71. Building an impactful & commercially focused finance team with Monica Arora, EVP of Commercial Finance, Sage

Hannah Munro: 0:48 

So, hello everybody and welcome to this episode of CFO 4.0. With me today is actually a returning guest. We had such a fabulous conversation last time that I begged and pleaded for her to come back on the show and talk about everything commercial finance. So, with me today is Monica Arora, who is the Executive Vice President of Commercial Finance at Sage. So, welcome back on the show, Monica. 

Monica Arora: 1:12 

Thanks, Hannah. It's great to be here again. 

Hannah Munro: 1:15 

Lovely. And I think it was really interesting, our conversation last time. And I think we could have talked for quite a while around the topic of commercial finance, hence the invite back on. But do you want to just tell people that perhaps didn't listen to that first episode, what is your current role and what does it involve? 

Monica Arora: 1:36 

Yeah, sure. So, as you said, I'm Executive Vice President of Commercial Finance. And I report into our CFO and our COO So, it's a hybrid role whereby I work very, very closely with the business, but also lead the finance function with my peer who looks after the sort of the controlling and the accounting side of Finance. 

Hannah Munro: 1:59 

Brilliant. And just tell me a little bit about why commercial finance? What gets you excited about the role of finance, of that part of the role of finance? 

Monica Arora: 2:10 

And even though I'm like a trained, qualified accountant, it's all that sort of accounting side, all the technical things that I didn't really get a buzz out of. What I really like is working really, really closely with the business where I can make a difference and help drive our strategy forward. And it's really important to have sort of that financial aspect partnering with the business. And that's the piece I like. I really like partnering with that business and working with various stakeholders. It also makes me feel like I've made a business as well. Not that the other side of finance don't, but I'm not the type of person that likes to sit behind my machine all day crunching spreadsheets. 

Hannah Munro: 2:55 

No. And what, what, at what point did you realize that that was the direction that you, you wanted to go in? Was it quite early on? Was it something that you sort of figured out once you obviously, you kind of fell into or was it a planned shift? 

Monica Arora: 3:12 

It wasn't planned, but it was quite early on in my career when I was sort of when I left audit and qualified as an accountant, moved into industry. And I did very, typical sort of financial accounting roles which was a little bit more technical a little bit towards statutory reporting and I realized very quickly that that's not my forte and I really like being out there with the business understanding more and I'm working with a variety of stakeholders not sitting just in the finance bubble so, it was quite 

Hannah Munro: 3:46 

Yeah, and was it something that you consciously made the shift for? Or did somebody sort of mentor you up into that role? Or how did you gain the skills for that role? 

Monica Arora: 3:59 

I think it just naturally happened. I was quite fortunate that in my sort of, as I evolved in my roles in finance, the nature of what I was doing sort of made me have to speak to various parts of the business. And then I very quickly realized, well, actually, I actually really enjoy this. rather than sitting back and doing the more technical, mundane kind of statutory sort of accounting, if you like. And therefore, from there onwards, every role I went on, I made sure that I had that kind of aspect of it. 

Hannah Munro: 4:35 

Brilliant. So, tell me a little bit about how you see the role of commercial finance and how has it changed over the years. 

Monica Arora: 4:44 

So, look, like finance more broadly, commercial finance has evolved to be sort of a more strategic, forward-looking part of the business. And I know every single sort of large organisation has a commercial finance function. For me, and what my sort of mantra is that we have great finance function and great people, but it's more around putting the commercial into that commercial finance function. And the way I think about it is three I's, if you like. It's all about providing information that shows how the business has performed. And that will always be a part of what finance does. It's our bread and butter. And it's more like a hygiene factor, really. And then Really, what I'm focusing my team on is providing that insight and being more innovative. So, we're all brilliant at producing the data. I think I said this last time. But what does it all mean? Like I get sent lots of spreadsheets, lots of data. And the first question I say to my team is, well, what does this mean? What do I need to do? And it's just so, important that we as finance companies colleagues make sure that whatever data we're providing, we give that insight at the same time that informs strategic decisions. So, for example, what are the right investments we need to make to drive growth? How can we reduce the cost to acquire new customers, as an example? And then on the flip side, being more innovative in the ways of how we present this data and the insights to add value to the business, I.e. is it better to do sort of monthly rolling forecasts to aid decision making or is it better to stay on a quarterly basis? cycle, for example. So, it's really, really important that the finance function have this understanding of the business in order to provide that strategic direction, if that makes sense. And the trend will only continue as technology sort of becomes more sophisticated, and businesses ask for more real time data, hopefully moving more towards predictive analytics, financial modelling and scenario building. 

Hannah Munro: 7:01 

And obviously with that shift into that more advisory almost role, how has that changed the skill sets that you need to have within that team? Because offering not only data, because data is one thing, isn't it? Anybody, well, anybody with a good analytical skill can produce data and put it in front of somebody. But that skill to be able to understand that data, like you say, generate insights, that's a different level, isn't it? 

Monica Arora: 7:29 

Yeah, it's a really good question, Hannah. Sort of previously, I think specifically at Sage, whoever we've recruited in, we've recruited the typical colleagues that have come with more of an accountancy background, coming like, you know, trained in the big four, done a bit of audit, et cetera, then coming straight here. Now I've changed my approach because I've realized that you need a different skill set and you need A different mindset, if you like, because as we've already discussed, it's not just about producing the data. It's about being able to manage stakeholders, being a really strong finance business partner that represents finance adequately, but also able to interpret the data and provide the insights. So, previously, we had quite a lot of resource that were there producing data. So, therefore, you know, they were really good at spreadsheets and Excel and all the rest of it. But now we're in this era of automation and we're really, really trying to innovate in the way we produce data, automate and reduce a lot of manual sort of production of data. It's changed. So, it's about having the right combination in a person, someone that has strong data analytics, so, therefore able to draw out the key insights. But then also, as I just said, being that business partner and having strong communication skills, being able to take those insights and provide that strategic advice to the business, no matter what level, but of course, operating within financial governance. So, Commercial finance professionals who can combine both of these skill sets are highly sought after. And it's up to us as companies to find ways to win that competition for the talent. For us here at Sage, we've really started to recruit from a wider pool. As I say, we don't traditionally go for those that have been trained from the big four, if you like. And more importantly, we've put a real focus on investing in our own finance colleagues and building their capability, their skill sets, and develop the talent from within. I mean, ultimately, we want to be in a position that senior positions are all recruited from within, and we don't have to do external searches, etc. So, it also provides, you know, enhanced career development opportunities for colleagues at SAGE that, you know, have all the relevant skills gaining this broader experience, whereby that they can have opportunities to also move out of finance as well. 

Hannah Munro: 10:07 

So, when you say you recruited from a wider pool, does that mean that you still need them to have that typical sort of accountancy background at some point in their career and those qualifications? But actually, you're looking for somebody perhaps that's worked with lots of different businesses rather than the typical big corporates that you might see traditionally. 

Monica Arora: 10:29 

Yeah, that's absolutely spot on. I mean, obviously... they have to have some accountancy and finance background and largely, you know, they're qualified SEMA, ACCA, ACA, because you need the basics, I guess. But as you say, Hannah, it's that experience of working in different businesses, different companies. I mean, what I always scan for is this business partnering. When I see a CV, it's just so, important in commercial finance because it's You know, you're working with the business, you're working with other functions, you're working with those driving revenue. So, you need to be able to sort of interact with 

Hannah Munro: 11:08 

And I guess one of the, do you, do you have a slightly different question, I guess, is do you look for people with an experience business partnering with certain industries or do you actually quite like sort of cross industry partners? almost like diversity of thought coming through? 

Monica Arora: 11:26 

Yeah, it's a really good question. I specifically, when I do my recruitment, the industry doesn't matter to me because being a commercial finance professional, you can do in any industry, industry, from tech to retail, from whatever it is, and regardless of the size of the organization as well. Because as you say that diversity of thought, the challenge that is brought in is always that interesting aspect. And again, it's that added value that we can bring. 

Hannah Munro: 11:57 

And again, this is, I guess, a really great conversation because obviously, typically, you would have had, like you say, the standardized sort of corporate shift. But when you're looking for that sort of commercial finance role, sometimes it can be quite intangible to measure, can't it? Like, it's not like somebody goes on, has on their CV, this lovely commercial, you know, finance storytelling is not one of those things that you necessarily get qualification for. So, So, what is it that you actually look for when you're either interviewing or on a CV that makes you think that they would be a good sort of fit for you and your team? 

Monica Arora: 12:37 

Well, obviously, just making sure, you know, we've done the review of the CV to see the relevant experience, but it's more about the interaction. with the individual, you can very quickly tell if this person is able to sort of manage different stakeholders across the organization from those that are a little bit more complex and difficult to handle to those that are less. And it's really just from the conversation, understanding their experience, their personality, because it takes a different type of person to be able to interact with different parts of the business. I mean, When I talk to other finance colleagues, a lot of people say to me, I don't know how you do your job. Speaking to sort of challenging execs, wanting different things, conflicting priorities, and you need to do it. I'm quite happy doing what I'm doing. Whereas I get a buzz out of that. I actually enjoy doing that and being in a challenging situation. So, you can very quickly tell by having a conversation with someone. We started for the more senior roles; we started to do case studies. As well, because as we discussed, it's so, important. I need someone that once they've been given some data, can they interpret it? Can they present the story back? And what does this mean? So, we've done that as well recently, which has proved to be a great success. And you've done that as part of the interview process? Exactly. Yeah. Yeah. Brilliant. Now, that's a really great idea because sometimes, like you say, it can be quite hard to measure. And actually, that's a great example of you being able to assess some of these capabilities. And did you get any surprising results from that? Did the candidates that you expected to do really well perhaps didn't show through and vice versa? Yeah, it's always a mixed bag. But we only move people to that stage once they've been through a couple of rounds. So, nine times out of 10, we get really, really high-quality results. And also, it gives us some really good ideas as well from that fresh perspective that even if they don't come to stage, we give them a case that we can take that forward. So, being a bit cheeky there and stolen some of their ideas as well. So, beneficial. 

Hannah Munro: 14:50 

Yeah, absolutely. I think there is something, isn't there, about like diverse, diversity of thought. I haven't heard a better phrase for it yet, but like he's, we were talking about earlier, like different backgrounds, different educational perspectives, and also like different organizations. How do you manage that within the team? Because I guess, you know, if you're all from, if everyone's from the same background, you end up with the same perspective on things. So, is that something you actively recruit for now? 

Monica Arora: 15:19 

Yeah. I mean, I actively look out for that because, you know, we’ve done quite a refresh of the commercial finance team, specifically the group function here. And already I'm seeing a notable change because, you know, from five years ago, we still used to have the same reports on a monthly basis. And I'm like, guys, why don't you make it more relevant to the business? Why do you have to wait for me or someone else to tell you how to do it? Just come forward. With an idea, right? And I'm already seeing that here. We've got a wide breadth of people here, new people that have come from various backgrounds, and they're already thinking very differently. And the other good thing I like about some of the new colleagues that have joined our function is they'll all challenge. They won't just do something because they've been asked to do it. We're like, well, actually, why do you need that? Why can't we do this, for example? Or, you know, we did something last week. I'm not going to, you know, recreate this, which is great to see, right? Because people aren't just doing what they've been told to do, or it was done last week or last month. So, that's really, really encouraging 

Hannah Munro: 16:35 

The sign of a good team, you know, is when you've got people that aren't afraid, I guess, to challenge and to have those conversations. Good leadership as well, Monica. That's a great sign. So, we've talked a little bit about obviously bringing in new, you know, new, fresh talents and adding that to the pool. But what about existing colleagues? You mentioned earlier about trying to bring people up through the ranks from different parts of the business. What are the sorts of training and coaching and support that you provide to help people get the skills that are needed for a commercial finance role? 

Monica Arora: 17:11 

Well, we've got some great examples in our finance function of where individuals have really, really progressed through the ranks, starting out from being quite junior and moving through to director, VP and even EVP level here. And I think it's very early on; it's identified that this person is talent, right? So, it's about giving them exposure and at the right time and allowing them to sort of lead or own something with the right support um giving them exposure to sort of execs the board and really pulling them through the ranks and then on the softer side we invest a lot in talent development there's various sort of internal training courses leadership programs I've actually um this is the second year running, I launched a specific finance development programme for our mid-level management here, where out of sort of 450 colleagues, 15 candidates get selected and they're through a tailored nine-month project course where they go through various different modules enabling them to become more senior and more able in in their sort of management style etc so, that there's a there's a magnitude of things that are done here at Sage but it's just so, good to see um internal talent move around both upwards sideways you know even outside of finance as well um it's just so, important 

Hannah Munro: 18:45 

And do you send people, like how do you approach, you mentioned obviously giving people opportunities to own, are you actively looking for sort of secondments to different teams and areas? What sorts of opportunities do you look out for across the business to help develop your finance talent? 

Monica Arora: 19:01 

Yeah, so, prior to COVID, we really encouraged like our group colleagues to go and sort of do a couple of weeks in the US in our US business for example or in our Germany business or etc we're starting to pick that up again because I think it's so, important that group finance colleagues have that exposure and a better understanding to enable them to do the job and vice versa so, yeah we do encourage secondments we also encourage where there's sort of an extremely busy period like take year end, for example, or budgeting, will bring pools of people in from other finance teams to help. And that's where people get a flavour. So, last year, when we went through our budgeting cycle, it was really, really tough, really time pressured. And we had some analysts from our financial accounting team that came in, absolutely loved it. And now they want to move into the FP&A world, for example. So, you know, there's examples of that cross functional, if you like, as well as moving out into the business and vice versa, people coming in from business to group as well. 

Hannah Munro: 20:13 

That's brilliant. And obviously with the data and insight piece, so, I had a fascinating podcast that's literally coming out this week with a chapter all about data storytelling, which I thought was a really... interesting concepts around you know how to structure it is there like what kind of enhancements do you offer around sort of interpreting the data how do you support them to develop those kind of skills 

Monica Arora: 20:39 

so, that I mean, again, it's just sort of individual coaching. And again, we do have sort of specific training around innovation and sort of storytelling more broadly. But it's something we probably need to work a little bit more on and get a little bit more sort of formal structure. But again, I think it just comes with time doing every month and going to the business reviews, you know, enabling to learn more and then you're putting more of that insight in everything you produce. 

Hannah Munro: 21:11 

And I think that's the interesting thing, isn't it? Sage has been on this massive journey, like you say, from actually shifting into the world of commercial, bringing that out. What are the changes that you've seen in your team at Sage? What's the shift that you've seen in terms of how commercial finance is perceived across the business? 

Monica Arora: 21:31 

Well, I think sort of with the benefit of sort of the technology and the automation, right, it's allowed people to think differently. And it's just so, important. I know it sounds really basic, but people are always in a real rush. Oh, let me just shoot this email off. Let me just send the data. But it's now taking that step back and really understanding the data and thinking, how is this going to be used? There's no point in me just sending it on to someone with the know-how. No story, no value add, no decision making. Do you see what I mean? And I think that's, it's just so, key to everything we 

Hannah Munro: 22:14 

And I guess, how do you balance workloads? Because like you say, having time to actually think through data versus... obviously processing it, how do you measure and balance the amount of time each individual has on that kind of work versus the other side of their role? So, do you assign certain teams to an individual? Do you assign certain projects or certain reporting elements? How do you guys manage it at Sage? 

Monica Arora: 22:45 

So, again, I think it's more around the sort of the cultural aspects shift, if you like. And we do have a specific sort of commercial finance analytics team now that benefit from the systems that we have that push out all the data. But it's really more about enabling people giving them the space and allowing them to do that. Right. I think in the past people feel that, Oh God, month end forecast, you know, get to get into business reviews. It's about making that time, um, and, and, and really thinking differently. 

Hannah Munro: 23:28 

Yeah. And we've talked a little bit about systems as we've gone through, and you've said that actually systems were the key driver for the ability to shift into more of this commercial finance piece. What sorts of systems do you think is important in terms of their role in helping you shift into that commercial function? 

Monica Arora: 23:50 

Yeah, so, I think it's sort of wider, right? We've We within our finance function here have been looking at sort of automation of more repetitive kind of rule-based tasks. So, this allows us to sort of get things done faster, more accurately than sort of an individual can. So, at Sage... you know, we've got more of our transactional processes, which are sort of automated, allowing that time again for colleagues to spend more time on the understanding and decision making. We're producing our own sort of regular reports using automated Sage systems, which also reduces time in preparing the data, pulling the data together. We've got more sophisticated analytical tools as well that provide more insights that the business hasn't had access to before. So, we've been, you know, we moved from being an on-prem software provider to subscription-based SaaS business. We've had to change the metrics that we report on both internally and externally. And again, tech and systems have enabled us to do that. So, for example, we're now looking at SaaS metrics. Two years ago, we were in no way in any position to do that. right? And these SaaS metrics are so, key for us to measure our business, giving us better visibility of the cost of acquiring customers, how long it will take to recut the cost, more accurately predicting churn, measuring the lifetime value of our customers versus sort of one-off costs at a point of customer acquisition, and then supporting those smarter investment decisions is absolutely key. So, it's the systems that has allowed us to do that and focus on that. And it also allows us to have the data at our fingertips. We can very flexibly, very quickly access this data enabling us to help the business to drive some decision making. And what we've also actively done as a finance function is educated the wider business on these SAS metrics so, that they use it on their day to day. And they're looking at things very differently as well, which is a great win. 

Hannah Munro: 26:11 

Brilliant. And that's an interesting concept. So, tell us a little bit about educating the wider business, because we also we say that finance is the role of insight. But actually, insight's only great if people actually understand what they're looking at in some ways. So, how do you approach the education of the wider organisation in terms of building their skills around finance? 

Monica Arora: 26:34 

Yeah, so, if we take SAS metrics, for example, we did a really comprehensive sort of program whereby we rolled out what our key SAS metrics are, the definitions, how do you apply it, how do we get the data starting right from our executive teams, then going down individual sort of geo business teams in different functions. And we've done this in a variety of ways, face-to-face, one-on-one, group trainings, videos, you name it we've done it and people are really starting to embrace it so, for example when we go to business reviews now it's great to hear sort of business and functional leaders talking cat to cat to LTV lifetime value return on investment etc it's not just about sort of oh well we've got this many bookings generating this much revenue but what does it mean for the bigger picture so, yeah it's really good to see. 

Hannah Munro: 27:30 

Have you noticed an impact of that education? Like, what are the sort of benefits that you as a team have seen? And what benefits has the business seen? 

Monica Arora: 27:43 

So, benefits as a team is it's that our team are providing something useful to the business. And we've got a lot of people coming to us now. Can you just help us with this? Or can you do this, help us with this project? And can you just explain how churn works here and what's caused this, et cetera, et cetera. So, from that perspective, it's a real challenge. evolving analytics team now, which isn't just working within that finance umbrella, if that makes sense. And you actually feel like you're really adding value. to the business as well, which makes it more exciting for us as finance colleagues because you feel like you're making a difference, right? But yeah. 

Hannah Munro: 28:26 

That's it. And I think, I must admit, as a consultant, I always worry when I don't get questions and requests coming the other way. That's always a sign of danger. So, the fact that you're getting people coming to you asking to explain things or delve into different areas, which means that you know that something's working, that you guys are giving the right information, the right insight. So, what do you see as like where commercial finance is going to go next? What's your personal opinion on how the commercial finance function is going to continue to evolve? 

Monica Arora: 29:01 

Well, look, you know, following on the theme from technology, it's all-around sort of automation, AI, et c. And we're going to see a bigger role of technology within finance, right? You know, over time, I think I read somewhere that over 80% of the CFOs are saying that their investments in digital are accelerating. And even more so, you know, exceeding investments in other areas such as talent, supply chain, etc, like that. So, it's so, important that we're going to see this shift, as I say, from manual production of data to being automating. And therefore, that same proportion is expected to increase in this time spent on advanced analytics, so, that the finance function can provide more forward looking and predictive analytics. I think we touched on this last time, you know I really want to be in a place where I can do predictive analytics and show to the business this is what's going to happen over the next three years like having that at our fingertips would be great right so, finance is going to play a really big part in data strategy and making sure we, you know, therefore have a closer partnership with IT and data teams, making sure that, you know, we have the right data that's being produced across the business, right? And it's just really important that finance continues to stay close to the business and understanding the strategy, helping them measure the progress against that strategy and performance as well with the goals. So, more broadly, this is a real opportunity for sort of finance leaders to play a bigger role in an organization's digital journey, if you like, right, even in our own research that you know we did that the trend of over two-thirds of our CFOs you know have been so, much more influential over the digital journey over the pandemic and that trend will continue to grow right um so, so, it's important and then as we've spent quite a lot talking about um the cultural piece is really going to change whereby you know this business partnering this stakeholder management having more influence as a finance function is going to become more prominent. So, that's something that we really need to focus on. 

Hannah Munro: 31:34 

I love that. And I guess that's the shift, isn't it? Because there's going to be some CFOs sitting there going, like, I'm still working on getting information that I have already out to the business, let alone thinking about predictive analytics. But I guess that's what's exciting about, and certainly the bit I get excited about finance at the moment is that all of this technology is coming through to enable us to do that, to enable that shift. So, I love that. that concept of, yeah, not just forward-looking, but the predictive CFO. There you go. There's a title for another piece of research, I think. We'll have to run that past the Sage team. So, for those that are coming, you know, because we've got a real mix of listeners, you know, from the conversations that I've had with those that are messaging me. So, we've got everything from sort of aspiring CFOs through to those that are in that are already in that CFO role and maybe looking for a shift in industry or to take their teams. So, what are your top tips for building a successful commercial team? What couple of things could you give people as takeaways to sort of think about in terms of how they build out that commercial area? 

Monica Arora: 32:44 

Yeah, no, absolutely. I think it's, first of all, you as a leader to have that strong partnership with the rest of the business, the operational side of the business, IT need to be your best friend, IT and data, because again, having automated systems. So, partnership systems is key, making sure that your core data is produced in a systematic way, and then having a strong team with the mindset of, that want to sort of produce information, but provide insight at the same time, but be innovative as well, right? It's so, important that they're the ones representing finance. So, it's important to have those three I's. 

Hannah Munro: 33:29 

Yeah, those creative minds in finance. And that hasn't been something that's been there traditionally, isn't it? Those creative thinkers. So, you know, that's a really good shout. Well, thank you so, much, Monica. This has been a great conversation about the role of commercial finance. And certainly, it's been brilliant to hear your insight of what you and the team are doing at Sage as well, because I think that really helps put it into context. So, thanks so, much for coming on the show again. Really appreciate it. 

Monica Arora: 33:58 

Thanks, Hannah. Really enjoyed it.