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How trust, technology and AI are shaping the role of future CFOs
In this episode of The Better Finance podcast, Aaron Levine shares strategies for CFOs to navigate and succeed amid digital disruptions, focusing on technology, innovation and effective communication.
In this episode of The Better Finance podcast, host Myles Corson welcomes Aaron Levine, CFO of Prophix, to discuss the evolving role of CFOs in today’s rapidly changing business landscape. As organizations face ongoing digital disruption, driven by new technologies and the rise of artificial intelligence (AI) in finance, Aaron shares strategies to help CFOs navigate these challenges and deliver value.
Aaron emphasizes the importance of utilizing technology and innovation to enhance financial processes and decision-making. He explains how CFOs can harness data and AI to create a single source of truth that delivers better insights, informing improved decision-making and streamlined operations. Additionally, Aaron also highlights the need for effective communication and building trust across the C-suite, as transparency and collaboration are vital for building a positive organizational culture.
Throughout the conversation, Aaron draws on his extensive experience in finance and accounting, providing practical advice for aspiring and current CFOs. He explores the significance of continuous learning and professional development in attracting and retaining the best talent in finance.
Listen to the episode and discover actionable insights that can shape your approach to finance leadership.
Key takeaways:
Understand the evolving role of CFOs in the context of digital disruption and AI in finance.
Learn strategies for leveraging technology and innovation to enhance financial processes and decision-making.
Discover the importance of creating a single source of truth for better insights and streamlined operations.
Gain insights into effective communication and trust-building within the C-suite to foster a positive organizational culture.
Explore the significance of continuous learning and professional development in attracting and retaining the best talent.
For your convenience, full text transcript of this podcast is also available.
Aaron Levine
"I think fostering that culture of continuous learning, professional development, it's important to people these days and it should be."
Myles Corson
That was Aaron Levine, CFO at Prophix. I’m Myles Corson from Ernst & Young, host of The EY Better Finance podcast. A series that explores the changing dynamics of the business world and what it means for finance leaders of today and tomorrow by sharing insights from global leaders on key topics affecting the world of corporate finance.
Aaron brings extensive experience in finance and accounting, particularly within the software industry. And together, we explore the evolving role of CFOs, the impact of technology and AI [artificial intelligence], and the importance of trust and communication within the C-suite. So, let’s get started.
Corson
Aaron, thank you for joining us and welcome to the Better Finance Podcast.
Levine
Thank you for having me. I'm happy to be here.
Corson
Can you tell us about your role today and how you got to where you are?
Levine
Sure. So, I've had a pretty traditional path in finance and accounting. My whole career has been in the finance and accounting industry. In particular, I've served in software companies. I've been in the software vertical my entire career. Like many, I started kind of on the accounting track. I spent some time in the software group at PwC [Price Waterhouse Coopers] in audit, and then I shifted to two controller roles. I was the controller of two public software companies and then I shifted my career really more to the finance side.
Then I became VP [vice president] of Finance at another public software company and since then I've been the CFO of five PE [private equity]-backed software businesses. I've been at Prophix now for several months. I'm really happy to be here. Prophix is a fantastic business. We are a leading platform in the financial performance management space. Our platform is called Prophix One and we sell into the office of the CFO.
So, it's a core piece of software in the tech stack for CFOs, and what we do is we provide a single platform to address needs and accounting close, consolidation, budgeting, financial reporting and operational planning. I'm pretty excited about the business. I'm really excited about the technology and it's obviously something that I'm very comfortable with and familiar with as a CFO.
Corson
You mentioned, obviously, your role at Prophix and you're kind of in an interesting position of being a CFO of a business that sells to CFOs. So, can you talk a little bit about what that means for your role specifically?
Levine
It's a cool role for me personally. I've been telling everybody, I am the ICP [ideal customer profile] right? I am our ideal customer profile. So, like I said, I've been a controller, I've posted journal entries, I've been VP of FP&A [financial planning and analysis], I've ran the budget process, I've done planning. So, I really understand the needs and pain points inside the office of the CFO. Yeah, for me, it's great. It's a really interesting, exciting role. Obviously, I have opinions on things like the product roadmap, so I spend plenty of time with product and talking to them about where we're headed.
I talk to customers. I think I obviously can articulate some of our use cases and the pain points and needs that they have and then I can do fun things like this right, like podcasts. So, very excited, very cool role. But look, again, what really excites me about it is our ability to provide this technology in our platform to CFOs. I really think it's a game changer. Look, today there's data all over the place. There's disparate systems, people have ERPs [enterprise resource planning], they have CRMs [customer relationship management], there's all sorts of data and sales and marketing tech stacks. So, for me and for our customers, I think it's a huge win to be able to bring that data together under a common platform with a common data model and really use that data and solve the needs along the entire lifecycle of processes and workflows inside of the office of the CFO.
Because it starts from, hey, you close your books, you do an account rec, then you consolidate your books using that same data, you go and you do your budget and financial planning. So, it's really, I think a huge win, like I said, for CFOs to be able to use that data in our platform as a single source of truth and leverage the data to really drive the business forward.
Corson
You mentioned obviously the proliferation of data, the sources and the uses of it as being one of the disruptions, but that's just one of the number of ever-increasing pace and scale of disruption that organizations are failing and so in your experience, what challenges do executives teams face and how is that impacting the role of CFOs?
Levine
It's a good question. Look, I mean, there's many challenges for CFOs and management teams, broadly speaking, outside of the tech stack and technology and I think one big challenge today is really, just there's a general lack of trust of business in general and management teams. The cultural landscape today is interesting with social media and just the general political climate. So, I think there is just this sort of mistrust of business, broadly speaking, and I think CFOs and management teams certainly have their jobs to alleviate that mistrust.
But CFOs are at the forefront of that, right? I mean CFOs are, we're the ones that report the numbers and also articulate the strategy in the direction of the business. So, I think cultivating that culture of honesty and openness is really critical for the CFO and for management teams. Me personally, I really try to prioritize clear and candid communication, and I think everything is not always roses, right? You want to highlight the wins, but you also want to share news about potential challenges that help provide a transparent view of the organization's financial landscape.
So, I think it's critical, wins and challenges are critical to share, and I think, look, just being open and providing regular updates. Certainly, within the C-suite, I give a monthly financial readout after we close the books. We have our same sort of set of KPIs [key performance indicators] that we review monthly. Some are red, some are green, some are yellow, but I think just sort of being open and talking through those is really critical.
Corson
Those words about trust and confidence and the role of finance and CFOs can play, I think, is such an important area. You touched on the relationship with the C-suite. Communication, I think is such a keyword in effective communication with that C-suite and you mentioned obviously, the reporting you do, the transparency. Are there other things that you found successful in building that collaboration across the C-suite?
Levine
The CFOs, generally, we're in the more reserved, mild-mannered bucket. So, I do think it's important to build the relationships for CFOs. Our natural tendency maybe to be a little more reserved and held back, but I always say we're all people at the end of the day. So, business relationships are similar to other personal relationships you may have with your family or neighbors or we're all just people at the end of the day and we've all got jobs to do, we've all got goals.
So, I think really, again, so just speaking open and honestly with people and talking to people at a personal level is key and being empathetic and responsive to people's needs, again, everyone's got a job, everyone's got different goals. So, the way you communicate to an AP [accounts payable] clerk, as an example, is different than the way you may communicate to your CRO [chief revenue officer]. Being empathetic to each person in their role and really forming a real personal relationship is key.
Corson
That really resonates, and empathy is such a great word. I think to your point to, sort of, the general perception of finance people being very much more so left brain analytical versus the right brain empathetic and then the personal skills is hopefully one that we can overcome, but that is such an important part of the success of the finance leadership is going to look like, being able to balance that left brain, right brain.
Levine
Absolutely. Old school CFOs are kind of the no guy, right? The cost cutting mentality and look, we all have to manage costs and everyone has EBITDA [earnings before interest, taxes, depreciation, and amortization
] targets and cashflow constraints, but I think that sort of mindset has really shifted now. Personally, I like to be the yes. I'm not the no CFO, I'm the yes CFO, right? So, if we really need something or your group needs something, you know, let's talk about it and figure out a way to get it done. There's always trade-offs, but it's an open conversation. I certainly don't have all the answers, but think we can figure it out together.
Corson
Again, I think perception of finance people tends to be very analytical and we can turn out with lots of detailed spreadsheets and analysis, but if you're engaging with an audience that doesn't have a finance background, how do you take those difficult, complex constructs and explain them through storytelling in ways that a nonfinance audience can understand and obviously, technologies like yours have a role to play in that storytelling. It's interesting to begin on how you've used that in practice.
Levine
The CFO has this unique view of the business, right? We kind of have this bird's eye view. I mean, other than the CEO, we have the most holistic view of the entire business. The CRO is heads down on sales, the CMO [chief marketing officer] is heads down on marketing. The CTO [chief technology officer] is developing. So, it is part of our job to bring that whole story together for the management team and for the employee base as a whole and again, we do that at a personal level, but we do story tell, right? And the way we story tell is through numbers. It's generally through spreadsheets and graphs.
You know, again, I think old school was one of these big finance packs and data dumps and that's not where our bread is buttered, right? Anyone can dump data into a deck. Our bread is buttered by piecing it together, forming insights from that data and then telling that story through numbers and zeroing people in on where we see as needs and challenges.
Corson
And using visualization to drive actionable insight rather than just, as you said, dumping data as such. So, that's great and really appreciate you sharing some of your perspectives. Is that also what you see consistently from your customers in terms of the problems they face and the problems that come in to you to try and solve?
Levine
Absolutely. There's just this last decade plus, there's just been this explosion of data. There's the tech stacks again, have really exploded, particularly on the sales and marketing side. There's all sorts of tools, there's all sorts of data. As finance folks, we’re comfortable with ERPs, so we've got data in ERPs, there's tons of data in CRMs, there's data in support tools. So, there's just data everywhere now, being able to pull that data together, again the sort of forms and conclusions is really what the role of the CFO is today.
That's our general job and again, that's really why I think a platform like Prophix One is just so crucial, because if you don't have this one source of truth, it's very hard to drive the business forward and tell that story and gain insights. I mean, look, I think we've all been in meetings where half the meetings spent reconciling numbers and talking about whose numbers are right and whose numbers are wrong, right? That's a common thing. So, eliminating that is really a crucial role. This role is data steward. CFOs really have become the de facto data steward, and it's our job to bring it all together and cleanse the data and make sense of it.
Corson
That single version of the truth is so important. As you say, it's an area you could spend a lot of time debating rather than actually talking about the substance of making business decisions. Your point about the data steward is such a good one and I think the opportunity for CFOs to be helping to shape what the new organizations look like to make sure data is flowing more seamlessly through the organization, to make sure people have the right information, the right executives coming together at the right time to make well- informed decisions and so again, as you think about the role of technology in that space, as you said, you've got the backbone platforms like ERP that sort of generate and house the data that you've got technology that you can put on top of the data to drive some of that insight. As you think about that balance of data and technology, what are some of the things that you see CFOs using to address these challenges?
Levine
I think there's a legacy set of technology out there like ER finance, right? It's ERPs, and ERPs are great. They do a great job at transactional processing. We need ERPs, but ERPs are not great at reporting, planning, forming insights and really, that is the piece that closing the books is table stakes. Driving the business forward through data, as we discussed, is really where we're headed here and I think again, with the proliferation of tech stacks, bringing it together is hard. So, I think as you look at new tech, new age software, figuring out how these systems integrate. Integration is key.
Everybody says they can pull data from everywhere, but I think as you're looking at new technology, double clicking on the integration capabilities is just so important. AI is another thing. We haven't talked about it yet, but AI is upon us. I think it will drive huge efficiencies inside of the office of the CFO. I think we're not there yet. We are at the early innings of it. I think there are certainly some use cases that are still developing. We've released an account rec product as an example, right? I think there's a bunch of AI functionality that will be embedded in the account rec process in terms of auto matching. People are doing really cool things with chat bots these days.
So, I think we're at the early innings of AI. AI, it’s a tool, right? It's a tool like Excel is a tool. So, I think AI has a connotation to it. It's a scary word for people, but that's how I think about it. AI is a tool, just like Excel is a tool. Excel certainly did not put accountants and finance people out of work, but it's a tool that we use to do our jobs. AI will take some of the mundane work that we do. It'll take that away and it'll really let us focus on the things that are important.
Corson
You can’t have a conversation without talking about AI right now. I love your analogy. I think it is a tool in a toolbox and I think the really important thing is to understand what are the outcomes that you're trying to drive and what are the right tools to drive toward those outcomes and so I think hopefully that starts to be the mindset people have that AI is not going to be a panacea or a silver bullet to all of these challenges.
Picking up on your point about this is the early innings, I think we're still at that point in the evolution where people are taking a new technology and applying it to an old mental model. That's a good point. We're trying to do incremental gains in terms of trying to solve some of the issues around reconciliation. To me, if you start imagining what could a world look like that is AI native and actually keeping data reconciled at source rather than on these downstream issues, I think there's opportunities there. So, as you think about the really transportive impact, are there things that you see as being potentially real game changers for finance?
Levine
Staying on the AI thread, I mean, I think what happens ultimately is, AI just becomes so embedded in all of our technology and just embedded in the way we work. There will be a world where AI is just running in the background and as you said, reconciling accounts, integrating with your calendar. Think about this, like CFOs, a lot of thing we do is manage debt. That's one thing we always do. We have monthly debt reporting. For me, every month, I have a little calendar item when the debt reporting is due.
It's usually, I put it two days before, just sort of give myself a little runway. But imagine a world where Prophix, say Prophix One right, pulls from your calendar. It knows when your debt reporting is due. It's generally the same reporting every month. It spits out a report automatically, tees it up in your inbox, and you review it and you're ready to hit the send button to the lender. So, that's just an example and honestly, I just made that up right now. But yeah, I think that's an example of how AI will become more embedded in our lives and in our workflows.
Corson
I think that's a great example. I think it's what is described as agentic AI, where AI is working in the background to manage processes, which I think is super exciting and I think your point about this is a huge productivity gain and actually, you made the point, this is about freeing up high-quality talent to do more interesting, high-value activities and so again, we need to have the conversation around talent and what the potential is. As you think about getting the right people, there's clearly concerns right now in terms of the availability of talent. How do you make sure you're getting the right people with the right skillsets and mindsets to be successful in this kind of evolving world?
Levine
I feel like it's gotten harder. I've been doing this for a while. I feel like hiring people is even harder than it was 20 years ago. There's all sorts of research and discussion about the accounting industry. Again, being a CPA [Certified Public Accountant] is not seen as cool these days, right? It's not a cool profession. I would debate that. I think we do a lot of fun and cool things like we've discussed. But look, I mean, I think hiring finance folks is very similar to hiring other folks throughout the organization today, post COVID [the COVID-19 pandemic], offering flexible work arrangements is very important to folks. Personally, I love it.
I enjoy working from home, find the right mix, but I think that's a really sought-after benefit for employees these days. At Prophix, and we really focus on our commitment to diversity and innovation. I think that's another big topic for people coming out of school these days and for that generation. We've talked about AI. We've talked about changes in the industry, right? Things are constantly evolving. So, I think fostering that culture of continuous learning, professional development, it's important to people these days and it should be.
So, I think things we do or we promote, benefits like training reimbursements, we offer time off for personal growth, we have a circle of success, a leadership development program, which is very popular within Prophix. So, these are the kind of general things that we have to focus on today that attract talent.
Corson
That's really helpful and just to pick up on your point about innovation, and I think that's going to be such an important skillset for finance professionals in the future. Again, it's not necessarily one you associate as a characteristic of finance people and particularly given the expectations, zero tolerance for failure. It's not necessarily an easy one. So, as a software company, obviously you have to be agile with your rapid growth. What are some of the things that you've done with your team to build that innovation, muscle memory and capability?
Levine
One of the things we really focus on is on the tech stack and also in terms of process improvement, we don't want people spending their time doing this sort of mundane debits and credits type work. I'm sure there's plenty of debits and credits out there to be done, but really focusing on process improvement in tech to free people up from accounts, and finance folks are, we're bright people and we're very analytical people and that is how I would love to see our team spend their time again on, sort of analyzing the data versus just getting out of some of this manual stuff that inevitably happens in an accounting and finance org [organization].
So, it's a constant discussion we have, a constant focus of the team and look, we're back office. We're G&A [general and administrative] so, our budgets are not directed toward back office, mostly speaking, right? You want to drive front office and go-to-market. So, we have to focus on doing just that.
Corson
Your point around being a back office when a cost center, I think, is a challenge, but if we're really going to deliver on this promise of being business partnering and how do we shift the narrative to actually how is finance helping with the value creation agenda? How do we measure that? How do we demonstrate that actually investment in finance can generate the return that may actually be more significant than other investments that sort of value creation to everything is such an important one and we've touched a lot on people and technology, but are there other tools and resources that you think are going to be really important for finance leaders to again, step up, rebrand finance as more of that value creator rather than just sort of protecting and optimizing?
Levine
Every job, every role has some sales function, not just work, right. You're always kind of, so I think being able to articulate the value of what we do, being able to articulate how we can help other departments and having that sort of sales mentality selling ourselves internally within the organization is really a critical skillset that not just accounts, but anybody needs to focus on. So, that is really how I position our role with the team internally and how I'd like to promote ourselves as is providing value as you discussed.
Corson
Great. That's sort of a whole question about how do you brand and influence across the organization is one that I think high-performing finance organizations and high-performing CFOs differentiate themselves through.
Levine
Everyone should sell something, early in their career. Go sell used cars, go sell ice-cream. I think it's an invaluable skillset that you'll use throughout the rest of your career and the rest of your life.
Corson
Yeah, and actually, it’s funny you said that. I say that one of the things that I recommend to a lot of our teams is the book called To Sell as Human by Daniel Pink and he makes the case that actually as humans, we're selling all the time. We just don't realize it because we're trying to influence people and hopefully, get them to move in the direction we want to go. So, that I think is a great skillset and one that actually in many cases people don't realize they're doing every day, whether it's with their families, with their co-workers, but that it's not just with selling to customers and clients.
Levine
Absolutely, yup. I agree.
Corson
Is there any specific advice that you'd give to current or aspiring CFOs?
Levine
Yeah, we talked about former relationships and focusing on the personal side that's certainly one. A mantra that I have is act with urgency. It's funny, you know people think, things go well, people think they’re, you know, geniuses. When things go poorly, everyone thinks they're an idiot, but a lot of business is really outside of your control, and I think one thing that's inside of your control is the pace in which you move.
So, acting with urgency is critical and especially in our role, we're not saving lives, but rapid fire decision-making and building that muscle is really important, right? Anything, generally speaking, any decision that we make can be corrected. If we decide to raise prices or package the product in a certain way, you know, that can all be corrected. Do it. You try, it doesn't work, you pivot back. So, acting with urgency, I think is really how I like to operate, how I'd like my teams to operate.
Corson
As we wrap-up, we have the rapid-fire questions. We'd just like to get to know you a bit better. So, how do you stay informed and up-to-date because one of the things we hear consistently from CFOs, the biggest challenge is staying relevant and then up-to-date, so how do you do that?
Levine
Yeah, I read the Wall Street Journal every morning. I don't read every article, but I certainly scan the headlines. I probably spend 20-30 minutes my morning doing that. I do spend time on LinkedIn. I'm active on LinkedIn. I listen to content such as this. I think it's really important. You know, I dedicate a chunk, as I said, a chunk of my day to doing that.
Corson
And is there a one all-time quote that you come back to and why would that be?
Levine
There is. I had this quote. I had a poster of this quote on my wall in high school. Wayne Gretzky said it. “You miss 100 percent of the shots you don't take”. 100 percent true. It's a great quote. Nothing good happens when you're sitting at home on a Friday night. You gotta do stuff, make stuff happen. Ya know I think that is also applicable to the work environment.
Corson
That's great advice and then is there a piece of advice from a mentor or someone that impacted your career trajectory?
Levine
Yeah. You know, I think we talked about former relationships and sort of focusing on that personal side. I think I had seen that earlier in my career from an earlier CFO that I had worked with who was excellent at that, and I think that's critical and that's always something I would focus on for folks.
Corson
Finally, as we talked about, there's a lot everyone has to deal with. All the stress, the pressure. As you said, we're not saving lives, but sometimes feels like the pressure is intense. How do you maintain well-being and balance? What do you do to stay grounded?
Levine
I'm going to walk through my entire morning routine now. I go for a walk every morning with my wife. So, the kids get off to school around 7:30 a.m. We walk from around 7:30 a.m. to 8:30 a.m.- 8:45 a.m. We have this loop; we live in kind of an urban suburban area. We have the same, same loop. It's about a three-mile loop, but we do it every day, rain or shine, and it's a part of my day. So, I do that. Then I get home and read the Wall Street Journal and then I go up and start banging away at the computer. But I find that as a great way to just kind of start the day off and clear your head and get going.
Corson
You're staying connected with the family and getting some reconnection with nature that's a pretty great example. So, thank you. Well, Aaron, it's been a wonderful conversation. Really appreciate you taking some time to share your perspectives with us and thanks for joining us.
Levine
Thank you for having me.
Corson
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