Past, Present and Future The Digital CFO

Highradius

Speakers

Sashi Narahari

Founder & CEO,
HighRadius

Tiger Tyagarajan

President and CEO,
Genpact

Michael van der Steen

VP, Global Order To Cash,
adidas

Transcript

[00:00:00]Anchor:

This next group of panelists is going to talk about the evolution and past, present, and future of the digital CFO. So I’m very excited to have up on stage and first introduce Tiger Tyagarajan, President and CEO of Genpact. Welcome, Tiger. And last but not least, we have Sashi Narahari, Founder and CEO of HighRadius.

And finally, up on stage, we’d like to welcome back Greg Leiter, Senior Director Analyst from Gartner. Thank you so much for joining us, gentlemen.

[00:00:52] Greg Leiter:

So let’s talk about the past first and maybe the first question is for Tiger. A really difficult question is how did you get your name, Tiger?

Tiger Tyagarajan:

Oh, it’s a very difficult question. It goes back to when I was 4 years old. My name was very difficult to pronounce even by my friends in India where I was growing up. We went to an English class. We studied the- poem ‘Tiger Tiger Burning Bright’ by William Blake. We came out of the class, my friends looked at me and said, “We’re going to call you Tiger because we can’t pronounce your name.” And it stuck.

Greg Leiter:

Fantastic. You’ve been associated with General Electric and now Genpact for more than 20 years. Can you give us a little background about how Genpact was born and what did you sell to achieve that?

Tiger Tyagarajan:

So we were born as a subsidiary inside General Electric on really two propositions. Proposition number one- Actually, can we do finance for the GE companies? It actually started with finance. So sitting here listening, Sashi, to you talk about receivables, et cetera, is one of the ways we started. We used to do that for the GE companies and the other portion was supporting G.E. Capital. And again, there we started with supporting the small business lending world of G.E. Capital with collections and cash applications. So in our history, dating back to 1998, receivables and managing receivables for the GE financial services and industrial companies, the way we started. And then in 2005, with fourteen thousand people all serving G.E., we spun off into an independent company. And now we serve eight hundred customers. About half of what we do is financed, about a quarter of what we do is manage receivables. So, therefore, it’s the reason I’m here.

Greg Leiter:

Great story. Great. Fantastic. Sashi, a question for you. Is that your real name as well, Sashi?

Sashi Narahari:

Yeah, it is a very similar story. My actual name is Sashidhar. I was in denial for about 10 years as to why others cannot pronounce it. And then I said, “Okay, let’s change it.” So it’s just a short form of that.

Greg Leiter:

Great. And tell us the story behind HighRadius and Genpact, about how they come together.

Sashi Narahari:

Yeah. So I think for a good amount of time, we actually thought of Genpact as a competitor, you know, he is sitting here. So I think in order to cash space. I think Genpact has the really best messaging and how to talk about business transformation, a message that echoes with the large enterprise clients. And then I think we have all this kind of subtly competed. Although, we are a tech company and Genpact is a business sense of mission company. But I think it just made logical sense, given that we have a lot of mutual customers, including Adidas. And the customers started telling us, “I think you guys do two different things, but in the same area, it might make sense to partner.”

Greg Leiter:

Obviously, three of you have seen companies make this digital pivot from the old world legacy world into new digital transformation. Which single company has inspired you to do that?

Tiger Tyagarajan:

So the natural answer is Apple. So that’s one example. But we think a lot about large enterprises and industries that have 100-200-year history and strength and a fabulous customer base and reputation and half of them are driving change. And therefore they’re going to be very different 10 years from now. And half of them are not driving change, so they’re going to die. And we think we learn lessons from every one of them and every industry. And I find it fascinating that there are two competitors that are equally strong in the same industry. One is willing to cannibalize itself to drive change, and therefore it’s going to be hugely successful. And the other is saying, “No, no, we have a good business”, are dead. So we learn lessons from so many of them. I just can’t call out to anyone.

Greg Leiter:

Okay. Sashi? How about you?

Sashi Narahari:

Yeah. For me, there are a lot of good companies. Amazon is one that has inspired me in not just technology disruption, but their ability to get into different businesses and be really successful at it.

Greg Leiter:

Okay, great. Fantastic. Let’s pivot to the president now. Tiger, a question for you. You know, digital transformation is the buzzword you see in industry for some time now. How much of it is real in your view?

Tiger Tyagarajan:

It’s funny you say that because we actually do think it’s a buzzword, like lots of other hypes. There is a hype around it, which is why our tagline is- “There’s only one place where it happens, it happens here, which is in Genpact.” Just trying to crack a joke. We think that change is what is most important in organizations in order to grab new ways of doing things, new technologies and leverage them for value. And we think the struggle that companies have is actually driving change. And therefore, when we think about transformation most often, 80 percent of the time, we think about the people involved, the politics involved, the biases people have, the relationships people have. You know, what are they going to embrace and why are they going to embrace it? What’s in it for me? All of those become incredibly important. So in that context, we do think change and transformation are what leaders spend time on. We spend time on reclines. So while it is a buzzword, it is real. A hundred percent of our clients are grappling with it in their own way. As I said, half of them are grappling with meaning- they think about it and they say they don’t want to do anything with it because it is too painful. The other half do stuff.

Greg Leiter:

Thanks. Sashi, a question for you. The role of the CIO seems to be gradually shifting to that of a chief digital transformation officer. You know, CIOs are under pressure to produce game-changing A.I. strategies. How do you see them partnering with the business to do this now? What’s your view on that?

Sashi Narahari:

Yeah, I think so. First of all, what we’re seeing is in companies right now, there is a chief digital officer, which is a separate role to a chief information officer. If I had to forecast into the future, I think those rules would likely emerge. We don’t know what will be retained. It doesn’t make sense to have two roles and who reports to whom and all that stuff. But I think in terms of their roles itself, it’s not very different from how it has been in the history of time. It’s just that their ability to embrace and bring these new technologies to partner with the businesses. I feel like there are two ways, that it’s the business teams that go find something and they pull the I.T. teams and then vice versa. I don’t really see a change. I think the pressure from the board and the CXOs on bringing the change are much more now unique versus how it was in the past.

Greg Leiter:

Sure, of course. Obviously, artificial intelligence is a big buzzword here. You know, there’s still quite a bit of hype that we associate with it, but your HighRadius seemed to embrace A.I. Can you give us maybe some background in how much of it’s driving your customer success stories right now?

Sashi Narahari:

Yeah, sure. So I think we have various products. So four of our products- Deductions, Collections, Credit and Cash Application- are all native A.I. right now. That was the biggest pivot we embraced for a period of time. I do agree that it’s a buzzword, but if you just assume it’s a buzzword then you’re wrong, you’re done. So we think the word hype just creates additional force behind a general initiative or in general. EIPP is not A.I. based, but it is a simple customer portal and all of our treasury products are A.I. based. So we pretty much think that the next version of enterprise software, if you think about On-Prem followed by Cloud. The native A.I. software companies will win just like our salesforce took over the world after the cloud. I think the next big software companies which can embrace A.I. would be a highly differentiated play.

Greg Leiter:

Tiger, this must be impacting your business quite a bit. You see it evolving how your people work and how you’re serving your customers.

Tiger Tyagarajan:

Oh, a lot. If you think about the nature of our business, about 60-70 percent of our business is people taking information from one place, comparing it to information somewhere else, doing some math, calling some people, asking for approval and then taking some decisions. All of that can be done through a combination of various technologies, including A.I. and machine learning. So we are seeing, bringing A.I. and machine learning into a number of these areas really changes the way work gets done. But there’s a big caveat. All learning has been the approach to using machine learning is I want to find a way to automate and I want to find a way to reduce labor, then it’s not worth it. There are better, easier, faster ways to do it. If, on the other hand, the objective is, of course, I’ll get some automation, I’ll get labor, I’ll get lower-cost, et cetera. But the real objective is I want to find a way to approve someone on a credit in four hours instead of one week, I’m going to win more business. By the way, I’m going to charge an extra 100 basis points on my interest rate. And the customer doesn’t care. If I use A.I. to actually say, “I’m not going to pay out insurance claim because I think this is a fraudulent transaction”, that could save millions of dollars for an insurance company. In the receivables world, if you call a customer for collections before they are overdue because you know, that customer is probably going to default and you don’t call a customer even after 15 days of being in default, because that customer always pays 30 days late and actually ends up paying overdue interest? That’s a great customer. That’s value. That’s a lot of money. That’s a lot of margins. So when companies go after use of A.I. to capture a bigger value, better experience, better working capital, you know, more business, then they end up with success if they go after it only for reducing labor, it’s not a success.

Greg Leiter:

Well, let’s pivot to the future. Sashi, you talked about the 10x economy in your keynote today. How would you advise a CFO to prepare for this driven 10x economy? How to go about doing it?

Sashi Narahari:

Yeah. So I think no different than any role, my role as a CEO or an analyst. I was a collections analyst. I think the CFO role is very quickly evolved into a digital CFO. And there is a lot of stuff happening, whether it is all the various functions they manage from FBNA to procure, to pay or to order the cash. And for them to be a Dot One that I use as a term. For the next five years, I think they have to rapidly evolve.

Greg Leiter:

Sure.

Sashi Narahari:

I think the CFOs are probably at a bigger risk of being obsolete in terms of the older way of doing things and the paper-based process. And I think they’re a bit of that based on the conversations that I have had.

Greg Leiter:

Tiger. How about you with the expectations of CFOs and the customers you deal with? You know, what do you think is their next frontier in terms of digital-first economy?

[00:11:44] Tiger Tyagarajan:

So if you paint a picture of the future of finance and therefore the future of the CFO and the CFO’s organization, we think about the world of the CFO as one where, you know, the machine A.I, HighRadius, and technologies will basically allow them to make decisions every minute. So why can’t we close the books every minute? Why can’t we collect cash exactly when it’s needed from the person who’s ready to pay? And we know that. Why can’t we pay the supplier at the last moment exactly when you know that they’re going to get pissed and you do it only at that time? And so on and so on. So. So our view is the future of finance is where those types of things all are done in real-time, using real-time digital technologies with real-time prediction. Think about ways that allow you not to map your journey before you start the journey. No one maps the journey before they start the journey. They start the journey and then every minute you’re saying, “Okay, where do I turn? Left or right?” And five minutes back it may have told you to turn left when you get to that crossing. By the time you get there, it may actually ask to turn right because traffic has changed. That’s the way we think about the world of the future. Therefore, what’s the role of the CFO? The role of the CFO is, I think, Sashi, you called it out in your presentation.

Prediction is what the machine will do. Decision and judgment are never going to go away from human beings. And the experience is never going to go away from human beings. Empathy. So humans are going to spend more time than they do today on judgment, decisions, and experience. If you go to a CFO today and you ask what is it that you really would like to do, I want to spend my time thinking about what decision I should take. Where do you spend your time? I spend my time collecting data. That’s going to change.

Greg Leiter:

Thank you. Final question for everybody. You know, it’s February 5th, 2020. Apart from Radiance 2025. What would you think February 5th, 2025 would look like?

Tiger Tyagarajan:

Apart from the fact that we’ll probably be even bigger than we are and we’ll probably be the best in what we do and HighRadius will be equally very big and best at what they do and we’ll be great partners. I think the future of finance that I just described as given bottom becomes more and more real. So, therefore, I would argue that finance professionals today, who are evaluated on their financial skills will also have to get evaluated much more on their softer skills, on their right brain thinking, on their ability to actually relate to people and tell them what decision to take and pass judgment. More and more, I think in general, leadership is going to become half right brain, half left brain, which is the opposite of what people think. People think the world is going to go more and more towards them. We think actually be careful because machines will actually help you do a lot of things. So, therefore, what’s your job? Your job is to actually bring everything that a human can bring.

[00:14:38]Greg Leiter:

Sashi?

Sashi Narahari:

So as a starter, I would like to see the Texans win the Superbowl in the next five years. And maybe beat the Cowboys on their turf. On a serious note, I think I already covered this. So I think our goal is to kind of, what we would like to see in the next five years is to deliver and become the best in class companies, the Dot One companies to all of our customers. That’s where the substantial result matters and then everything else is hype.

Greg Leiter:

So, fantastic. Well, great. Thank you so much, Michael, Tiger, and Sashi. I really appreciate your taking the time to speak with the group today. It’s been very, very informative.

[00:00:00]Anchor: This next group of panelists is going to talk about the evolution and past, present, and future of the digital CFO. So I'm very excited to have up on stage and first introduce Tiger Tyagarajan, President and CEO of Genpact. Welcome, Tiger. And last but not least, we have Sashi Narahari, Founder and CEO of HighRadius. And finally, up on stage, we'd like to welcome back Greg Leiter, Senior Director Analyst from Gartner. Thank you so much for joining us, gentlemen. [00:00:52] Greg Leiter: So let's talk about the past first and maybe the first question is for Tiger. A really difficult question is how did you get your name, Tiger? Tiger Tyagarajan: Oh, it's a very difficult question. It goes back to when I was 4 years old. My name was very difficult to pronounce even by my friends in India where I was growing up. We went to an English class. We studied the- poem ‘Tiger Tiger Burning Bright’ by William Blake. We came out of the class, my friends looked at me and said, “We're going to call you Tiger because we can't pronounce your name.” And it stuck. Greg Leiter: Fantastic. You’ve been associated with…

What you'll learn

Most CFOs are moving from being the chief accountant to strategic enabler and the CEO’s key partner. This fire-side chat between Sashi Narahari (HighRadius CEO), Tiger Tyagarajan (Genpact), Michael van der Steen (adidas), and moderated by Greg Leiter (Gartner) will see them discussing how artificial intelligence is changing the CFO narrative in predicting business risks and business optimization.

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HighRadius Integrated Receivables Software Platform is the world’s only end-to-end accounts receivable software platform to lower DSO and bad-debt, automate cash posting, speed-up collections, and dispute resolution, and improve team productivity. It leverages RivanaTM Artificial Intelligence for Accounts Receivable to convert receivables faster and more effectively by using machine learning for accurate decision making across both credit and receivable processes and also enables suppliers to digitally connect with buyers via the radiusOneTM network, closing the loop from the supplier accounts receivable process to the buyer accounts payable process. Integrated Receivables have been divided into 6 distinct applications: Credit Software, EIPP Software, Cash Application Software, Deductions Software, Collections Software, and ERP Payment Gateway – covering the entire gamut of credit-to-cash.