Last week was about events with attendee passion. First: 17,000+ hyped-up data geeks at the Tableau Conference. Then I find myself in Nashville, amidst 3,000+ equally passionate... CFOs?
During my sit-down with Sage Intacct Managing Director and EVP Rob Reid, I asked him about that unlikely accomplishment. Why are CFOs so passionate about Sage Intacct? Reid:
It's actually part of our secret sauce. The way we approach the marketplace is always from the customer view and talking to customers. We're relentless on interviewing them and understanding what their challenges are, their business challenges.
Why AI is turning the CFO's world upside down
The same topic came up during my talk with Sage Intacct CTO Aaron Harris. We were talking about the latest Sage Intacct product announcements, and how, for CFOs, enhancing functionality like allocations is every bit as exciting - if not moreso - than a new "AI" capability. Reid:
I agree. For almost my whole career, I was doing enterprise software and we were taught: look for the big challenges of corporations that go across the different departments. That's where you're going to find the most compelling, value-oriented solution.
But that doesn't mean AI doesn't matter. On the contrary:
I think AI has turned all that upside down. The way you could get to those big things is by pulling in information from every aspect and seeing the little things. And then the machine learns and learns and then voila, the big things can happen. But if you try to do it from the top down, AI doesn't know where it should be going. and what all the information is.
There's a better way of feeding machines data: from the bottom up.
Coming from the bottom up and attacking some of these smaller issues will then get more information into this system, and so the machine can really start learning faster and then voila, we're there.
As I told Reid, it's a good thing Sage Intacct is investing in this, because CFOs need that support more than ever. If they don't transform, they will become administrative relics. Reid's reaction?
When CFOs went to school, most of them weren't just trying to get an accounting degree. They really went for finance. That was really their aspiration. But what they found [in the workplace] is 80 percent of the time is on accounting, and 20 percent is on financing.
CFOs want to spent 80 percent of time on finance - and only 20 percent on accounting
That has to change:
What they've been telling us is we want to reverse that: "We want 80 percent on finance and only 20 percent on accounting." As we go in and solve and automate the accounting areas, now we're providing them with the capabilities to be wizards on the financial side.
Though AI-for-finance is still in an early stage, the ability to automate with Sage Intacct is already here. I heard that from customers in Nashville that spoke to their cloud ERP results. Lisa Schulz, Controller at Jobvite, addressed Reid's 80/20 point head-on:
We are shifting effort from 80 percent bookkeeping/transactional focus to 80 percent analytics and business-focused.
During our chat, I asked Schulz if this was a three to five year goal. She believes they can achieve that 80 percent shift much sooner than that. Reid agrees:
That should be, I would hope for her, between 18 and 24 months. We put out four major - not - minor - releases per year. Each of these is what enterprise companies used to do every 18 months.
On Financial Leadership 3.0, and the push for the continuous audit
Sage Intacct's technical push ties to their CFO enablement mission. Sage Intacct calls this next phase Finance Leadership 3.0 - and it's sure to impact CFO thinking with its radical twists. I had to ask Reid about arguably the most provocative keynote slide, via Aaron Harris:
— AccountingTechnology (@ATechcom) October 24, 2018
Reid contrasts Financial Leadership 3.0 with its predecessor:
Financial Leadership 2.0 was being able to take empirical data in real-time, and being able to make decisions. By having dashboards and reports come telling you about the state of the business, you can deal with that within the business.
Financial Leadership 3.0 ups the ante:
3.0 is all about predicting the future. 3.0 is telling you about the trends. It's forward-looking as opposed to in the moment. And literally, into the future, we're going to be able to tell organizations where they should make their next investment, where they put their next dollar or $10,000 or millions of dollars and why.
Sage's Intacct acquisition - rebutting the skeptics (including me)
For Intacct to fulfill this vision, they'll need bigtime product investment. That brings us to Sage. I admitted to Reid: I was initially skeptical of the acquisition. For Sage - it made sense. For Intacct customers? Given Intacct's passion for multi-tenancy - something Sage is not exactly famous for - and Intacct's laser focus on the CFO, was Sage really the right play?
Reid told me he shared my questions when Sage first wanted to meet to discuss the acquisition. But now, more than one year in, Reid has a different take. Reid also serves on Sage's Executive Committee, so he has the full organizational view:
If we had gone public, it would have been wildly successful, and we knew it... When Sage came in, we understood, just like you did, the value we would be providing to them. Obviously, they did a great job for taking us through the value of what they would bring to us.
One, what were we going to do with the IPO funds? We were going to go international. Sage is in 23 countries. I've rolled out three companies international, and I find going international harder than startup and scale-up. Going international is really tough, mainly because of the labor laws outside of the United States. Now we're going international; programs are in place.
Reid's comments echoed what I heard from Sage Intacct customers this year. Several told me the pace of product innovation has increased dramatically.
Sage told us, "We can invest in you more than you can invest in yourself if you're a public company"... There is such a long list of the investments that they have made. Again, being a public company, I've got to be careful about how much I say, but the customers that are telling you that they're seeing it, oh, boy, are they ever.
As my colleague Den Howlett wrote in Stephen Kelly ousted as Sage CEO after dismal results and faltering transformation, Sage has some monster challenges ahead - not the least of which is the need for a bold/savvy new CEO who can bring a difficult cloud transformation to fruition.
In my view, this poses some uncertainties for Intacct as well - until we see where the parent company is headed next, and the new leader's priorities. (Yes, I asked Reid if his hat was in the ring for such a role, with the expected decline-to-comment. I personally expect Reid to continue on the Sage Executive Committee and help guide from there).
Eliminating the close, as envisioned in Financial Leadership 3.0, is not yet a reality for Sage Intacct customers. For most, getting a close down to 3-5 days, or having a monthly close at all, still represents a huge, positive shift. Intacct AI capabilities like anomaly detection showcased at the keynote this year, which look to be impactful, are not yet generally available. But for Reid, you get there through the customer relationship. And plenty of Sage Intacct CFOs are on their way to that 80 percent finance role. Reid credits that back to Sage Intacct employees:
The fact that 100 percent of our employees get paid on customer satisfaction, it shows for all these customers.
End note: I also taped an event wrap podcast with diginomica contributor Brian Sommer: