The State of Strategic Finance in Q3 2023

[00:00:00] Joe Michalowski: Hello, and welcome to another episode of The Roll Forward podcast. My name is Joe Michalowski and this episode is brought to you by Mosaic, a strategic finance platform that transforms the way business gets done. And today I have an interesting episode. First of all, two guests, a little bit unusual for us, but I get, two of Mosaic co-founders.

[00:00:15] I have Bijan, our CEO, and Joe Garafalo, our COO. Bijan and Joe, thank you so much for being here.

[00:00:21] Bijan Moallemi: Thanks for having us, Joe. really appreciate it.

Introductions

[00:00:23] Joe Michalowski: Yeah, I, uh, Nobody knows this. they, I guess they will by the time it goes on, but, uh, we just had BC on the podcast, so this is the finishing off the trifecta of Mosaic Co-Founder. So I’m excited have you guys both here. but I want to get right into it. So I’m gonna skip the, the, you know, pleasantries of the bios.

[00:00:39] anyone listening if you wanna learn more about Mosaic and the work and the story that Bijan and Joe have gone through, it’s all over our, our website. Please get to it. but we have a lot to cover and I want to get right into it. And we’re gonna be kind of doing a state of strategic finance, angle here.

[00:00:54] And so where I wanna start is just, anecdotally, even since I started here in, in 2020, And I’m sure when you guys started in 2019, this space of finance software has gotten very crowded, even just in the last like few years. And so a lot of companies are adopting this language that you guys sort of kicked off, which is like strategic finance.

[00:01:14] And so I wanna set the record straight of just what this term means to you guys as like the first strategic finance platform. And so, Joe, I’ll kick it over to you. Do you want to just give everyone the rundown of what we think strategic finance really, really means in this world?

Defining Strategic Finance

[00:01:29] Joe Garafalo: Yeah. Yeah. I think before we get into the exact meaning of it though, I wanna start just with a, a quick story. So, Biajn and I, obviously we met in 2012 working at Palantir, and Palantir was in hypergrowth mode, and it was an unbelievable place. And we were over in our, our lunchroom, which was like this massive warehouse and we had kind of the best food under the sun.

[00:01:50] I think like my very first day there was like quail, eggs and lobster and I was in the lunch line and Dr. Carrp, who’s the C e O of Palantir, he just came up and cut me right in line. And he’s like, Joe, right? And I was like, holy crap, this guy knows my name. And, he’s kind of this like legendary figure.

[00:02:06] And I’m sitting there like blown away that he, the guy knows my name, has said hello to me. and then he goes like, you’re a bean counter, right? And I was like, oh man. Cuz I was on the finance team and I know he meant it with like the best intentions, but, I took it a little, a little deeply, right? I felt like the work that we were doing at Palantir at the time was like so critical and revolutionary.

[00:02:25] Like at the time when Bijan and I first joined the company had no budget at all. Like no one across the business had ever seen the spend, and we were working on this project at the time, we called it circuit breakers. And Circuit Breakers was like the very first attempt that we had to go deep within all of the company’s data and segment it by department, understand how much each team was spending and what the forecast for the year should be.

[00:02:50] And it was so many late nights and so much data clean up. And we’re killing ourselves and we’re like feeling like we’re doing the most important work under the sun. and we’re getting like this bean counter title. And, like I still, it still hurts me personally to this day because it felt like the value that we were adding was so much more than kind of the credit or the respect that we were, were getting from the rest of the org.

[00:03:12] So, the role of strategic finance to me has, has really evolved. The job and the responsibility of finance professionals inside not only tech companies, but but any company. Right. And I think to kind of go more into the definition, I think in the realm of modern business, like the role of finance has evolved so much more than like the mere number crunching or the bean counting, right?

[00:03:34] So strategic finance kind of has emerged. There’s this pretty dynamic category that goes well beyond traditional finance and accounting responsibilities. And to me, I think it combines. Financial expertise with strategic decision making that drives a business’s growth, helps them optimize resources, reduce spend where it’s not needed, and essentially maximize shareholder value.

[00:03:58] That’s like the ultimate long run goal. I think it’s gaining a lot of prominence because the landscape of business, I think has changed, right? It’s a lot more complex. Than it used to be. And like as the landscape gets more complex, it demands more from professionals who can provide strategic insights and decision making at a much faster pace, right?

[00:04:18] Like we have Amazon Prime, you could order a package the next day, it’s there, it can’t, it can’t take you three weeks to, to get the business what they need or help them make a decision. So as organizations strive, more and more to navigate some of the uncertainty. financial leaders play this pivotal role and their role is to chart the company’s path to success, find the potholes that are gonna be in the road and help help the company avoid.

[00:04:46] Those potholes. And over the last couple weeks, years, months, we’ve seen kind of unprecedented events that have disrupted the normal course of business. We can talk about the pandemic, we can talk about the bank failures. We can talk about First Republic. But on top of that, right, like there’s just more and more data, more and more advancements than ever before.

[00:05:06] And I like to, to think of those technological advancements that just create this digital exhaust, right? And every system, every tool, every output that happens digitally can be boiled down into dollars and cents. And the role of a strategic finance team is to understand what that digital exhaust is and then figure out how to use it to make decisions.

[00:05:29] More importantly, profitable decisions. so I think strategic finance really helps leverage technology and tools to analyze data forecast trends, identify opportunities and risks and empower teams to kind of move beyond this historical, box that that finance was kind of put in, uh, a lot of it, the, the bean counter comment.

[00:05:51] So, I’ll leave it at that, but that’s, that’s my shtick.

[00:05:56] Joe Michalowski: I love it. Bijan, would you add it? First of all, love the Amazon Prime as, sort of the vision of strategic finance, like be the Amazon Prime of the financial insights in your business. Also, the Dr. Carp story, really funny, but Bij, anything you would add? About the definition or even uh, a follow up I had was like, things people get wrong about strategic finance or the way we see other people kind of adopting this language.

[00:06:18] Would love your, uh, your input there.

[00:06:20] Bijan Moallemi: yeah, so a couple things. I think the definition is spot on, I definitely think about things the same world. Quick aside, in terms of the Dr. Carp story, Joe mentioned that he was eating like lobster and quail eggs, and when we actually dug into the meal spend, we realized that in Palo Alto, our Palo Alto office, I think meals were a hundred dollars per person per day.

[00:06:39] And so obviously as part of that circuit breaker work, we’re still getting top of the line meals, but, not quite lobster and, and quail eggs after, after a while. So it meant that we were starting to do our job there. to your point, Joe, I think so there probably is something that, that people get wrong, right?

[00:06:56] Joe talked about kind of the, the blood, sweat and tears and a lot of the data manipulation and pulling data from systems. I think what folks typically get wrong is that strategic finance, like you don’t just. Do strategic finance. You can’t just hire someone and suddenly your finance function is strategic.

[00:07:14] Strategic finance is really an end state, this nirvana state that you strive for. and there are no short shortcuts. I think to Joe’s point, it really means have you set up your systems correctly or you tracking the things that matter the most to the folks across the business. and then it’s being able to do a lot of that work.

[00:07:32] That typically isn’t seen, that’s happening behind the scenes, pulling data, cleaning data, augmenting data, manipulating it, transforming it, and then you get to something that can be strategic. So, I think that’s probably where folks get it wrong, is that strategic finance isn’t the starting point. It’s kind of the end state that, that you get to, and there really aren’t any shortcuts.

[00:07:52] You gotta, you gotta put in the hard yards to, to be able to get there.

[00:07:58] Joe Michalowski: I love that. I love the idea of strategic finance as sort of the, the Nirvana state. I think it’s a really good way to put it, and I think it’s why. It’s one of the reasons why, we kind of wanted to do an episode like this and, maybe a series of them like that we could do quarterly, because there’s always gonna be things that are changing in that definition.

[00:08:18] Like there is the core, that Joe framed really well. but we’ll want to talk about trends and things that are going on in the world and in like, just the space of the technology that are changing, what that definition really means in practice. And so that’s kind of what I want to do. right now is sort of continue setting that stage.

[00:08:36] And Joe, I’ll kick it back to you as we head into Q3 2023. We’ll get into some trends in a little bit, but can you just set the stage of where strategic finance fits, like right now with the economy, where it’s at, where, where the world is at the moment?

Strategic Finance Trends in Q3 2023

[00:08:51] Joe Garafalo: Yeah, I think, I think now more than ever, Teams should be investing in their, their finance function, right? having a, a finance platform as a core part of the technology stack, right? You wanna, you wanna protect the, the company, the assets that you’re building and to kind of ignore, Finance at this stage.

[00:09:11] I just, I just don’t think anyone can, can make that risk at this point. So these talked a lot about like the strategic finance as their Nirvana end state, but I think like, let’s use a real example of, of what it means in practice, right? So we have a finance team. of about two folks. George. George leads the squad and Ann helps support

[00:09:31] on the accounting side, we’re about a hundred employees, which is right around the average. There’s gonna be two, one, or to two finance folks per every hundred employees at a company. So, like right off the bat, we’re outnumbered. The work continues to grow every single month as more transactions happen as we, we grow more customers, as we add more people, right?

[00:09:51] That work doesn’t. Ever shrink it only, it only in fact stays at the baseline or goes up. and we’re here, we’re in q3, right? Q3 just kicked off. We’re on a calendar quarter. a lot of teams right now would be focusing on tying the bow around Q2 and figuring out like, where did the dust settle? Where did we land?

[00:10:09] When you have a strategic finance function, like B said, 365 days a year, you know exactly where you’re at. You know exactly where you’re pacing towards the goal, and the team doesn’t have to go under the hood and spend 15 days to figure out what the hell just happened, right? Sure, there’s some accounting entries that need to be made and some accruals and some schedules, but most of that stuff is, is not mission critical to to running business.

[00:10:35] So when you know exactly where you are from a growth perspective, where your pipeline is, where your ARR is gonna be, how much cash is coming in, how much cash is going out, we’re already looking at q3, right? Like we in fact have George assessing what the ROI on some really big marketing spend items for Q3 are gonna be.

[00:10:55] And to me, that’s really strategic finance, right? When the finance team is now deployed with the go to market team to say, Hey, you guys have the green light. To do this, or if you want the green light, here’s, here’s what actually has to happen. Or here’s, here’s what the goal should look like for a project like that.

[00:11:12] So, I think again, now more than ever, finance should be in the spotlight. personally, I always think that someone in finance should be at the spotlight of, of a company if they wanna be successful. but I think really what’s kind of changed is. Maybe in the past it was yearly or quarterly forecasting was enough, but now it’s, it’s gotta be constant.

[00:11:31] It’s gotta be end of the month. A quick reforecast. People have gotta know the plan. People have gotta know how much budget they have and figure out if it, it’s returning the ROI that they expected.

[00:11:43] Joe Michalowski: I think that I, it’s a good segue into what I, I wanna focus on, which is really like focusing these quarterly chats about the state of strategic finance on sort of particular trends and sort of digging into them. And, and the two that I wanted to cover today were, planning, like you mentioned, were, you know, as we’re recording this July 6th, right?

[00:12:01] In the q3, like Joe said, and planning season is. Upon us or about to be upon us, depending on where, where you’re sitting as a finance team. And the second one is AI because, you know, AI is everything right now and we will get to that. But I wanna start with planning, because Joe just mentioned it.

[00:12:18] And, and Bij, I’ll ask you, I kind of wanna clear the floor for the two of you a little bit just to talk about the, the concept of planning for 2024. Joe mentioned that it’s just an ongoing process, but planning season still exists. So how are you thinking about planning season? As it usually is for annual planning for 2024.

[00:12:37] What’s mosaic’s 

[00:12:38] Bijan Moallemi: Joe, I, I do feel like things have shifted. I remember back to kind of. The, the early days, even prior to Palantir, one of my gigs after Palantir was the cfo and things were more structured where it was like, okay, probably early q4. We’re gonna start thinking about the next year and we’re gonna go get a budget approved by the board, and that’ll be our operating plan.

[00:12:58] And depending on the sophistication or size of the org, you might not change that forecast again until q3. maybe at most you’d be doing it quarterly and. I think really to, to put a twist on the, the definition of strategic finance, what we’re talking about here as it relates to planning is being able to plan at the speed of business.

[00:13:18] And to Joe’s point earlier, no one wants to read yesterday’s newspaper. That was really the pain that we ran into in the early days of Palantir, where it would take us a day, a week, a couple weeks to get back to the business, but the business had already moved on to the next thing. And so I think finally now with tools like a mosaic out there, Finance professionals can actually meet the business at the pace that the business needs to be moving at.

[00:13:41] I think the big shift on the planning side has been really to be strategic in this day and age, you have to be continuously planning. for us, I feel pretty confident to Joe’s point already in our H2 forecast, I feel like we’ve got pretty good strong visibility into how we’re thinking about 2024 and 2025.

[00:14:01] And of course things will change, but. That is something that we’re looking at. We’re looking at kind of the, the change in the business, every few days as it relates to how things are going. And, in a tool like a mosaic, it makes it quite easy to be able to roll forward your forecast, plan different scenarios, and really make some of these micro-decisions around the business that typically you couldn’t, if you were only forecasting once a quarter or once a year.

[00:14:29] Joe Michalowski: Yeah, I think it makes a lot of sense. Joe, I’ll, I’ll let you kind of, uh, Speak to your perspective as well. Would love to hear your thoughts on how planning season is evolving from your past experiences and how Mosaic is kind of think about here.

[00:14:42] Joe Garafalo: Yeah, I think to, to just keep talking about the strategic finance part of, of planning. Right. You, you need a platform or a tool, right? If you, if you don’t kind of have anything that’s making you more strategic, then you’re still gonna be buttoned, buttoned down, bogged down by a lot of the manual work, the manual process, related to planning.

[00:15:03] And a lot of that work is like getting the data ready for the model or getting the data ready for analysis to then feed into the forecast. So I think a lot of what we’re, we’re trying to do is make that process a lot easier. For finance teams and for businesses, and when the, the insights are kind of automatic and you’re seeing them every day, it makes a lot of sense to then use those insights to build a forecast on.

[00:15:30] So for us, the correlation is just getting really, really easy. Right. We understand. How we can generate pipeline. We understand our win rates because we’re looking at them every single day. it’s not just the finance team that’s looking at them either. It’s, it’s the sales teams, it’s the marketing teams.

[00:15:45] Everybody is in the platform. So like the model makes sense to everyone and we talk about it with engineering, we talk about it with. we talk about it with customer success, right? It’s like when we’re not winning deals, we know exactly why we’re not winning them, and that trickles down to the features that the product team needs to build.

[00:16:01] So again, like the, the planning process for us has gotten way more strategic because it’s. It’s become company-wide and it’s company-wide because everybody understands the inputs that that drive the model versus the finance team doing something that is, is disconnected from the business or the finance team and the CEO know the model, but the operators of the business aren’t actually in tune with it.

[00:16:23] Bijan Moallemi: Joe, you make a really good point there. Um, I think probably my definition when I think about strategic finance, I always kind of say that you have to be able to. Basically push information back out to the business. But you have to do it in a way that they can, they can understand. And I think the reality is, as finance practitioners, we would love everyone to understand how a balance sheet balance is and what a state flow statement of cash flow is.

[00:16:49] But that’s just not practical. And so, it doesn’t, I remember some of those, a again, kind of battle scars at Palantir where. We would do all this work and then present it to someone who couldn’t understand what we were talking about. And at first we were kind of frustrated thinking, dang, like we did all this work.

[00:17:07] We built this amazing model, amazing analysis. How come they’re not understanding it? And I think the big lesson for us is to truly be strategic, you have to bridge that final gap. And that is actually meet folks at a level and an altitude that they can understand. And it’s breaking down kind of the finance jargon in some of these historically complex topics in.

[00:17:27] Kind of the, the ways that different folks across the organization think about the business functionally. And when you do that, then you can actually drive, strategic decision making. if we know our win rates are low, what are the activities that we can start to do to try to drive up our win rates?

[00:17:44] but if you’re just looking at a p&l or balance sheet, it’s tough to kind of bridge that gap.

[00:17:50] Joe Michalowski: One thing that I wanna follow up with you guys on is, so, for context we have this guide on the website. also forgot I mentioned this all the time, but I’m in marketing so it’s nice, for me to get this perspective from Bij and Joe. And, I’m fortunate to work with a company that. Has this approach.

[00:18:04] So I, I get the benefit of the two of you and everyone else that works here trying to translate things for our department. But we wrote this ebook. It’s a big guide and there’s a, a huge page on it. It’s, we did it for planning season two years ago. We updated it last year. We’re gonna do it again.

[00:18:18] But there, there’s a big page in there that I. I created as like a timeline for annual planning. And so there’s like a blueprint where like it’s like, okay, week one you’re working on this. And week two, do you guys think that the annual planning sort of timeline is out the window? We’ve mentioned continuous planning, like what’s the role of that traditional kind of planning season time period if we’re talking about doing it all the time.

[00:18:41] And Bij, I’ll keep it with you since, you mentioned a little bit of this, but, would love you guys to talk about it.

[00:18:46] Bijan Moallemi: Yes and no. I would say. At minimum, you have to be doing, probably quarterly planning and going through kind of that week by week flow, to make sure that you’re sticking towards those deliverables is still valid. There’s no question about it. and even now, we’ve got a board meeting next week and so there’s like a very specific set of things that we’re doing to prepare for that meeting.

[00:19:07] but I think. Really what’s changed again is with everything that’s going on, and especially for a VC back company like we are, and many of our, our listeners are, money isn’t falling from the trees like it was a couple years ago. And so the difference now is when I think about the finance function, I, if you imagine you’re a car on the road, finance is really kind of the, the sensor.

[00:19:31] So it’s gonna tell you, Hey, here’s your. Here’s how much gas you have left in the tank. Here’s the headlights to allow you to see around the corners. And if you’re only planning once a quarter, What that means is you’re driving down these windy roads and the headlights are off and you don’t know how much gas is left in the gas tank.

[00:19:47] Whereas with continuous planning, you’ve got those great headlights that are always on, that maybe even move as you’re going around the corner so you can really see what’s going on. and it might even tell you, Hey, The nearest gas station or EV station is two miles away and take you right there. And so that is the difference I think in, in terms of what has happened to the role of the finance function over the last couple years.

[00:20:12] Joe Garafalo: You can tell Beach has a Tesla, Joe.

[00:20:15] Joe Michalowski: It just, it’s the first time I’ve ever heard anyone mention the EV station in the same breath as the gas station, but also I visited you guys and gas is really expensive there, so I don’t blame any of you for, for getting out of

[00:20:27] Bijan Moallemi: Yeah, it’s a little crazy out here.

[00:20:28] Joe Michalowski: it is, uh, Joe, I’ll ask you the same question. Like what do you think?

[00:20:32] The role of that, like, I mean, you helped me put together that annual planning timeline when we made the ebook. Like, does that exist anymore? Does it still matter? Like where, where are we at with that?

[00:20:44] Joe Garafalo: Yeah, I think it, I think it definitely still matters, right? And I think we’re. We’re talking about two very distinct things, and the annual plan is a, is a beast, right? And the reason it’s a beast is because every year most things reset and start from zero. Like your big spend, your your large purchases, your prepaid insurance, your prepaid rent, like whatever it may be, that resets.

[00:21:05] So at the annual plan, you have to make sure that you understand like, Here’s the 12 month period of things of, of things that may or may not happen. And that’s just, that’s a lot of work, right? You’re forecasting 12 months out. What we’re talking about is constantly updating the forecast. So, you know, we’re in July now, there’s, you know, six months left of, of the year.

[00:21:27] It’s easier to, to forecast six months than it is 12. It’s just obvious, right? a lot of the things that. Needed to happen have probably happened. Maybe the assumptions that you had at the annual plan are true or not true. Maybe you’re performing or outperforming some of those, those benchmarks that you set.

[00:21:45] So now you’re just kind of flowing through your actuals and constantly re-forecasting the near future versus like this, Hey, I need to look a year out, and no one really has a crystal ball. So following those steps for the annual plan, I think are still absolutely important. But then just getting into the rigor of.

[00:22:02] Of doing it more often is, is definitely a good habit and it gets a lot easier as the year progresses.

[00:22:09] Joe Michalowski: It’s good news for me because as somebody that needs to update that ebook, I now don’t have to scrap a page and rewrite the whole thing. But that’s great. but also I think really helpful context. Cause we’ve talked about it too as we, as like a marketing team just plan out content for finance folks.

[00:22:24] It’s like, well, how do we balance that conversation? So I appreciate the, the insight into sort of the two sides of that conversation where it’s like the continuous planning and. That big annual planning, workflow. And so I, I, I want to get to the AI stuff. So I, I mentioned we had two, two things to talk to is, is there anything that you guys wanna touch on in the planning trends front before we move on to what, people might think is the more exciting side of the conversation?

[00:22:53] Bijan Moallemi: I mean, I’ll, I’ll finish with one final point here, right. I think Joe mentioned this earlier, and we see this with a lot of the, the customers, on our side as well, is strategic finance. In this day and age, it isn’t a nice to have, it’s actually a need to have in this environment, and the reality is, Money’s tighter, so you might not be getting the 1, 2, 3 extra heads on your team that you thought you were gonna get.

[00:23:16] But the work still has to get done, right? You still need to understand the financial health of your business. You’re still gonna put together board decks. You still need a financial model. and so I think what you’re gonna see here, and you’re probably already starting to see this, is that companies who have this strategic finance muscle can actually start to flex it.

[00:23:34] And the ones that are better informed around the financial health of their business that can use it to propel their business forward, those are the ones that really are gonna start to separate from their peers.

[00:23:44] Joe Michalowski: Love it. I think it’s a great way to wrap up sort of that first trend. But as promised, I wanna move us into to our next one. And this one, I, I don’t know where you guys are gonna take it cuz it, it, at this moment, it could mean really anything. But I, I wanna talk about AI and finance where, you know, starting to put out a lot of AI content.

[00:24:01] AI has taken over the world. I mean, for a while, but also especially in the last like two months where just the open ai stuff just exploded all of a sudden. So I kind of like, once again, wanna clear the floor for the two of you to discuss. Um, kind of the mosaic thesis on ai. Like, uh, what are, what are we thinking, what’s our vision?

[00:24:22] And we’ll kind of do some follow up questions to, to get through, some finer points on it.

The Potential for AI in Finance

[00:24:28] Bijan Moallemi: Yeah. Yeah. So let me start kind of broadly and then Joe, feel free to chime in as well. I think, Look, AI is here and it’s real. I’ve spent a lot of time playing around with open AI and chat G P T I know Joe has as well, and I’m sure many of our, our listeners have as well. and I think it’s been one of those buzzwords, especially in kind of the finance space for the last 10 or 15 years, where people might throw something on their website, talk about AI ml, but then.

[00:24:54] You use the product and you’re pretty disappointed, and it’s actually not solving a really valuable use case. so I think, my personal take is, Ai, especially as it relates to the finance function. it’s gonna help give us other CFOs leverage, empower you to be more productive at your job. I don’t think per se, that the CFO is going away.

[00:25:16] So I don’t think AI is coming here to take our jobs or anything like that. but again, I think similar to strategic finance. Those who are able to leverage AI most effectively will find that they are more productive at their jobs and move up the ranks faster and just make a bigger impact on, on their businesses.

[00:25:34] I think as it relates to kind of the finance workflows in Mosaic in particular, there is a lot of really interesting things, right? If you think about kind of the aspects we talked about, strategic finance being an end state. That means you’re pulling data from disparate systems, you’re cleaning it, you’re mapping it, you’re joining it, you’re augmenting it, you’re enriching it, ultimately using it for an analysis to forecast.

[00:25:56] I think every part of that chain can be aided by a AI in some way, shape, or form. the big thing here is just what are those 10 x use cases, the ones that really move the needle, and what are maybe more of the shiny objects or. things that look cool, maybe help you sell a couple d more deals, but don’t actually move the needle for the day-to-day of the persona using a tool like a mosaic.

[00:26:21] Joe Michalowski: I love the, the high level, overview of kind of, where we think, AI might play a role. I, I appreciate the AI isn’t taking over c f O jobs, perspective. I think it’s an important one to get out there. but you mentioned use cases and things like that. So Joe, I’ll kick it to you and see like what are your thoughts on, maybe some more specific AI use cases, for finance folk.

[00:26:41] Joe Garafalo 1: Yeah. I think, keeping on the, the theme of, of staying strategic, right? There’s, there are a lot of jobs in finance that, that are, are kind of low value work that just needs to get done. That I think, AI is actually gonna be really, really good at. I think there’s, there’s some really granular examples I can, I can talk through, but anyone in finance has probably seen this many times.

[00:27:03] whether it’s credit card transactions or vendor bills, you just. You get like a different name every time Google sends you an invoice. And then in your e r p, you’re, you’re left with like 36 vendors that are all like google.co.com or like Google with a missing E. And that just is a pain for finance people cuz you gotta go back and manipulate the data.

[00:27:25] So AI I think is gonna do, I think a lot of wonders for things like data integrity and data cleaning. I’m sure in finance all of us have seen, have seen those deals where the close date is before. The end date of the contract or you know, like the dates are outta whack. And, again, I think flagging outliers and things in the data that you should probably pay attention to.

[00:27:47] Proactively versus like you sit down to do your month end reporting, you spend all this time manipulating the data only to realize there’s some obvious errors that you then need to go clean up and fix. So I think that’s, I think that’s one area for sure. And, I’m an accountant by trade. I, I try not to share that, with a lot of people, but I think there’s a really big application for.

[00:28:06] AI in, in the accounting space. I think, if you think about like the month end close process, there’s, there’s kind of these set of entries that need to happen continuously. so again, I think AI is gonna help pretty tremendously from that front. And if you think about gap, right? Gap is a defined set of rules for how to treat certain things.

[00:28:27] And AI is actually really good at telling you exactly how a specific transaction should. Be applied to a specific set of rules. So if you think about like revenue recognition, I think there’s probably gonna be some cool applications there. but there’s also some really complex like accounting transactions, that usually require a ton of specialty and, and people, to just figure out how to make the right call.

[00:28:50] And I think you’ll see AI really start to aid in, in kind of the decision making there. And, should be pretty airtight.

[00:28:57] Bijan Moallemi 1: Yeah, Joe, I, I like where you’re going with that. And I, I think that that is kind of the big thing theme that I’m seeing as well, is things that maybe historically required specific domain expertise or required a ton of training. Now, theoretically could be a lot easier. so I think it’s gonna be really interesting to see how things, unfold here.

[00:29:17] Obviously we’re at kind of peak ai hype here at the moment, but I think over the next, next couple quarters, as things die down, we’ll start to see what are, what are the more real use cases, and again, what is more, more buzzy and maybe not as practical as we thought.

[00:29:32] Joe Michalowski 1: I think that’s, I mean it’s why I wanna do this, conversation kind of regularly, cuz I think it’ll be important to sort of check in and see where we’re at like each quarter and, and AI will be a good one to track because one thing I wanted to follow up and Bij Bij, I’ll keep it with you, for now, but I, I want to.

[00:29:48] I want to dig in a little bit to areas we think AI won’t change processes and workflows. So Joe kind of set us up and said like, Hey, there’s these really structured processes that could probably be airtight with ai. As somebody who’s done this job for a long time and now like as a ceo, like what’s your perspective on things that AI just might not be able to replicate?

[00:30:07] at least not in the short term.

[00:30:09] Bijan Moallemi 1: Yeah. Yeah. So a, again, I think the, the human behind the work will always be there. So first and foremost, I know like a lot of the fear around AI is like, okay, are, are jobs going to be killed? And I don’t think that’s actually the case. I think it’s probably the opposite, which is because people can be more productive.

[00:30:28] Output can, can increase, and there will be more opportunities for jobs if you can leverage these skill sets appropriately. I think one of ’em that, that we’ve been toying with a little bit is a lot of strategic finances, storytelling, right? And I think, there, there’s a difference between sticking to the facts and that’s very valuable, right?

[00:30:47] Let’s say for example, I overspent in a given area. I should be able to tell you, Joe, This is the vendor that we overspent on. Like that is very factual and that’s probably something that AI can help with. but anything beyond that, you’re starting to kind of tell a story. and I would want human control over the message that as the CFO I’m positioning to the rest of the organization.

[00:31:10] So, I think when it comes to the storytelling aspect, Building AI to stick to the facts. maybe helping you with the story, but, personally I would still want control over what is being messaged around specific themes around the business versus just having AI on autopilot, potentially telling me things or telling other folks across the business things that that may not be true.

[00:31:35] Joe Michalowski 1: Love that. we have a really great article on financial storytelling that I, Bij, I think you. Or the one that helped me, get all the input for. And so I love that we got there. Cause I, I feel the same way. It’s just not even just in finance, but even for the work that I do, it’s just the, the narrative that you put behind the numbers, it matters so much more than just handing over the numbers.

[00:31:53] And it goes back to what you said earlier, the, the sort of customer, I don’t know if you mentioned this term, but you’ve used it before, the customer service mindset and being able to translate that data, matters a lot. So

[00:32:03] Bijan Moallemi 1: Totally, totally. And, and in finance, right? I think you tell the wrong story. You make a mistake with a number, you can very quickly lose credibility. So, again, I think leveraging AI maybe to help, but having that final control, being able to click yes on something before it gets sent out is, is gonna be important.

[00:32:22] Joe Michalowski 1: Yep. I have one, one AI follow up question and then we’ll, we’ll kind of get wrapping up cause I know we’re, we’re coming down toward time, but it’s a little, it’s a little bit more abstract and I wanna know how you two are using. AI day to day right now, like it’s fun to talk about, like finance specifically, and you know, how Mosaic is gonna implement it, but there’s a lot of AI tools and like even for finance people, whenever they use AI in Mosaic, as it comes out and like, as we keep iterating on it, like they’re still gonna use other tools.

[00:32:48] So I’m curious, like just j I’ll start with you since we just finished with Bij, but what are, what are you using, what are the tools you like right now? Anything interesting that you would share people?

[00:32:58] Joe Garafalo 1: Yeah, I think, the only one that I’ve, I’ve dabbled with, and I used it quite frequently is, is chatGPT. And I think there’s just so many use cases for it. So, outside of, the finance aspect, also work heavily in, in sales and marketing. And in marketing. We have a lot of brainstorm sessions and open AI and chatGPT.

[00:33:17] Is actually really, really fun to just throw in some ideas and some loose concepts and see what it comes back with. And it’s. It could make just so many connections if you give it just three loose concepts and like tell them to tie it together. And now you’re just getting this like rapid fire of idea flow to a conversation.

[00:33:37] and it’s just a good way to spark a lot of creativity. And, it comes up with some pretty awesome things. And I don’t think anything has been airdrop quality. I think it always requires like refinement or like, you know, rephrasing certain elements of it, but that, that’s one area that’s been awesome.

[00:33:54] in terms of like personal assistant, it can help you write emails just a lot more efficiently. And if you’re on the sales front, you know how important writing emails is and how much time that it takes. And, just using it to, to kind of refine the craft and make it faster has been awesome personally.

[00:34:11] I hate grocery shopping, but asking it to create a list for the meals that I like, and you could just give it themes and say you like Greek, Italian, and Indian food, and then it’s gonna create a whole shopping list for you. From, uh, outside of that, I think you can, you can tell it to make a workout for you, which, which has been awesome.

[00:34:28] It’s almost like I have a personal trainer. you could also keep telling it like how you’re progressing against the workout, so it’ll keep updating it. so there’s just a ton of really, really cool use cases and, still scratching the surface on my side, but do use it quite frequently.

[00:34:43] Joe Michalowski 1: Yeah. Bij, same question for you. Curious. I, I’m a dinosaur, so any, any for me is helpful cause I

[00:34:48] Bijan Moallemi 1: Yeah. Yeah. So, so I think for me, also it’s just been fun to kind of tinker around, right? I think with a trend like ai, you can either be ahead of the trend and kind of part of the pack, or you can be behind the curve and. This is definitely one that I think me personally and us at Mosaic just don’t wanna be behind.

[00:35:06] So, one work example that we’re really excited about is, on the go-to market side. a big part of our job is let’s go target companies that could be great fits for Mosaic and find ways to get in front of them. And so, we’ve been leveraging open AI to actually take really big lists that would be taking typically probably hundreds of hours to manually scrub through and actually kind of clean them up, sort them, enrich them, such that our, go-to market teams can be more effective at targeting the companies that are, that are the best fits for Mosaic.

[00:35:38] So that’s been kinda one. Really cool, use case here on the business side on the personal sides. got a couple recent examples actually that I’ll share. the most recent one was only a couple days ago here over the July 4th holiday. I actually used it to try to figure out how to grill the perfect tri-tip.

[00:35:56] so really neat to see that. It kind of pulled from a few different websites, found the highly, rated ones, and, pretty happy with how the, the tri-tip turned out there. So, got, got, good remarks there from, from the family members. and then another one is, about two, three weeks ago I had, an inadvertent ding on my credit score where, I got a late payment for something that wasn’t actually a late payment.

[00:36:18] So plugged in, Hey, how do I get this off of my credit score? and here we are two weeks later and actually all three credit bureaus took it off of my report, which I’m pretty happy about. So, that those are two, two recent examples of how it’s helped.

[00:36:32] Joe Michalowski 1: So practical. I love this. the only one I have to add is, I don’t know if you guys deal with it at all, but I, I try not to. It’s a regular expression. It’s like the. I guess code, I guess. But I have to use it to parse out like URL structures in Google Analytics. So it’ll track, like if I wanna look at a certain set of pages, it’s a mess.

[00:36:49] It’s like asterisk period slash asterisk paren and like, I don’t know how to write this. So ChatGPT will just be like, what are the URLs? And it’ll do it for me. It’s the only time I’ve ever been able to use regex. So, if anyone needs to deal with that, it’s a that use case as

[00:37:03] Bijan Moallemi 1: And, and Joe, I, I think kind of circling back here as we wrap up to strategic finance, it’s use cases like this that I think are really going to drive the most value, right? If it’s gonna take Joe as a CFO five hours a month to be cleaning up vendor names or. He can throw it into a system and he can do it in one minute and get five hours back.

[00:37:24] I think that’s where you’re gonna start to see kind of the, the biggest use cases for ai and really folks that are able to leverage the technology, just start to really shine and, progress faster than their beers.

[00:37:36] Joe Michalowski 1: I love that. It’s a good way to wrap up. I think, anyone who’s listening knows that I usually ask one question and I wanna be, I’m coming up on the end of my time here, so I want to give you guys, each probably like the 32nd answer on this, cuz I would be remiss if I got to episode 42 of this podcast and I didn’t ask it one time.

[00:37:52] but for both of you, it is just, what is one thing you know now that you wish you knew when you were starting in finance? And I’ll give you like, gimme the lightning round answer. And Joe, I’ll, I’ll start with you. Since Bij just wraped up.

Key Takeaways and Career Lessons

[00:38:04] Joe Garafalo: Oh man, um, this is, this is taking me back to my Palantir days as well.

[00:38:08] So there was a guy, uh, he was on the legal ninja team. His name was Sean Strenstrom, a great guy. Um, the, one of the best pieces of advice that I ever got as somebody working in finance, um, like Bij was my boss at Palantir and I was very focused on making sure Bij was happy with the work that was doing and Colin was happy with the work that I was doing.

[00:38:28] Uh, but Sean and the legal team was like, hey, man, you know that like I’m your customer, right? Like you should, you should be worried about making me happy more than making Bij happy and Colin happy. And that just really put things in perspective too, right? Like the work that you do in finance, it’s, it’s important for your internal finance team, but it’s more important to the rest of the business.

[00:38:47] And I don’t. I don’t think that most finance people get kind of that eye opening feedback from, from somebody on the legal team who’s willing to take them under their wing and show them the ropes. 

[00:38:59] Bijan Moallemi 1: Yeah, you, you actually stole mine. But to tack onto that really quickly, I think that’s absolutely right. we as finance professionals, as much as we might love building models or pulling together an analysis, we don’t do it for ourselves. Ultimately, we do it to empower the business. and I think there’s times definitely early in my career where I felt the same, where.

[00:39:19] Hey, I’m doing all this really amazing work and I’m just cranking behind my Thunderbolt monitor. But, in reality, being connected to the business, having that customer service mindset and understanding what your customer needs the most, definitely made the biggest impact in in my career. And, Joe, congrats on 42 episodes.

[00:39:36] That is, uh, a ton of consistency and that’s a, that’s a really big number. So that’s, that’s huge.

[00:39:42] Joe Michalowski 1: We’re moving, man. And this is, I mean, for everybody. I appreciate that. For everybody listening, this is the sort of kicking off what is gonna be. A lot of AI talk. I want to dig really deep into this. we have a couple speakers lined up to continue talking about it. There’s a lot of work we’re gonna do cuz it’s important to, to what Mosaic is doing.

[00:40:00] It’s important to what our content team is doing. So, appreciate that. I will be, Continuing on. It’s what we do, we roll forward as the name would suggest. this is fun, guys. There we go. this is fun guys. I appreciate you taking the time. I know, super busy all the time, but I think this is, important, an important conversation.

[00:40:19] It’s good to talk about planning AI stuff, for either of you. this is normally when I would turn the, the sort of. Mike over be like, what do you guys wanna promote? We’re all promoting the same thing. check out Mosaic. So maybe nothing on that front, but, is there any like, sort of closing thoughts you guys want to give before I, I wrap up here? It’s okay if there aren’t.

[00:40:41] Bijan Moallemi 1: I think on my side, um, Looking forward to the regular series here, especially on some of these big themes that we talked about, planning ai. I think when we catch up here in a few months, it’ll be interesting to see how, how have things unfolded, what’s different, what’s new? So looking forward to, to catching up again shortly.

[00:41:00] Joe Michalowski 1: Love it. 

[00:41:01] Detached audio: excited for lot of the advancements that are that coming to the product, especially on the AI front I 

[00:41:07] Joe Michalowski 1: Love it. can’t wait for everyone to see him. Bij, joe, thank you again for being on the roll forward. Uh, it was the first time that I officially, officially got to interview you both for show. excited to keep doing it. So thank you guys so much, and, talk to everyone next time.

[00:41:18] Bijan Moallemi 1: All right. Bye.