what was going to happen, but everybody knew that it was pretty bad. And you know, it was just going to get worse for a little while. You know, the first stop most of the time was to the FP and A team. So, you know, if you're looking for a place to, park your first investment you probably looking for, you know, FP and A, treasury these things are typically things that you don't have to rip out your ERP or your system of record. You don't need to do a new chart of accounts. You can sort of stick them on top of that, connect them to them properly with all the APIs and, you you can, be off and running pretty quickly.
Daniel: I think that last statement that you made was very interesting. And on point it's a matter of the APIs, giving financial leaders the flexibility to really leverage what they have at hand. If they've made some investment in already in some steps towards digital transformation, that there are tools that they can enable that there's processes and smart workflows that they can generate by connecting various new tools or existing tools with with APIs. So that's a great segue. And for this last section called Report From the Future.
Daniel: Kevin, what does the next generation of finance leaders need to be successful?
Kevin: There's going to be a need for a new skillset. I think one of the things that we're going to see in the very near future is more data science and data management skills working their way into the job board postings and those sorts of things. there's going to be a a deeper need for, analytics and those sorts of things out of the vendor community. So going forward, you're going to see a lot of companies doing some M and A in the area. of, BI, data analysis tools. there's a lot of scope of companies that's what they do. They're sort of big data management and AI engines that are looking for a problem to solve. I'm working with a few of them. And many of them now migrating toward the office of the CFO for as places of growth for them, because there are so many sort of problems there to be solved. So, you're going to see a growth when it comes to, the amount of data management skills that are needed to to work in the office of the CFO or to be a treasurer. And then you're also gonna see the tooling skewed toward data analytics, data analysis, and those sorts of things. I think one of on the technology front, too in terms of how the software sort of put together, you're going to see a lot more payment capabilities work themselves into the actual application, right in situ right. In the work flow. You're going to be seeing payment capabilities, bringing visibility from, you know, payments that are out there, you know, about to settle or getting information from the banks and putting that, you know, right there at the front of, various parts of the office of the CFO, whether it's you know, a procurement person or, you know, an AR person or treasurer. Some of the folks that are there you know, payment capabilities will be, key as well. And I think we'll just see more and more automation. We're going to see more and more automation via RPAs and in AI such that, some of the the real, you know, sort of nitty gritty parts of, of the financial operation. Some of the, you know, the things that people have typically just thrown a lot of people at, so like invoice ingestion, or just getting the invoice in, you know, getting the POS, you know, sort of into the system. We're going to see a lot of automation focus there getting data from your, you know, 200, bank accounts. You're gonna see a lot of bank connectivity, you know, focus there. And a lot of automation capabilities being able to pull that data and put that data in front of the decision makers at speed and in real time. So that's kind of where I see the future going.
Daniel: I think you're right. I certainly, from the discussion that we've had today and I, one prediction that you made is that the skillset that's going to be for the future is the merger converting. At the enterprise level of the CFO and the ITC. It seems to me very logical that the new Chief Financial and Technology Officer be a real piece of the enterprise landscape. And you also mentioned banks. We hardly scratched the surface of where banks and technology come in. So I think we'll have to reserve that for a future conversation. It's been a real pleasure having you today. Kevin, join us here on the Invisible Vault.
Kevin: Thank you.
Daniel: We really did learn quite a lot from you and got a glimpse into what people need to do to be more strategic and successful as well as what they should be thinking about and how the future operations are going to unfold and where technology fits in.
So, thanks again.
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