How Digital Niche Players Are Helping To Transform Finance

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CFOs at leading providers of finance-focused data, software and automation solutions use their own (and others’) products for function needs, learning from the experience to optimize toolsets.

At business intelligence and data visualization software provider Domo, every one of the 70 people on CFO Bruce Felt’s finance team uses the company’s products for their particular needs. This usage begets improvements in the platform that are passed on to customers to digitally transform their finance functions. “We’re the poster child for someone else’s utilization,” Felt said.

Users of Domo’s low-code platform range from Felt to the public company’s controller and Financial Planning and Analysis (FP&A) team, among other finance professionals. Each has their own specific needs and collective uses. “FP&A, for example, is constantly updating the multi-year models guiding our business decisions, to conform to what investors expect and what we’ve committed to the board,” said Felt. “Using Domo, the models become instantly available to me on my smartphone. At a board meeting, I can pull them out of my pocket at a moment’s notice.”

Domo’s finance team wields other tools in addition to the company’s data visualization and business intelligence solutions. “We use Salesforce for customer support and satisfaction, Xactly for sales commissions, Avalara for tax compliance, BlackLine for the financial close and NetSuite as our ERP,” the CFO said.

That’s just the short list. “We source data in real time from hundreds of different systems, which are integrated into Domo through APIs (application programming interfaces),” he said. “We then build custom applications for things like sales forecasting, which we rely on internally. Next-level use for the finance function is bringing in machine learning and AI.”

Felt’s finance organization gets to try out these tool enhancements “before making them available to everybody,” he said. In FY 2022, Domo tallied more than 1,000 employees and $258 million in revenue.

The finance organizations of other providers of data, software and automation products are similar testbeds, their finance teams getting to try out the newest enhancements first. By creating a future-ready finance function internally, the providers ensure that current and prospective clients will have what they need to move steadily ahead in the digital transformation of their finance functions.

As these handoffs persist, a recent report by Deloitte projects the inevitable creation of what it calls a “finance factory.” By 2025, the report states that leading edge finance organizations, thanks to an array of ever-more useful tools promising greater work efficiencies and outcomes, will focus “on using big data, analytics and predictive modeling to inform business strategy and decisions … freeing up finance to apply automation to planning, forecasting and other higher-value activities.”

Anton Sher, a principal at Deloitte Consulting, elaborated on the importance of these new technologies. “We’re noticing an increase in next-gen ERP (enterprise resource planning) implementations, resulting in a renewed focus on the FP&A organization to provide more predictive modeling capabilities,” he said. “Sometimes this is coming out of the ERP vendor solutions, but we’re also seeing it come from these very interesting niche players helping round out end-to-end enterprise processes.”

Niche Nuances

These niche players include companies like Domo, as well as Mural and BlackLine, each constantly refining their product offerings to the finance function. One of the best ways to grasp these refinements is by gleaning the experiences of their own finance professionals, who get to try out what’s new first.

At Mural, CFO Felix Beccar cited the use by his FP&A team of the company’s SaaS (Software-as-a-Service) cloud provider’s collaborative intelligence platform. “FP&A is a modeling firehouse in a way, looking at our future and breaking down the ARR (annual recurring revenue) into new and existing channels,” said Beccar, CFO at the privately held company, with more than 650 employees in 24 countries and annual revenues exceeding $100 million. “Our analytics team works hand-in-hand with FP&A to expand sales volume based on these analyses.”

This work is facilitated by Mural’s online collaboration application for virtual team brainstorming, planning and mind-mapping. The app is used by collaborators on a virtual whiteboard to graphically represent their ideas and concepts. In some cases, the whiteboard is a blank canvas, in other situations Mural will provide a well-crafted template. Users provide information to the whiteboard through simple drag-and-drop actions. “The finance team here uses Mural for things like OKR (objective and key results) quarterly planning, defining the steps we need to take to achieve a particular goal,” said Beccar.

He contrasted the use of the collaborative platform with how he brainstormed with clients in the past, as a case team leader in the London office of Bain & Company. “When I was a management consultant (in 2013), I’d have this piece of paper in front of me as I was listening to a partner and would quickly draft a slide to send to a client,” he said. “That reflexive muscle was how I was trained.”

Now, Beccar uses Mural to do regular catchups with his finance team, starting with a quick icebreaker asking how their day is going—cleverly dragging into the whiteboard a visual image of a green, yellow and red traffic light for team members to click their preference—followed by brainstorming big picture stuff, he said.

Aside from using Mural, the finance organization also performs work using NetSuite’s ERP system, a CRM (customer relationship management) solution from Salesforce, and Workday’s HR information system, which comprises Adaptive Insights, an FP&A tool used to predict future cash flows and costs. Other tools include Celigo for software integration, Tableau for reporting, Expensify for expense management and for accounts payables processes.

It’s all part of the finance function’s continuous digital transformation journey. “We are constantly revisiting these vendors and our own processes and tools for technological solutions allowing us to grow and scale, without the need to increase headcount,” Beccar said. 

He is not alone among CFOs at other data, software and automation companies seeking continuous improvements that reduce manual work burdens for finance staff, liberating them to provide more value-added strategic input differentiating the business.

At BlackLine, for instance, CFO Mark Partin commented that the digital transformation of his finance organization serves as an incubator of innovation for other CFOs. “Well before we talk about new tools here, we have a lot of independent thinkers wanting to challenge the status quo by simplifying work using the tools we already have,” said Partin, CFO at the finance and accounting automation leader, a publicly traded company with more than 1,900 employees and $425 million in 2021 revenues. “We start with that and go from there.”

In making these “build or buy” technology decisions, Partin said the function’s independent thinkers “try not to stray from their sphere of expertise and experience. They’re focused on building out new solutions across our legacy products, looking for ways to strengthen the value we already provide customers.”

While BlackLine’s finance function leverages its own cloud-based financial close, accounts receivable and intercompany financial management software tools, “if something is not a core competency,” Partin said, “we’re not about to build it, and will look to see what is available in the marketplace to optimize the work across finance. We then seek to partner with the providers of these best-of-breed solutions.”

Like other CFOs, he cited a laundry list of partnering vendors, such as Zuora for billing, Adaptive Insights for FP&A, ADP for payroll and Concur for travel & entertainment expenses, among others. Asked for an example of a recent “build” decision, Partin pointed to the development of a new tax hyper-automation capability for intercompany financial management. The solution is designed to help multinational companies navigate the complexities of transacting across multiple legal entities and jurisdictional boundaries, he said.

“Tax is a big part of intercompany financial management from a local statutory compliance standpoint, given the need to ensure the integrity of the tax determination across jurisdictions,” Partin explained. “Before you can do that, the office of the CFO needs to assess the efficacy of the transfer pricing—the price one company division charges another division for the goods and services provided. To do this, we’ve developed a fully vetted invoice form for statutory tax purposes in each country and local jurisdictions.”

Finance in 2025

By trying out their enhanced data, software and automation products in finance first, the three providers—and likely other niche players as well—are generating crucial equipment to power the “finance factory” of the future, in conjunction with the big ERP companies.

This factory will be an engine of efficiency, with most manual processing tasks migrating to value-added centers of excellence, shared services centers and Global Business Services (GBS) centers. “The finance factory is progressing from automating basic responsibilities to redesigning processes end-to-end, resulting in better business insights,” the Deloitte report states, “as real-time information moves closer to reality and business analyses are generated on autopilot.”

Who will work in this future factory? Sher said that finance organizations will still need to rely on traditional financial and accounting skills, which will be augmented by newer competencies in operations, technology and engineering.

“We’ve said for some time now that finance needs new skills; now we’re starting to see it happen,” he said. “Data scientists and others with computer science backgrounds are already sitting side-by-side with FP&A and other finance professionals to build models, create visualizations and interpret the meaning of algorithms in business terms.”  

As more of the work traditionally performed in finance is automated and both large ERP providers and niche players continuously upgrade their product sets, finance professionals “will become a great source of talent across the rest of the business,” said Sher. “I can see them rotated into different parts of the enterprise to assist others in special projects.”  

Sher added that many finance organizations are teaming up with universities to create new career paths and learnings for finance professionals. “It’s an exciting time for the function,” he said, noting that the Deloitte report predicts that by 2025, finance professionals with business acumen, a service mindset and digital savvy will be in great demand.

“Everything flows, nothing stands still,” Heraclitus wrote. Due to ceaseless innovation, companies like Domo, Mural and BlackLine are reimagining the future of the finance organization and the strategic importance of the work performed.

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