Coupa Inspire CFO Panel: Learning from the Best CFOs
What’s on CFOs’ minds? Plenty, according to “The Strategic CFO in a Rapidly Changing World,” a study by The Economist Intelligence Unit (EIU) sponsored by Coupa. There’s the deluge of data, which is driving an increased focus on automation and cross functional collaboration as organizations seek to prepare to use artificial intelligence. There’s the quest for the perfect set of metrics to help drive the business forward. And, there’s the nagging frustration, chronicled in the EIU study, of still not having visibility and control over all of the organization’s spending. Over 60 percent of the 507 global finance executives surveyed by the EIU reported this was the case, a situation that left unaddressed, threatens to undermine efforts to move forward on other fronts.
In a panel discussion with JR Miller, Senior VP of Finance and Controller at the Leukemia and Lymphoma Society; Todd Dooley, CFO of BDP International, and Mark Dotinga CFO at Lagunitas Brewing Company at our recent Inspire conference, we had the opportunity to hear firsthand how finance leaders who have deployed Coupa are tackling some of these challenges. Here are some of their thoughts.
Moderator: As a finance leader, what are some of the top metrics you’re looking at within your business?
JR: As a nonprofit, one of the top metrics that we look at is expenses as a percent of revenue. Nonprofits are measured on that through Charity Navigator, so that's very important to us.
Another one is measuring revenue campaigns towards budget attainment. The last is being responsible for treasury. Since we receive a lot of temporary, restricted funding as well as unrestricted funding, we need to measure unrestricted cash flow for our organization.
Mark: The first thing we look at it is market share. Our mission is to be the number one IPA in the universe. The second one is return on investors' capital. A lot of leaders look at EBIT and margins, but they forget to consider how much of investors' capital put behind it.
Todd: Cash. To grow cash, we use four strategies: grow revenue, drive productivity, ensure controllership, and develop people. Within each one of those, there are metrics for that success. For revenue, I'm really focused on working capital. We're a logistics business. We're a bank to a lot of companies. So, how do we structure our terms? How do we structure payments globally?
Productivity is where Coupa and other tools come into play. From a people standpoint, I worry about turnover. If we're not developing the next round of leaders, we're shorting the company of the intellectual capital that they bring, as well as incurring turnover costs.
Moderator: I’m sure tracking those metrics involves working very closely with other departments within your organization. How do you influence people outside your department?
Todd: It took me a long time to learn how to influence appropriately. Usually, I could get to my own answer really quickly. Now, it's about learning what's in it for other people. What do they care about? Why should they care about it? It means slowing down my pace, so I can have more meaningful conversations.
Mark: You first want to be credible. To influence brewers, at least make sure you understand the beer making process. That makes you ten times more likely to have a constructive conversation.
JR: It depends on what's going on in the organization. If it’s a compliance issue, it’s reminding people why you have to do things a certain way. In other situations, it’s aligning people around common goals, which in our case is eradicating blood cancers. So, tying it back to that.
Moderator: How are you handling the massive inflow of data and distilling it to add value to your organizations?
JR: We just hired a new CIO recently, to make sure we were capturing the right data and we could act on it.
We got that opportunity with all the different natural disasters last year--the hurricanes that impacted Texas, Florida, and Puerto Rico, and the wildfires in Southern California.
We aligned around doing an outreach to help blood cancer patients in affected areas pay their bills. We found that about 80 percent of the patients that came to us as a result of that didn't know the Leukemia and Lymphoma Society.
We learned that we’re not reaching the right patients in certain areas, so that’s the next problem we want to solve. It’s a constantly evolving situation where we’re all learning.
Mark: I think it's about creating business process owners. In finance, you can say, "Let's look at our freight costs, which are higher than expected," but the person that owns freight needs to track this against their own budget and KPIs, because you can’t manage everything.
Moderator: What would you consider your core technology stack in finance today?
Todd: ERPs are not your end all, be all solutions but they are the foundation. Then I'm looking to install solutions on top of it, like a procure to pay. After I've done that, then I'm thinking about more specific software applications like an RPA engine, workflow, or OCR.
There are four or five different parameters you have to think your way through as you build the stack. What's your master data management strategy? What is the single source of truth? How do I define my key metrics globally? What are the most vital metrics? If you have more than 20 metrics, you probably have too many. People can't act on that many.
Moderator: Let me ask you about this report that we worked on with The Economist Intelligence Unit. One of the key findings was that only 39 percent of CFOs feel like they have complete visibility into their spend. How does this number strike you?
JR: Before Coupa, I knew what my spend was when the invoice arrived in our national office. We're decentralized, with 56 chapters across the US. They're the ones who are ordering, and invoices are flowing in through the chapters. By the time they get to the central office, you're just paying the bills. We'd forecast on historical spend and budgets. So, no, it doesn't surprise me.
Mark: We were also still waiting for the invoices to see what we actually spent. Now, with Coupa, we can actually make some accruals. We're now doing our closing process in three days instead of 15 days. I think that helps the management team take faster actions. It's still hard. It's first understanding what spend you can manage and focusing first on that.
Todd: At, H&R Block, we had really good spend visibility. At BDP, not so much. That’s part of the journey that we're going to be on.
I think it's a function of your company culture. Are you a big company that has lots of policies and processes? Are you more of a startup or entrepreneurial type of environment? What do you want to be when you grow up?
For BDP, it's not about getting to three-way invoice matching. We need to provide tools to enable people to do their jobs in 40 different countries. These are entrepreneurial offices in a variety of states of maturity. We’ve got to have something simple, but with global scale behind it.
Moderator: What advice would you have for finance professionals to help them grow their careers and perhaps be sitting on a panel like this some day?
JR: The advice I was given early on was always try to make your boss' job easier. That’s still good advice. Have intellectual curiosity. Always be willing to ask questions, whether you've been in the organization a long time or you're new.
Be curious about what other departments are doing, what the organization is doing, what other organizations are doing.
Todd: It's not about people knowing what you know, but it's about how you make them feel. At the end of the day, you're working with smart people with deep functional knowledge. It's how you relate to others and influence them that makes the difference between being the leader and being the manager.
Mark: For me, it's about continually having new experiences--going abroad, that's an experience. Learning a new language. Leading a team. Sometimes that means taking a side step, and not just making your promotions year after year, but taking time to develop yourself, to become what you want to be in life.
Moderator: What do you see for the future of the finance function five years out?
Todd: What you do really doesn't change. Finance, in my opinion, will always use facts and figures to influence strategy and operations. How you do it though, will evolve rather rapidly.