In this episode, the Head of Global Presales at Kyriba, Tom Gavaghan discusses the CFO’s focus in the New Year on operational continuity, being more prescriptive, the convergence of finance and IT and how to leverage AI in working capital management.
In this episode, the Head of Global Presales at Kyriba, Tom Gavaghan discusses the CFO’s focus in the New Year on operational continuity, being more prescriptive, the convergence of finance and IT and how to leverage AI in working capital management.
Welcome to Finance to Futurist, a Sidetrade podcast series on how innovation data and AI are disrupting order-to-cash.
Natalie Silverman:Hi, this is Natalie Silverman for Sidetrade. Welcome to Finance to Futurist. On today's episode, we're kicking off the new year with the CFO's focus on operational continuity being more prescriptive, the convergence of finance and IT and how to leverage AI in working capital management. Please welcome the Head of Global Presales at Kyriba, Tom Gavaghan. Good morning, Tom and thanks for sitting down for Finance to Futurist.
Tom Gavaghan:Hey, Natalie, thanks so much for having me on.
Natalie Silverman:We love having new guests in the same industry and certainly dealing with the same types of leaders in the finance space. So excited to have you here.
Tom Gavaghan:Yeah, I'm excited to be here. I have been following Sidetrade and the market and also the this podcast and seeing the success it's having.
Natalie Silverman:Oh, well, we really appreciate it here. So again, I always like to start off with a very easy question. So we'd love to know more about yourself, your background and how you got to Kyriba.
Tom Gavaghan:Yeah, sure. So I lead our global presales organization at Kyriba. We're an enterprise liquidity management platform, focused on treasury payments, risk management, and working capital. In my role is in presales, I lead the solution engineering and RFP and technical sales teams within our group. We work directly with the market, potential buyers and a lot with our existing customer base to identify solutions and offer them to meet those kinds of needs, that they have them in treasury risk payments, and working capital. Currently, we have over 2000 customers on the platform, varying shapes and sizes and around the world using the technology. I've been in the team for nine years, this will be my ninth year and prior have come from other providers in the space and have held roles in product management, implementation support, but presales is where my heart is, quite frankly.
Natalie Silverman:Love it. Well, you've come to the right place, we're going to talk a little bit about probably things that you know very well and are very, you know, close to your heart. So let's get right into it. My first question, I wanted to talk a little bit about CFOs. And a top analyst, and I'm not going to name names, but you'll probably know who this is. They actually polled CFOs to ask them, you know, what are their top three most difficult tasks over the next 12 months? And you know, one of them was certainly something I think we're all feeling which is hiring and retaining staff, which was the highest. But number two, which I thought was interesting was forecasting at 36% of CFO respondents. I wanted to see if that jives with what you're seeing as a top challenge from your perspective?
Tom Gavaghan:Yeah, for sure. It is, the surprising part for me would actually be that retaining staff has jumped that. I guess it's not surprising. It's just the first time in a while following these, you know, analyst reports, following some of the reporting that comes out of the Big Four, you know, cash forecasting has been a top priority for a long time. And I think it's this you know, pursuit of a perfect world that CFOs are ultimately trying to get to and their organization are trying to get to. It isn't surprising that right now retaining staff and and hiring are a priority just because of the disruption that has happened over the past few years. But forecasting is a is a constant driving need across the board and the CFO organization. You know, when we look at it today, we kind of break it down with the objective of the CFO is ultimately enforcing discipline of the financial discipline and driving the profitable growth of the organization. And we kind of break that down further to really four key focus areas, then, and that's maintaining EBITA, reducing the risk of the company hitting those free cash flow targets. And then those operational continuity, forecasting plays into so much of that and giving CFOs and their organization access to data in a timely way with flexibility to really match the scenarios that they need to manage right now. There's so much uncertainty and volatility that there is this on demand real time need of being able to ascertain where we're at now. And if this happens, then what will happen kind of scenario based modeling that we're just seeing demand from throughout the the market.
Natalie Silverman:I think that segues nicely, and I'm going to skip ahead a little bit because you mentioned, obviously we all know, cash is king, right? But in a way, it seems like it's shifting a little bit and you just, you know, made reference to this that it seems again, from our perspective to that data is actually becoming king. And I know, you know, both Sidetrade and Kyriba. We're moving in that direction. We've certainly leverage things like predictive analytics. But now it seems like that's even shifting to what we're calling prescriptive analytics. So again, from your perspective, how is the data landscape changed for you? And why is data so imperative to finance leaders?
Tom Gavaghan:Yeah, absolutely. It's hard for me to say that cash isn't king, right? It's not about who's king and who's not right, but it's still it's vitally important, but I totally agree that right now that there is such a value placed on data. I mean, really, when I look at the market, it's not about cash being king. It's really about liquidity being king, in my opinion, as it relates to finance, it's more than just cash. Right now you're seeing rising interest rates, you're seeing credit crunching. And because of that, there's just this heightened focus with CFOs, in terms of maintaining that solvency and access to that liquidity and where it's at, and how much do we have, and how quickly can I get to it is really such a key focus. And cash is obviously a key elements to it. But underneath of all of that is that data that sits behind all of the different sources of liquidity. And I think there's an immense amount of value being placed upon that now in terms of the ability to use that information to better direct and decide and understand where we're at, and where we're going in that forecast. And in that planning process. And that data is significant. When you boil it down the amount of transaction, the amount of cash flow that companies are managing the amount of bank balances and bank accounts and transactions that the manages is significant compounds every single day. But inside of that data landscape is so much valuable information that you can use advanced calculations, advanced mathematical modeling, to derive trends and identify opportunities and ultimately prescribe it timely and efficient way you know where that liquidity needs to go.
Natalie Silverman:I'm going to go back to something you just said around liquidity. And you talked a bit about Kyriba being kind of in that liquidity management space. And I wanted to get your thoughts because more organizations seem to be thinking about this idea of the office of the CFO to drive efficiencies across treasury, AP and AR and obviously, Sidetrade, we play in that AR space. Let's talk a little bit about your thoughts on combining those three capabilities, Treasury, AP and AR, and how they're becoming more interlocked and having more overlap around working capital, or what you mentioned, liquidity management.
Tom Gavaghan:Yeah, I think it's great to see the convergence of these technologies in this space that really support all of these different sources of liquidity or sources of working capital, ultimately, that sit underneath of the CFO, the AP, the ARs and others. And so what we see objectively, right is that in our space, I think that the cash was king and cash, I guess we can still say cash is king, but there was the only focus of the things that came from our space, if you will, and that's the solutions, we provide it. But now you see this convergence of the working capital. And it's not just about cash. And it's about being able to easily integrate the different back to that data, and all those different sources of data in a timely and efficient way, such that the office of the CFO has the information that they need. You know, a lot of times you think, Okay, well that might exist in the ERP. And maybe it does for a smaller company that might run you know, a smaller ERP product. But as organizations scale, they do that in an organic and inorganic ways. And as a result of it, you end up with a pretty disparate technology landscape. And I think now they look at technologies like ours, like you Sidetrade, Kyriba, and how they can easily pull the information together, get the information synchronized, because it's not just about cash. And it's not just about AR, right. It's not just about AP, but it's about getting in and accessing all those things. So that, that the CFO that their organization can get better representation of the overall liquidity and the working capital impact of that liquidity, what cash is coming in, how quick can I get it? What cash is going out? How long can I keep it before it goes out?
Natalie Silverman:I love that. And you're absolutely right. I do think there is this convergence that's coming. And this is my favorite time of the year, we like to make predictions of what's coming next. And so this is going to segue nicely into my next question, love to talk to you and hear your thoughts on the key priorities of the CFO.
Tom Gavaghan:Timely question or somewhat timely, because, you know, it was over the summer where we knew the economy where it was going. And I think over the summer, I was traveling and had some time to kind of like think about it and how it impacts what we do here and what I do. And, you know, I kind of got the ability to to objectively kind of look at things at the end of the day, right? The the objectives of the CFO don't change, we boil it down to they're responsible for enforcing that financial discipline, driving growth, through good times and through bad times. Right. The challenges, obviously, as we all know them, right are the inflation impact and the rising interest rate and the currency volatility and the supply chain disruptions, those just make that objective, more challenging. And so when we boil down those objectives of optimizing EBITA, reducing the risk of the organization, hitting those free cash flow targets, and softly hitting them, hopefully, and operational continuity. They're just increasingly impacted now, and much more uncertain, generally because of the volatility and all those areas, like I just talked about. So I think those are the still the areas of focus, I just think that it's just a different lens, maybe that they're being looked through.
Natalie Silverman:All right, so last question for you want to keep it a pretty easy but let's call this the Nostradamus question. We're Finance to Futurist here, and so we'd like to talk about new technology trends. So I figured, let's ask you, where do you think finance leaders need to be looking at adopting in terms of new technology for next year?
Tom Gavaghan:Boy, I could go on for a while, but I won't, I'll keep it brief. I believe, if I reflect on nine years of kind of being in this space directly, one of the things I'm observing, it's very noticeable is the least the word convergence, again, of finance in it. And I think that's leading to a drive a demand and a need in the market of Big Data, Data Management. And I think then, what was the ability to do that, then you layer on the capabilities thereafter? What is that analytics insights, being able to, you know, make sense of all that information, because there's a lot of it, and then also you putting that information to use in the way of artificial intelligence and being more prescriptive. So I know that this has been, you know, we would have had this conversation last year, and probably the year before, and maybe the year before that, you know, I think AI and artificial intelligence would have been the same, we would have said the same thing. I do believe now as we go into 2023, that this is more real than it has been. It's I think that the technologies are maturing, I think the modeling is maturing, I think there is this, again, this convergence of, you know, finance and statistics in it that are coming together to be able to kind of build, you know, really cutting edge and necessary technology to elevate the office of the CFO to the next level taking in the evolution that we're able to kind of support here. So I do put it in there, I do believe that we see the CFO organization becoming less reactive, more proactive, and the only way to do that is through harnessing that data, leveraging and being, you know, prescriptive with technologies not being just descriptive of here is a solution. And it tells you what you did know, you know, these solutions are built now to tell you what you should be doing, and helping direct with all of the variables in play, like we had talked about in this current time of economic uncertainty.
Natalie Silverman:Tom, that's really great insights. And I'm going to throw you one last curveball question just because I like to do that. And we haven't prepared this question. But on the back of what you just said around AI, and taking next steps towards additional data management and operational continuity there, what would you tell somebody or or an organization or prospect maybe that you're speaking with, that might be a little hesitant to think about things, you know, maybe AI is too futuristic for them, right? Or, again, maybe they're still leveraging Excel, which, you know, there's a lot of people out there that are maybe not ready to make the leap into things like machine learning, but what advice would you give them to even just maybe dip their toe towards getting to be a bit more automated, or maybe moving towards that AI piece that again, right now, they could be scared to change from the status quo of what's been working?
Tom Gavaghan:It's a great question. I think what, in my role, I'm fortunate enough to really get to work with and experience all different organizations and companies and the people that are there. And you have this very large bell curve of people, right, where the you have people that are very in technology, and investing in that and looking at the market in a different lens than say, those that are really just beholden to Excel. And honestly, that's our biggest competitor. And when I say our I mean Kyriba, but like, that's ultimately who we're competing against, usually are being compared to is that wonderful tool of Excel, which I have about 15 tabs open in front of me for various things. It's not going to go away anytime soon. That said to your question, it's something that I think is more necessary now than it has ever been. And I think it's because of the economic issues that we're facing. I think a lot of times have a knee jerk reaction in certain times like this, if you go back to the most recent economic downturn of '08 - '09, there's this this knee jerk reaction of cost reduction, obviously. And well, what do you cut? Well, you cut, you know, maybe technology, investments, things like that, that isn't going to help long term. And there's empirical evidence that shows that and studies out there, they can prove that actually, now is a time in which you have the ability to put in place technologies that reduce costs, ultimately, that can impact and have impact directly on the bottom line by saving cost elsewhere, where you would have to put bodies in order to support certain business functions and things like that. No, I do believe that there is that chiasm that has to be crossed between I am just using my Excel worksheets to I'm putting a lot of influence into the arms of a robot effectively to do these things. But there is a ability to crawl, walk and run with technologies today, technologies like our own, there's varying ways in which it can be deployed very easily because SaaS-based technologies are built that way, such that you can easily kind of transition yourself and experience the automation that you need to free up the resources that you need to free up while also providing the added benefits that technologies now provide to enhance you know, the use of that solution. Like when cars started getting GPS is directly involved. I don't need that I don't really need that. I know where I'm going. I could print out directions and now you can't live without it. So at some point in other you're going to have it it's better to do it and Now, it's more cost effective to do it now in our opinion, and it's also going to help you weather uncertainty. In these current times machines can gather and absorb data more quickly than us humans and they can make sense of it more quickly than us as well.
Natalie Silverman:Thanks, Tom for your insights into the future of finance. For Sidetrade, this is Natalie Silverman.
Conclusion:This has been another episode of Finance to Futurist, a Sidetrade podcast series. Make sure you catch every episode by subscribing to our podcast on Sidetrade.com or through your podcast platform of choice. Thanks so much for tuning in. This podcast is brought to you by Sidetrade, and this for general information purposes only. All rights reserved.