FINANCE PRODUCT MANAGEMENT CASE STUDY
A professional services organization had a history of providing their customers a range of service offerings that their industry relied on. As the need for greater real time intelligence grew from our client’s customer base, they sought to innovate and build upon their existing suite of offerings.
Our client assembled a cross functional software development team to build a prototype for an analytical offering to meet a need they saw developing in their customer base. However, our client was missing a product manager with the proper domain expertise to provide the developers a vision of what was essential for the product. The product manager would function as a proxy to their broader customer base, articulating a vision for the product and providing feedback to support multiple iterations of the product. CFO’s Domain identified a finance industry expert and former executive to function in this capacity.
CFO’s Domain set out to accomplish 4 things for the client:
1. Articulate a vision that was consistent with what the executive team had laid out while providing the next layer of functional business requirements the product should possess.
2. Test the features that were prototyped, providing the Development team a feedback loop that they could use to iterate upon.
3. Bring in other industry executives and peers from the CFO Domain network to function as additional feedback loops and validation for the prototype.
4. Support the product demos and vision in the sales pitch with potential customers of the product.
The client ended up with a final first version of their product that they were happy with and that met their customer’s expectations. Initial customer feedback was very positive, and the market was receptive.
PRICING CASE STUDY
The Pricing department of a large publicly traded organization produced quarterly pricing reports highlighting key metrics such as gross ads and average selling rates. The reports were consumed by Finance and relied upon for quarterly earnings calls, often being cited by the CFO. The material use of these reports necessitated that these metrics be accurate, understood, and easily attainable. The client was using Tableau as their reporting layer with a number of disparate data lakes and sources they pulled the data from.
There was no clear understanding for how the pricing metrics were calculated throughout the organization. The process wasn’t documented, and there were inconsistencies along with a lack of consensus between the Pricing, Sales, and Finance teams as to the methodology being employed to calculate the quarterly metrics. As a result, when the Pricing group attempted to make the Finance group accountable for these reports, there was hesitation to assume this responsibility.
Additionally, the data sources for the reports were not clear due to the multitude of disparate data sources that pricing had to pull from. This created the need for manual compilation of the data and created complexity which increased the risk of human error. The process being used to produce the reports also appeared to lack controls and a formal review process that would have otherwise reduced the risk of error.
CFO’s Domain set out to accomplish 5 things for the client:
1. Understand, validate, and document the current methodology being employed to produce the reports and explain it to the stakeholders to build consensus around current state.
2. Implement any necessary changes to the current methodology to align it with the organization’s standards and ensure the next quarterly report will have greater integrity and a data review and validation process.
3. Work with IT and the Business to explore areas for automation in the production of the report to reduce the risk of error and to streamline the process.
4. Work with the Business to validate the KPI’s being used and explore whether alternative KPI’s may better portray the health of the Business.
5. Document the changes made, present them to Finance and Pricing, and train Finance as the new owners of the process.
After gaining cross department consensus and improving the process for producing the quarterly key metrics, CFO’s Domain renewed the level of confidence in these reports for the key stakeholders. As a result, the Pricing department was able to successfully migrate the production of these reports to the Finance department freeing them up to focus on more value-added analysis for the organization.
AUDIT PREPARATION & TECHNICAL ACCOUNTING
A clinical-stage biotech company with international subsidiaries needed a multi-year inception-to-date audit performed. The client had completed various financing rounds and the Board of Directors required an audit be completed prior to any future rounds of capital raising.
The client did not have the technical knowledge or experience in-house to prepare for and complete an audit in the time required by an outside firm. Additionally, much of the institutional knowledge of the client’s financial operations had left with prior employees and there was very little documentation available to support historical transactions.
CFO’s Domain set out to accomplish 6 things for the client:
1. Understand the client’s business and perform a review to determine and address gaps in the financial and accounting records.
2. Work with the outside auditor and internal stakeholders to compile and prepare documentation included in the PBC request.
3. Identify the technical accounting disclosure requirements and perform relevant analysis to understand any gaps in compliance for items such as equity, foreign currency, revenue recognition, purchase accounting, and lease accounting.
4. Draft technical accounting memos to address company’s business processes and level of GAAP compliance.
5. Work with the outside auditors and internal stakeholders to address comments and remediate any concerns.
6. Advise on any necessary changes to current state accounting processes to improve the client’s level of GAAP compliance and prepare the groundwork for the next annual audit.
After helping the client prepare for and lead them through their first outside audit, the client was able to issue audited financial statements by the deadline given by the Board of Directors and position themselves for future rounds of financing. Feedback from both the Board and the auditors was extremely positive.
INTERIM SENIOR FINANCIAL ANALYST
Our client, a large high-growth OTT media company had several business units spanning across the country including Advertising Sales, Audience Development, and Inventory. These business units required strong financial support with respect to reporting, analytics, and partnership. In order to keep pace with growth, the business was attempting to rapidly scale their finance team.
The company struggled with identifying the right full-time resources quickly enough to meet the growing demands of their business. As a result, data took longer to assemble during reporting periods and elongated the close. Deliverables fell behind and the current finance team was stretched beyond their means.
CFO’s Domain allocated an industry specialized finance resource with digital streaming and advertising experience to address the following key deliverables:
1. Drive the revenue and operating forecast model for domestic and international advertising.
2. Streamline the forecasting templates being utilized for video inventory reporting.
3. Compile and execute analysis against quarterly commission reports.
4. Support buy-side analysis and modeling for an acquisition.
5. Build automation into expense reporting for international advertising.
6. Document desk level procedures to support changes made to each model.
As a result of our consultant’s ability to quickly provide value to our client’s business units, they continually extended the duration of his engagement to allow for multiple full-time hires. The client was able to fulfill their hiring goals while providing the business the support they needed in parallel.
TECHNICAL ACCOUNTING MEMOS & FIRST TIME AUDIT PREP
Our client is a high-growth, vertically integrated agricultural wholesaler, distributor, and retailer undergoing their first audit and review of financials spanning from the inception of the business to their most recently completed fiscal year end. Technical memos for ASC 606 and ASC 842 needed to be created for fiscal years ending 2017, 2018, and 2019.
As an early stage company, the company lacked internal technical accounting capacity and capability. Additionally, written contracts with customers to substantiate their revenue agreements was missing in the early years of operation. With respect to ASC 842, many of the leasing schedules and agreements were incorrect and complex due to the terms being employed. Additionally, the client had a tight deadline to complete the audit with a round of financing contingent upon its completion.
CFO’s Domain set out to address 5 key concerns for the client:
1. Our consultant was retained to do a comprehensive assessment of the organization’s current and former sales/distribution model and a review of their lease agreements to understand and provide the basis for compliance.
2. As an alternative to using sales contracts in the early years, our consultant was able to leverage sales receipts as contracts, interviews with key stakeholders, and a review of the ledger to reach initial conclusions around current and prior business processes.
3. Our consultant’s collaboration with the client’s external auditor was critical to ensure that the positioning and methodology being applied was in alignment with the auditors’ expectations.
4. In a matter of weeks, our consultant was able to comprehensively analyze the company’s leasing and revenue processes to provide the basis for her technical memos.
5. Upon completion of her position papers, our consultant also identified areas where the client could adapt their current processes to strengthen the degree of their compliance with the new standards.
Our client was able to get a defensible set of technical position memos from our consultant that enabled them to complete the audit on time and to subsequently secure the financing round that was critical to the growth of their business.
PROJECT MANAGEMENT DELIVERY
Our client, a global media entertainment services organization grew quickly via M&A. Their service offering was vertically integrated across competing sectors, offering them opportunities to enter new markets via acquisition.
Often the companies that were acquired were small businesses locally operated with legacy infrastructure that made technology integration extremely difficult. Over time, this issue compounded with more acquisitions producing more silos of data and an encumbered corporate consolidation process.
CFO’s Domain set out to work with the client in providing them a skilled Project Manager with executive level program management experience to manage the implementation of a technology solution that would streamline the manually intensive period end consolidation and reporting work. Our Project Manager was able to accomplish the following:
1. Direct and manage a cross functional team to gather and document business requirements from key stakeholders in the business.
2. Manage the vendor selection of an Enterprise Performance Management (EPM) cloud solution that would support corporate consolidation and budgeting and planning.
3. Implement Agile methodologies and techniques through various phases of the project.
4. Manage the executive level communication streams and the steering committee on project updates and potential risks / opportunities.
5. Coach and work with cross functional stakeholders to align interests, identify risks, and to explore trade-offs.
6. Partner with the 3rd party implementor and negotiate credits where delays and issues occurred.
7. Oversee functional and user acceptance testing.
8. Work with the project team to develop a post go live hypercare plan.
After a successful implementation of the company’s new EPM cloud based solution, accounting and finance was able to significantly reduce the time allocated to consolidating the financials and doing the forecasts during their period ends. This enabled them not only to focus on more value-add activities, but also increased the overall level of job satisfaction in the finance department.
INTERIM FINANCE EXECUTION
Our client, a publicly traded oncology therapeutics company lost a critical finance director. The company had several assets in clinical trials moving from phase 1 to phase 2 and budgeting and forecasting for this evolution was critical.
As a publicly traded company, our client had tight reporting deadlines. The employee who left was responsible for most of the tactical compilation of data, analysis, and review used for the annual budget, forecast, and long term plan. They had institutional knowledge around business processes and systems that added to the capacity constraints already in existence with the remaining finance team. The company was at risk at of not meeting its reporting deadlines or producing accurate forecasts until they filled the vacancy and ramped up a new hire.
To bridge the transition, CFO’s Domain allocated a life science industry finance expert with the requisite technical, industry, and systems experience required to immediately hit the ground running to address the following key deliverables:
1. Asses the company’s business processes through a review of their financial statements, schedules, and templates.
2. Interview key stakeholders, and review their primary concerns and goals.
3. Build out the long range planning model by preparing clinical development cost projections based on key assumptions around patient data by studies and program.
4. Prepare the Q2 forecast vs actual analysis including compensation and benefits, department and program expenses by function and cost center.
5. Upgrade key models by partnering with finance and R&D stakeholders to introduce a driver-based Excel model with scenario analysis layered in.
6. Clean up and improve several important templates used by the business to populate monthly and quarterly revenue and expense data.
7. Create alternative account hierarchies in the company’s planning tool to align with the company’s ERP system.
8. Mitigate future risk of employee turnover, by documenting forecasting and reporting processes, as well as help develop training and transition documents for a new full-time hire to move into the role.
Our client was able to meet their reporting deadlines in spite of the turnover in the finance group and was left with a stronger set of processes, controls, and templates. Our consultant afforded them the necessary patience to conduct a full-time search and to bridge them to the onboarding of a new hire.
Our client, a $2B global platform technology company located in Northern California was recently taken private by Silverlake Partners with an aggressive plan to invest in the company’s finance and reporting infrastructure. The company kicked off a 6-month systems implementation initiative to migrate over to a new planning tool (Host Analytics/Planful) that would provide for enhanced capabilities and more timely reporting to the executive team and board of directors.
The company is in the financial payments domain and had millions of transactions that flowed through their systems on a daily basis. Additionally, they are a global organization with consolidated international entities and currencies that added to the complexity of the business. Our client engaged a 3rd party management consulting firm to help with the design of the new system. In the early stages of planning however, the client lost an internal employee that was responsible for managing key phases of the implementation. They needed additional capacity quickly to keep them from falling behind.
CFO’s Domain set out to address 6 key concerns for the client:
1. Identify and bring in a resource with relevant financial systems implementation experience that could help the company manage internal business relationships and support the tactical execution.
2. Take over the business requirements documentation process from the prior analyst and finish stakeholder interviews.
3. Produce functional business requirement documentation that was usable for the external and internal technology teams to convert to IT requirements.
4. Work with IT and the 3rd party consulting firm to help with configuring dimensions and data hierarchy in the new tool.
5. Validate the integrity of the data sources and assist with data mapping and uploads to test the data.
6. Work with the business to support user acceptance testing and assist with training documentation and desktop level procedures.