There's no denying a CFO's job continues to become increasingly complex. The last thing that the office of the CFO needs is accounting and financial systems that fail to address critical business needs including compliance issues, an effective financial close process, complex business processes, and company growth. How do you know when it's the right time to upgrade your financial systems? How do you accurately assess your company's current and future needs, and find the right solution in the new age of cloud computing? Scott Travosos, CFO, Blue Shield of California discusses the tell-tale signs he knew it was time for a new accounting solution at his company, his path to Cloud-based systems, and ultimately the powerful impact that cloud accounting applications have had on his organization.
This Cloud Accounting Webinar video is from the Proformative webinar "A CFO Story: When It's Time to Upgrade Financial Systems & Do it Right - Hello Cloud Accounting" held on November 1, 2012. The webinar features presentations from Tom Brennan, VP, FinancialForce.com and Scott Travosos, CFO, Blue Shield of California.
Cloud Accounting Webinar
"We have a number of learning objectives today. One of the main elements is that you will come away from this with a better understanding of, well Cloud-based accounting and financial systems, but also when might be the right time for you and your company to consider looking at a new accounting and financial platform for yourselves. That's speaking as a four-time CFO myself.
That's a vexing issue that always seems to follow finance, accounting, and related folks around, "Are we on the right system? When's the right time to move to a new system?" Of course, "What's out there? What should I look for, how do I look for it, etc.?" We'd like to cover all of these issues today to the extent that we can.
Joining us today to help us in our quest, it's my pleasure to introduce actually two speakers. I'll introduce both of them right now. The first speaker will be Tom Brennan. Tom is the Vice President at Financial Force. Tom has over 20 years of experience in the financial software space, and is a pioneer in the application service provider or ASP market, serving as a founding board member of the ASP Industry Consortium.
Previously he was Vice President of Sales and Marketing at CODA, a developer of financial software for multinational companies. Tom went on to become Vice President of Sales and Marketing at the Taylor Group where he helped develop the firm into an award-winning Microsoft Business Solutions partner, and application service provider. He most recently served as President of Proactive, Inc. where he successfully launched the company's North American operations. Tom holds a BS in Accounting from Mount St. Mary's University and an MBA in Marketing and International Business from American University.
Joining Tom today will be Scott Travasos, who's the CFO of the Blue Shield of California Foundation. Prior to joining the Foundation, Scott served as controller and director for the global nonprofit, Business for Social Responsibility, a recognized leader in corporate sustainability strategy. Previously he founded and acted as Executive Director of Greater Goal, an international nonprofit that uses sports as a medium to build life skills for under-served youth.
He worked on projects on six continents and in countries such as China, Myanmar, Yemen, Brazil and South Africa. A sports enthusiast, Scott worked for the 1996 Olympics as President and Director of Finance for a professional soccer team and currently serves on the Board of Directors for the Bay Area Sport Organizing Committee. Scott holds a BA in Business and Communications from Wheaton College and an MBA from Lake Forest University. Tom and Scott, thanks so much for joining us today. Tom, I will ask you to take it away.
Tom: Okay. Well, thank you John and thank you everyone for attending today. Our agenda today is really broken into two parts. First I'm going to start off and I'm going to talk about when is it time to upgrade, and some of the reasons why you might change accounting systems. Then we're going to have Scott come in for the majority of the time and talk about his experience, the situation he was in at Blue Shield, why he made the change, and why he went to Cloud computing for his system.
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With that let's kind of go into the next section. To get myself organized for this Webinar today, as you probably heard just from my bio that I've been in the industry for quite a while and I've seen a lot of different reasons why people change systems, so I was looking for something to help structure all of my thoughts. Low and behold a friend and analyst Brian Summer had done a white paper on changing and evaluating accounting systems. He did a really nice job in structuring the reasons why people change.
What I'm going to do today is I'm going to use this framework from Brian to kind of lead us through the discussion. Some of the thoughts are certainly inspired by Brian, but also some of the experiences I've had that I'll sprinkle in throughout. Incidentally, if you're interested in getting the evaluation guide that he's done, we can make that available to you if you want to contact me for that.
Before we get going we mentioned there were going to be poll questions. One of the things that I talk to the analysts about quite a bit is the whole idea of accounting software churn. How often does it happen? How long to people keep their systems? Eventually there are some pretty natural turn points that I've seen in the industry over 30 years. What we thought we wanted to just do here to gauge our audience if you could go to the poll, John.
Tom: Take them to the poll (inaudible 00:04:26).
John: All right. Let's go ahead and launch the first polling question, which I'm doing right now. This question is very simply, how long have you been using your current accounting software? As I noted, if you're here for CPE credits you must take all three of the polls, but even if you're not we'd love to know this. It will be interesting statistically and we'll actually turn this around and show everyone when we get in the Q&A segment of today's webinar, so we can all see what our peers are doing on this front.
We'll go ahead and leave this out for another ten seconds or so. I'll also remind you that you can ask questions at any point in time via the question area of your Go to Webinar control panel. Okay, I think that's about it. I'll go ahead and close that down. Tom, we'll hand it back over to you at this point.
Tom: Great. Thanks, John. Let's go back one, here. The first category that Brian identified were business driven reasons to change. The situation here that I've seen over the years is fundamentally the app that you've got doesn't fit where you are today. It could be a number of different characteristics behind that.
The first one generally has to do with business profits. You might be a company that's grown quite a bit and you've got some systems that are not very automated, they're under automated or they might be manual. In fact, it's really still surprising to me how many times when we go into a company and they've got systems built on Excel or Microsoft Access. Excel is a great tool of course for a lot of things, but people have really built applications in it and of course there are a lot of issues with that related to control and all kinds of other things in volumes. That's often one big area that we see people make the leap to a new system.
The next one is related to disconnected systems and people. I think Scott will talk a little bit about this as well. Back say late '80s, early '90s when I was in the industry working the accounting systems the big thing then was an integrated accounting system. I think where we are today, an integrated accounting system is table steak. What's getting more important is the integration between all your operational systems. For instance, the integration between CRM and receivables is an example, or from the opportunity to cash process.
The other thing that's happened I think with the economy and a lot of the down-scaling that happened in the last hiccup we had here in the economy, companies have reduced the size of their staffs and their accounting staffs and they're very, very lean. CEOs and CFOs are trying to get their companies to work together as a team to participate together on things. It's not as hierarchical or departmental as it was in the past.
You're trying to get people to work together, say, to help collect money from an account. You want sales and they are actually helping to do that and not just lop it over the fence to the ERP people to collect money as an example. What we're seeing is that a lot of companies are trying to find ways to bring their companies together and it starts with the systems that they've got.
Then the next thing, and it was eluded to here earlier is long cycle times. This can happen on multiple sides of the ledger, but you could have close problems where you're trying to get through the end of the month process. You may have to speed up your opportunity to cash process. Maybe there are too many steps in the process in terms of manual labor, but also it's causing you trouble getting invoices out the door to collect the cash.
It also could happen over on the AP side. You might be spending too much to buy things and you want to reduce the cost of acquiring goods or services. Each business is a little different but there might be a cycle time in your company that you really need to crush in order to perform better as a business.
The next reason is not as pleasant, maybe and that's a directive by an auditor banker and it's telling you that you need to change things typically to improve controls. We usually see this in smaller companies or growth companies that are on an entry level booking system of some kind.
Or an entry level accounting system that doesn't have the controls you would need to, say, go public including things including the ability to enter one sided entries. Some systems allow you to do that, or to change transactions after the fact, to go into a previous period. As you get bigger, you've got to have better controls than that. Some of the entry level systems really have problems in that area.
The other thing that happens when you grow is the volumes grow, and the volumes might break the physical structure. The system the database is built on might not handle it, but then also the accounting processes around it might take too much time. If a system was built for smaller volumes, you might not have some of the niceties you need, say like an AR to do background cash matching in an automated way, so you don't have to match everything manual, as an example. Then, the last thing there is as you grow, you're getting more sophisticated so you may need more accounting capabilities in more things like reporting.
Let's look at the next reason, and this is something I've seen over the years in my career, is that every wave of technology changed systems. Just in the time I've been in business, my first job out of college, we were putting in accounting systems to replace ledger card posting systems. Then, we were doing that typically..."
End partial; Cloud Accounting Webinar
This webinar will feature Blue Shield of California Foundation, CFO, Scott Travosos, who will discuss the tell-tale signs he knew it was time for a new accounting solution at his company, his path to Cloud-based systems, and ultimately the powerful impact that cloud accounting applications have had on his organization.