Autonomous IT

Evan Kiely (00:00)
Buckle up for a new episode of Executive IT, Autonomous IT's podcast made to equip you with the knowledge to make informed decisions about how best to help guide your organization towards smarter or efficient IT investments.

Evan Kiely (00:30)
In this episode of Executive IT, we're thrilled to have guest hosts Ziad Fanous, CFO at Automox, alongside David Mehok most recently the longtime CFO of Q2. Thank you both for taking the time to chat through some

exciting topics with me today. David, you want to tell the audience a quick bit about yourself?

David Mehok (00:50)
Sure, Evan. Thanks for having me first. I've been around the Austin scene now for gosh, every time I calculate this number, it sort of blows me away. It's been 30 years now since I've come down to Austin. And I came down here from my MBA at UT and from there I went into Dell and that's where Z and I's paths cross numerous times. We have a lot of war stories from our years at Dell. I was there for 18 years.

11 different roles in those 18 years. I was fortunate in terms of my experience, my ability to move around the company. But then from there, I took on my first CFO job for a company in town that was well outside the realm of anything I understood, which is energy efficiency. you know, going from hardcore tech to energy efficiency was certainly a learning experience for me. And it was a company called Clear Results, as I said. So was there for three years as the CFO, then moved over to Epicor, which is ERP software.

I was there for another three years and it was private equity backed. went through sales from another private equity company and I was really fortunate to get the opportunity Q2 and joined Q2 in 2020. Was there for over four years, had a great run, fantastic experience. And now I'm sort of moving into a semi-retirement mode, I guess is one way to describe it.

Evan Kiely (02:04)
Awesome, awesome. Great to have you here. Ziad, you're up.

Ziad Fanous (02:07)
Good. So, I'm Ziad Fanous and the CFO of Automox. And like David said, we've known each other forever. He said he's been in Austin for 30 years, but I've been in Austin for 32 years. So I'm a little bit older than David. I still remember the days we were like financial analysts over at Dell and I didn't count the jobs I had there. I was there for 15 years. I was at IBM before that for five years, then Dell for 15. So the first 20 years.

being in Austin, worked for Big Tech. And then the last 12 years, I've been in the SaaS space, basically, PE-backed SaaS companies this is my third CFO role. And like I said, I've been at Automox for almost four years.

Evan Kiely (02:49)
Awesome. Again, thank you guys for taking the time. With that, if y'all are ready, I'll kick it off with the first topic.

Ziad Fanous (02:57)
Good.

Evan Kiely (02:58)
So broadly speaking, over your careers as CFOs, how have you guys seen IT transformation impact your business? Any specific learnings from these experiences that you've taken over the years?

Ziad Fanous (03:12)
David, to start?

David Mehok (03:12)
Yeah, I could start and

see, obviously add on, you've got a lot of experience with this as well. The first thing I'd say is, it's sort of prefacing my answer by the biggest mistake because I think it weaves into sort of what I've seen work well and where I've seen that that kind of transformation be effective. The thing that I've seen, and I've made this mistake, which is why I can very humbly sit in front of you guys and tell you about this.

is try to slap an IT tool, no matter what that IT tool is, and it can be a point-based solution, it can be something more comprehensive, but try to slap that in a problem and don't change the processes around it. It is a absolute recipe for disaster. I've seen it fail over and over again. I don't think I've ever seen it succeed. So that leads me into sort of answering your question. I think where I've seen it be highly, highly effective is

One, when you have an overarching objective. So you've got to be clear on what that North Star is for the endeavor. And if you have alignment across the organization to accomplish that North Star, and then you create alignment, next step, which is creating alignment around what you need to get there. And that's going to include the IT solution, but it's also going to include some pretty significant change management understanding around some of the processes that need to be changed across the organization.

So if you can align those things, get the mission aligned, make sure that everybody understands why we're doing what we're doing, the steps that it takes to get there, and then making sure that everyone's open to changing some of the things that they're doing. Because that's where you have the visceral reactions, or what I call the organizational antibodies come out, is when you're changing somebody's role, task, the way they do things, even a keystroke, without including them in the process, without having them feel like they're...

They're part of a bigger endeavor that's going to help the company long term or even help that individual longer term.

Evan Kiely (05:05)
Yeah, it's a lot of organizational inertia to change that you got to overcome. You got to get the buy-in from the stakeholders, right? That's the end.

Ziad Fanous (05:11)
Yeah, and I'll just, well, I'll just add to that. So David

explained it perfectly. I'll go back just to kind of, you know, part of your question was, was evolution of kind of the sat, the tools, IT tools and so on and the industry. But I think about when David and I were at Dell, you know, if you think about it, didn't hear about security issues. mean, there, I guess they were there, but we just didn't hear much about them.

Everything was kind of you know physical touch labor if you think about it, know, we do we do, know patch and configuration management that really wasn't around or it was very rare to need to do it minimal Everything was kind of physical media and now when you think about evolution think about all the mobile devices That's not that now have become a lot more capable. So even ten years ago their mobile devices, but they weren't like they are today You know, you've got

a lot more security issues. The patching of those is more reliable, but it has to be. And it's more real time versus like you've got set schedules to do things you have to be able to react really quickly. And then if you think about everything, you shift it from physical media to like basically SaaS delivery, which makes it a lot more effective and a lot.

things a lot quicker. a huge, as everybody knows, you look at a graph, any graph, and you see that like SaaS products supporting IT growing exponentially over the past even 10 years.

Evan Kiely (06:36)
bigger emphasis on efficiency and speed to market type of processes today than maybe 20 years ago back at Dell with both y'all.

David Mehok (06:45)
It's really trying to change the paradigm of what the teams are working on. That's one of the bigger projects that I tend to gravitate towards is how can we, mean, everyone has this defined role and preconceived notion around what their jobs can entail. And most people walk into a role and find a lot of it is a lot more mundane and working through spreadsheets and trying to bridge versus the things that they really want to focus on, whether it's some kind of strategic endeavor or actually driving actionable insights in the organization.

And most of the IT transformation security is completely different and super important, but most of the other ones that I've seen have to do with freeing up people's time so that they can do those things that are a lot more value add. And if you think, you know, one of the outcomes or objectives of one of these transformations is, you know, you're going to completely change what people are doing on a day-to-day basis and really focus them on the things that they probably want to do and they're going to have a bigger impact on the organization.

Evan Kiely (07:39)
Yeah, that's David. Great, great topic. Great segue into the next one. Something that we've seen accelerate in recent years that this trend in the IT space specifically around tool consolidation. So how do you two as CFOs balance the pressure to cut costs, consolidate tools while also managing overall business risk and the need of the business to be more efficient, be more agile, do more with less.

Ziad Fanous (07:59)
..

Yeah, mean, it's been happening in the industry for a while now. SaaS companies buying other SaaS companies to make a comprehensive product. And it can definitely benefit the customers, could benefit the organizations. But you have to be careful at end of the day. You could be buying a comprehensive package that has everything you need, but they've been pieced together and maybe the pieces aren't really that great. And so you have to be careful not just to go off to save money, just to consolidate tools.

because sometimes it's good to just get the individual tool by itself because we see it everywhere, like sales tools, mean consolidation of whether it's Salesforce with all the analytical tools, know, the integrations into different tools and now they...

You just have to be careful because you don't want to get overly complex by going to consolidation just to save a little bit of money.

David Mehok (09:03)
Yeah, it's a great point and I get worried about that term vendor lock-in. I do. And what I've seen, because I've seen it play out and I've seen it play out in ways that I don't think anybody intended as the relationship built with one vendor, but it can be very detrimental. What I mean by vendor lock-in is

The more that these to Z's points, first and foremost, make sure you understand whether or not they are tightly integrated. Make sure you understand if there are synergies and ultimately benefits for your organization. But if you can check all those boxes, you also have to be careful of how much of your spend now is being directed to this specific vendor and make sure you clearly understand the contracts. And if you find that one of those point solutions is not working at a given point in time, and for various reasons, you need to move off that solution.

What I found is those larger vendors tend to try to raise the prices than the other things they're selling you. So that's where I sort of get back to make sure you understand your contracts. That's just one example of it, but it's critically important. One, and two, just understand if they do, to Z's point, make sure that you understand if they do, you do get benefit out of those tools and holistically versus point solutions. And three, make sure that you're always still going through an RFP process and looking for best in breed.

Because you know, just because a large vendor of yours acquires another solution and one that you may need doesn't mean that that's the best one for your organization. So don't fall for the first sales pitch. Make sure you really scope the environment, understand what the best solution is for you. And I generally like best in breed by also have, you know, having worked at two software companies previously. Conceptually, we still love to sell the concept of, you know, one throat to choke and

So I'm talking out of both sides of my mouth, one, know, preliminarily in this conversation as a CFO, but then, you know, now I'm flipping around to as somebody that's sort of trying to sell software. I do think that there's advantages to some of them if they are tightly integrated and if holistically the solution is better than, you know, the individual point solutions independently. But I think they're certainly balanced in this equation and you got to make sure you're thinking through all the variables.

Evan Kiely (11:18)
Yeah, balance is the topic.

Ziad Fanous (11:18)
I totally agree. It's

just about always do your diligence. Go through RFP process, test all the products. And again, it's not always about saving money upfront because if you do that and you have the wrong tools, you're going to pay for it. Whether it's cost of resources, compliance, things like that.

Evan Kiely (11:38)
Yeah, on that topic, you guys as CFOs, look at hard savings, dollars that you're saving the business, but there's also this kind of secondary aspect of soft savings and time savings, right? It's a balance, like you all said, do your diligence, understand the processes and find that balance, right?

Ziad Fanous (12:00)
Well, exactly. And you said, you know, we look at hard savings first. honestly, I don't know that that's true. That's a really important point to look at hard savings. But, you know, my first questions to people bringing up a tool to me is like, okay, what does it give us? know, can it scale as we grow? Can it scale with us? And it doesn't have to scale with us, but is it the right product right now? And then, you know, in terms of savings, does it provide

opportunities for our resources to do other things, value added things that could create savings long term and efficiencies. And then we obviously are going look at the cost of the different tools and that's part of the decision making. But it's such a, it needs to be a holistic approach to things.

David Mehok (12:45)
absolutely agree. the one thing along with that whole, you've got to make sure you don't over commit and under deliver in terms of the savings. And you have to make sure you have the ability to track them going forward. if the intent is an easier intent would be obvious. So what I talked about before where you're shifting work, shifting work is something that is somewhat qualitative in nature. And but you can still measure it. You can still have surveys of the employees and they can tell you what their percentage of work is. That's a pretty easy one. Right. But then if you start

trying to put soft savings together, particularly around things like productivity, it becomes a lot harder. And I'm always a little bit apprehensive. I think you should absolutely talk about that qualitatively. But to quantitatively put it into a business case is just fraught with risk because what ends up happening is, yeah, you ended up finding efficiencies within a department where they can go from 10 to eight, but guess what? You didn't cut two people out of the organization. You redeployed them to do other things, which is great.

But when somebody at the end of the year later, two years later says, hey, we want to your results against that business case, it's going to be very difficult for you to say, yeah, we actually saved to the cost of two individuals because you didn't. Now there's other things that you save. So have to make sure you're measuring the right things, make sure you set the right expectations. And I'd be really careful about trying to quantify productivity enhancements unless you really think you're going to be moving people out of the organization.

Normally isn't the intent of a lot of these.

Ziad Fanous (14:12)
Yeah, agree. It's not the intent to do that. But what I would say is create, you know, the business case of what are the metrics that you can measure? They're always they're never always perfect, but you can think of a billing tool, right? Can we can we implement a billing tool, for example, and not have to add, you know, billing specialists over time so you can go back and say, well, how many, you know,

Evan Kiely (14:34)
Thank

Ziad Fanous (14:34)
are they handling

today? Is that growing going forward? Is the tool helping us do that? But set that up front so you can go back and measure it. And that's the key is to be able to go back and measure it. Because when the next tool comes up, you want to be able to say, this is how we measured this tool. It was successful or not successful. How are we going to measure this next tool that we're looking at?

Evan Kiely (14:52)
there.

David Mehok (14:53)
You know, it's in that that actually is there's one more thing that ties into that, which is I think when you're putting together this business case, make sure that you're asking some of the subject matter experts like Z or you were sort of detailing some of the things that you might not have thought of to quantify or put in a business case. What I've learned and this is not the way I approached it first few times, but you you certainly hopefully we're all a product of our learnings and I certainly am.

You've got to make sure that you, one, reach across the organization and try to get independent variables around what they think success looks like and then how to quantify that. In other words, don't just rely on the leader in FP &A or the leader in IT or whoever's leading the project to come back to you with a business case. Make sure that you're vetting all of those inputs with the organizations that it's impacting. That's sort of one. The second one is...

The vendors that you're working with are smart folks. They understand the tool better than anyone. They probably help put together a lot of business cases for the board. Now I wouldn't take it as gospel, but ask them for a business case. They're gonna ask you all kinds of questions around, know, what's your intent and what are savings here and X, Y, and Z. And that's fine.

But then you can marry their business case, which is usually more aggressive, but it's a good litmus test. Marry their business case against the business case that you've got internally, and you may miss some things. And so it's always just a good validation point to have the vendors or even the implementation teams that you're working with do their own business case.

Ziad Fanous (16:21)
And one more point on that. One more point. Because David, you brought something up that I was thinking of. So the owner of this, the one that wants to go sell this to us, let's say the IT ops director and so on.

Evan Kiely (16:21)
You guys beat me to the next question. Yo. Yeah.

Ziad Fanous (16:39)
The key for them over time is to make sure they are showing executives the benefits of those tools. Because I've seen it too many times, heck I've seen it from our perspective when we sell this great product to customers, but the executives don't know about it. When it comes time to cut costs.

Evan Kiely (16:51)
Yeah.

Ziad Fanous (16:57)
I want to know continuously what that product is giving us because otherwise, you know, hey, I've got a good cause, you got to go find another tool when in reality, maybe that tool is providing a lot of benefits. So as the owner of the tool on the operations side, make sure you always have executive alignment ongoing, not just when you buy the tool, but ongoing.

Evan Kiely (17:18)
Yeah, defending your investment with tangible metrics before and after or continuing metrics of cost savings or efficiency gains or risk avoidance, stuff like that. Being able to communicate that is key.

Ziad Fanous (17:31)
Exactly. Right. Because some of these,

right, some of these tools are kind of hidden, right? You don't really see them day to day, but they're doing a lot, right? Maybe, you maybe it's this critical tool for compliance, for example, that you don't really know it's behind the scenes.

Evan Kiely (17:46)
and

and you guys are, you know, as CFOs, every now and then you guys are going to come knocking. We need cost savings. The business needs to kind of tighten the belt, right? The easiest way to defend your investments is to be able to shoot, show, improve the value, right? Explain the value and something tangible, right? So that, you know, the IT practitioner, their tools aren't first on the chopping block because we don't know what they do, right? Compliance tools hiding in the background. You guys want to know, show me that the risk avoidance, show me the

Compliance improvement, right? Stuff like that helps kind of tell the story, sell the story about these tools are critical to the business success and they do not belong on the cost savings projects.

Ziad Fanous (18:29)
Exactly.

Evan Kiely (18:31)
Yeah, so I guess last bit, you guys have touched on kind of a lot of budget requests and topics. Any last advice for our IT and security listeners on best ways, most effective pitches or ways to communicate with their finance teams on these budget related requests? You guys mentioned business cases and cross-functional alignments and proactiveness. Any final thoughts on that?

David Mehok (18:59)
me, mean, one of the big ones is just be honest because I've seen people come forward with business cases that are just fraught with exaggerations and maybe they're trying to figure out what they think we want to hear versus just being honest about what the intent is because I'm happy to work with folks that have a really solid business case for things that really aren't as quantifiable. Now, we're going to sit down and really pressure test that and make sure that

those non-quantifiable things really benefit the company and then myself, my team, we have to make sure that we do our best to quantify that non-quantifiable in our mind. But I would strongly suggest that you're honest from the outset about what the intent is. And the other thing that I would say, and this is not about bringing into us, but make sure that you do a thorough job before bringing it for financial approval.

to get alignment across the organization around all the parts of the organization that the project is gonna impact. what I'm gonna do, the first one of the first things I'm gonna do, if this is like the IT team and the finance team brings me a CRM solution, first thing I'm gonna do is call up the head of sales, say, okay, are you aligned with this? This is the benefits that the teams are talking about. Do you agree with that?

So make sure that you go through that alignment process. Make sure that it's not just about what you, your team, and even your broader department need, but it's about what's best for the organization because that's going to be one of the first things that I'm asking is making sure that you've had those conversations.

Ziad Fanous (20:36)
Those are great points, David. And we talked a lot, a little bit about some of the stuff that I would ask and for them to bring to us as part of the business case. Like again, is it scalable as we grow? If we're a growing company, is it scalable? It doesn't mean it has to be a company that supports us when we're two or three times bigger.

But it needs to be something that can support us now and potentially scale this. If not, you have to look at those different costs and benefits.

So adding to what David said, he had good points there. First of all, and we talked about this earlier, can this tool scale as the company grows? It doesn't necessarily have to, but that's something that should be under consideration if could do that. Time to value, right?

you know, how quickly can you implement this? I've seen tools where somebody gets hooked on a feature and then frankly, you know, even in the finance area, we love this tool, we bring it in, you know, it doesn't really work with our integrations and what we wanted. This one feature that we really bought it for, it doesn't really work. And it's tough, but I would just drill into it, right? You know, obviously get, know, have the vendor.

give you good references and drill on those references. The references they give you are gonna be ones that like the product, but drill in terms of how long it takes to get it set up, what speed bumps did you hit, these features that you like, how long did they take to implement, do they work, et cetera. So just make sure you go through that kind of diligence. Again, all those things are before we even talk about cost. I like to actually talk about cost.

not upfront because I don't want it to be about cost. want it to be about does this product help us get to where we want to go? Does it make us more efficient? Does it, you know, to David's point earlier, free up resources and, you know, allow us to run the business more effectively across the works to David's point. And then we can talk about cost after that because ultimately the procurement guys in the companies, they're going to push as hard as they can on cost. But at the end of the day, I will say this.

I will pay more for a product, a little bit more, but I'll pay more for a product if it gives us what we want. It's not always about the cheapest cost.

Evan Kiely (22:52)
David said it earlier too,

It's not, know, best in breed, best in class. That's great, right? Not always the, you know, the necessary path, right? To this procurement, solving it, you know, solving it through procurement. Ziad, you mentioned value, right?

Oftentimes we all as finance professionals, kind of get pigeonholed into cost, right? Let's look at the cost and it's not necessarily you all are saying it's not necessarily the cost that is a factor, right? It's more so about the value that it brings the business and not necessarily just dollars and cents give me the cheapest option possible.

Ziad Fanous (23:32)
Exactly.

Evan Kiely (23:36)
Alright, well that's all I got for you guys today. I want to say a special thank you to both of you for taking the time to chat with us. Appreciate all the insights that you all brought to the pod today. Any last remarks?

David Mehok (23:53)
No, thanks for having me. I appreciate it. been fun.

Ziad Fanous (23:55)
Yeah, David, thanks for joining. Good to see you again. You, everybody kind of figured we'd know each other for a long time. He's been calling me Z the whole time, which, which, uh, you know, but no, it's all good. It's all good. It's all good. We've known each other for a very long time. So thanks David for joining and thanks Evan for, moderating and, and, uh, yeah, appreciate it.

David Mehok (24:04)
I always forget about that, sorry Ziad.

Evan Kiely (24:14)
Yeah.

With that, we'll say thanks for tuning into this week's episode of Executive IT. Join us next month when we discuss procurement strategies. Thanks, y'all.

Ziad Fanous (24:27)
Thanks everybody.