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Music.
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Welcome to the CFO Corner. I'm your host, Nick Ezzo. In the CFO Corner, we sit down with CFOs
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and corporate finance professionals and the people who support them to hear about the
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innovative approaches and technology they use to scale and grow their organizations.
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They share the challenges they're facing with mundane, repetitive tasks, and they give their
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take on what they'd like to see in corporate finance that can help CFOs achieve a stress-free
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working life. With me today is Sam Gupta of ElevateIQ. Sam has been an ERP thought leader
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in the digital transformation space for nearly two decades with a primary focus on financial
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systems and ERP. Sam is rated as the number one thought leader in the ERP category and number 15
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in digital transformation on Thinkers360. Sam also hosts a podcast called WBS Rocks, focused
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on business growth through digital transformation and ERP, where he interviews top influencers and
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and executives focused on digital transformation.
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Welcome, Sam.
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Thank you so much for having me, Nick. Really excited to be on your show.
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Well, let's get started. Can you tell me a little bit about your role at LFHIQ?
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What you do?
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Yeah, happy to. So LFHIQ, the way we like to define ourselves as we are the independent ERP e-commerce supply chain
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and digital transformation consulting firm.
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So basically what we do is we prepare our customers and the businesses when they undertake
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any sort of digital strategies.
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So that's going to be the planning, the change management, the technology selection, all the way to making sure
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that they are going to be successful with their implementation.
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So a lot of things, I guess.
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So given the fact that you work with a lot of CFOs, a lot of finance departments,
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how has the role of the CFO changed in the last five or 10 years?
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And where do you see it going in the next five years?
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Yeah. And we are seeing a lot of changes overall. If you look at the kind of demand that the CFO
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role has at this point of time, obviously, I don't know where the pressure is coming from,
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as you know, whether you talk about the macroeconomic factors or anything else,
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but overall, everybody's sort of under stress, right? And CFOs, they have to find a lot of
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different ways to find opportunities, find money somehow, you know, to meet their numbers.
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So obviously, if you look at five years back, they were not doing as much planning overall.
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Now they have to do continuous planning. They have to track the cash. They have to make sure
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that the supply chain challenges that they are having on a daily basis, that's not going to
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give them any sort of surprises. So yeah, so a lot of demand overall. And obviously technology
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plays a very important role in making sure that they are going to be successful.
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Let's double click on that a little bit because you're a finance technologist, if I could use that phrase. Yeah.
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How do you see technology, disruptive technology? What have been some of the more disruptive technology trends you've seen?
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And how do you think about technology in support of the finance function?
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So honestly speaking, the way we see the technology and what we see with our customers,
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it's always going to be depending upon their skill level, where they are in terms of their maturity.
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Some companies, the companies that have implemented four or five, six different ERP systems,
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they are going to be at the PhD level in terms of the kind of planning that they can do, the
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kind of things that they can do, whether they can get the business results from the ERP or not.
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And then you have companies that are going to be on their first, second ERP system. And by the way,
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we have to first clarify what is an ERP system, because if you ask five people, they all are going
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going to have their own definition.
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Exactly. This is what is an ERP.
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So it could get really interesting. Overall, we see this kind of maturity overall
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from the ERP adoption perspective.
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And when you see things such as disruptive technologies, and that's what you wanted me to answer.
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So it's all over the place. Sometimes you are going to see very disruptive technologies,
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let's say in the QuickBooks and Xero space, but not so much in some of the ERP space.
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But then you are going to see in the enterprise space.
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So I would say it's all over the place in general, but I don't think companies really
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understand how to take advantage of technology, how to sort of create the business plan, the
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way they would create, let's say, for a facility or a site.
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They are going to be far more confident in that, but technology, people don't have as much confidence in.
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Yeah, and I think part of that is that they're afraid to ask, right?
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Technology is changing so fast.
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I mean, here we are, I'll date this broadcast by saying here we are in March of 2023,
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about four or five months ago, chat GPT or GPT-3 hit the newspapers and the airwaves that was
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everywhere. Now GPT-4, OpenAI, finance people are left saying, hey, I don't even know what to make
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of this. How is this going to affect my life? So what are your thoughts about some of the more
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recent trends around AI in finance? Yeah, so honestly speaking, AI is amazing. It's a very
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powerful technology. But with any technology implementation, you have to do the prep work.
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If you are not willing to do the prep work.
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Then you are not going to get results and you are probably going to get bad results faster.
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That's how technology is supposed to work.
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So, prep work, when I say as I like to use an example, if you go to a library,
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and in the library, you are going to see everything well labeled,
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everything well organized, if you are trying to get trying to automate that,
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that's where the technology is going to be helpful.
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Now let's take an example of a poorly governed library from the physical process perspective.
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If you are going to automate that, it's only going to make things worse,
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meaning you are going to be investing a lot more effort in debugging, in reconciling.
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So your accounting effort is going to be far more even with the shiniest toy.
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So the most important thing and the biggest misunderstanding that we have with the technology
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always is going to be, okay, how much prep work do you need to do and how ready you need to be
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overall from the technology perspective. Most of the business people, they don't really,
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get into the in-depth to be able to understand what level of data do you need? What level of
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processes do you need? Just because it gets very, very, very technical, very deep in terms of the
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data modeling until you have that right. You are not going to get the business stuff. But if you
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get your foundation right, you can do wonders, wonders with technology.
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Yeah, I couldn't agree more. First of all, I love that. I think I don't know how you said it,
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but something about technology will help you achieve bad outcomes faster. Exactly.
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But the other one is I love the analogy of the foundation, because data is the foundation on
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which you build your whole organization. And if you have a shaky foundation, then your organization
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is not going to be solid. So it's going to crumble. Let's talk about the last mile of automation,
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which is really human beings. And you and I spoke a little bit earlier about change management.
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Sometimes people are resistant to change. And let's talk about adoption. What are some of
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the barriers to the adoption of this modern technology? What are you seeing out there in
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terms of barriers? Yeah. So the biggest barrier that we typically see is number one, I think,
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when we push any sort of change to people, we don't really tell them why we are pushing that
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changed. Typically, companies are going to invest, let's say millions and millions of dollars
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in technology. I was talking to one other person, he does the SaaS spend category. They have created
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tool for that. And we were talking about, you know, companies have on an average,
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thousands and thousands of SaaS apps, and sometimes it could be roughly 1500 SaaS apps.
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And this has become the second highest spend category inside the indirect spend. Can you
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believe this? Okay, more than probably labor and marketing. And that's how much companies are
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spending in software. But if you look at the business value, whether they are getting business
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value from technology, probably they are not. And the reason for that is because they underestimate
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the amount of effort that they need to invest in the change management training.
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So when you are doing any sort of technology initiative, what you need to do is, number one,
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you need to involve your user, you need to develop a language. Most of the time, when you are pushing
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any sort of technology, these processes are not even documented, even data is not documented.
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You know, you have a lot of noise inside the organization, everybody's gonna feel we are
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buying this magic wand, and that is going to improve our life. Okay, that's not how magic
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ones work. Sorry, they only work that way in dreams, not in reality. So what you need to do
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is number one, you need to develop a language and the best way to develop a language is going to be.
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To translate something that they already know. If you are going to put new information,
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they have zero interest. They already have so much headache in their life, in their personal life,
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they are not going to pay any attention. So what you need to do is something they are really
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passionate about something they are living it, they really know and they are really going to be good
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at talking. They are going to talk a lot. Okay, once they do that, and once you translate that
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in a language that both of you can understand and relate, then you sort of develop your to be model.
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Okay, then they can connect the dots that okay, I can see this, I know this, okay, I was not able
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to translate that because if you ask them to document, they'll not be able to document because
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they know so much. It's going to be implied knowledge in their heads that they are not
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able to write it down on a piece of paper. But once you develop that language, then they will
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be able to do it. They'll be able to do the 2B and you take that as a framework throughout the process.
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And once your change is done, put by their, you know, best that, okay, now you need to use this.
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You already understood this language. So this is not something new for you. So you are removing
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the element of surprise from the whole process. That's how change management is supposed to work.
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So I don't know. I mean, see, disruptive technology is great, but if you are going
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to make the experience disruptive, the only thing you are going to get as a result
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is the disruption, not the business results.
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Yeah, yeah. As you were talking, I was thinking like, a lot of times in my experience,
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people like to keep stuff up in their head because that's job security.
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If I put this out on paper, well, now I've got this document.
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Other people can read that language that you talked about, and then other people can do that job.
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It's job security for me to keep all this stuff up in my head,
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which leads me to my next question.
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Given we're talking about technology, robots take away accounting jobs.
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Well, that's a very interesting question.
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Now, depending upon and I always like to ask, okay, how do you define these things? Okay, where does accounting end? What is the role of
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accounting? If the role of accounting is simply to count and reconcile, you know.
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Counting might go away. In fact, the whole idea of ERP systems, if we talk about
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true ERP systems, the role of them was to automate the whole accounting piece.
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That's what ERP systems did.
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But then we created reconciliation nightmare. That nightmare actually increased the job.
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Once you install ERP system, then you need to get a lot more accountants
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because the way the data was supposed to be done,
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you are not getting that, you are going to get a lot more variances so you need a lot more accountants.
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It's a very interesting thought process in my mind.
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The role of accountants are not going to change. they are probably going to require far more skills in troubleshooting.
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Because if you increase the number of variables in any system,
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regardless of whether it is AI or simple machine, the more variables that you are going to have,
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the more skills you are going to require to debug and the role of human is not going away anymore.
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It's just that you have removed the mundane tasks. These guys are going to be far smarter,
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they can do far more powerful things.
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But again, humans are not going away anywhere.
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Machines are never going to be able to replace humans. There's no way.
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Yeah, I couldn't agree more. The challenge is now you're moving people up to a higher skill level,
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and sometimes people are not willing to do that.
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Sometimes they like routine, mundane work. As we're winding down this interview, Sam,
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I'm going to leave the last word with you. Any final thoughts you want to share with our audience before we sign off?
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Yeah, I would suggest, if anybody is listening to this show,
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that pay attention to the prep work.
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Okay, do not underestimate the prep work that is required to adopt any sort of technology.
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Okay, if you are spending millions of dollars just to buy the technology, make sure you are
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spending a million more in the training, in the implementation, in the change management,
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then you are going to get business results. So that's my advice to the listeners.
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Well, thanks, Sam. This has been a super exciting interview. I'm happy that you were able to join
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us. On behalf of the Auditoria team and the CFO Corner team, thanks, everyone,
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on and enjoy the rest of your day.
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Music.