Laying the Groundwork for Successful Digital Transformation -- Sam Gupta, Principal Consultant at ElevatIQ

GUEST BIO
Sam Gupta is a leading ERP thought leader with almost 20 years of experience in digital transformation, focusing on financial systems and ERP. As the #1 thought leader in the ERP category on Thinkers 360, Sam has contributed to large transformation projects for Fortune 500 companies and now works with SMEs as a Principal Consultant at ElevatIQ. He regularly shares his insights at industry events, blogs, publications, and hosts the WBSRocks podcast, where he chats with top influencers and executives about digital transformation and business growth.

KEY TAKEAWAYS
Sam points out that the biggest obstacle to adopting new technology is often resistance to change and a lack of understanding of what it takes for successful implementation. He stresses the importance of investing in groundwork like data modeling and process improvement to truly leverage technologies like AI. If the foundation is strong, technology can work wonders for a company.

He also notes that people sometimes hold on to information as a form of job security. While technology might automate some accounting tasks, the role of accountants will shift towards more troubleshooting skills. Sam believes humans won't be entirely replaced by machines, and advises companies to focus on the prep work needed for technology adoption, including training, implementation, and change management, in order to see real business results.

Transcript

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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.