Show Notes

Welcome to FP&A Tomorrow, where we discuss financial planning and analysis, examining its current state and future prospects, with your host Paul Barnhurst. 

In today’s episode, Paul engages in an insightful interaction with Tyler Cyphers, for a discussion on how generative AI is reshaping FP&A, the importance of business partnering, and optimizing cloud spend.

Tyler, the founder and CEO of OpsCipher, shares his journey from a Disney finance intern to leading FP&A at top cybersecurity firms. He is an expert in leveraging generative AI for strategic decision-making. Also a passionate advocate for effective business partnering and optimizing cloud spending.

Key takeaways from this week's episode include:

Here is a concise summary of the key points from the discussion:

• Generative AI simplifies data processing, enabling FP&A teams to focus more on strategic analysis and decision-making, ultimately enhancing their value to the organization.

• Success in FP&A hinges on understanding business challenges, effective communication, and building trust with stakeholders. Being curious and proactive is key to growth.

• Effective cloud spend management requires visibility, collaboration across teams, and financial stewardship from the early stages of product development to avoid unnecessary costs.

• Financial operations play a critical role in managing cloud costs. Establishing a dedicated FinOps team or center of excellence can provide significant benefits.

• How skills from varied roles like investment banking and consulting can enhance FP&A effectiveness. Exposure to various business aspects through FP&A provides a strong foundation for leadership roles.

• The discussion highlights the necessity of mastering copywriting to communicate effectively and set clear expectations with stakeholders. For FP&A professionals this skill helps in selling ideas and managing business relationships successfully.

  
  The title sponsor for this week’s episode of FP&A Tomorrow is Plan Buddies. Plan Buddies, where professionals meet excellence. Ready to elevate your career? Visit plan-buddies.com and become a member today. Here's a special treat. Use the promo code the FP&A Guy, that is TheFPandAGuy for an exclusive 25% discount on your first-year membership.

Quotes:

Here are a few relevant quotes from the episode 

• "The people who are the most successful have a genuine curiosity about the business. It's very hard to go into those teams and try to be that analytical value-add extension if you can't understand their challenges."

• “If you think about software business, generally, the two biggest expenses are people and then the cost of running the software.”

• “FinOps as an organizational structure. So from the first part, I think, it's inherent in the word financial operations. It's a financial stewardship-driven culture in the first place.”

Follow Tyler:

LinkedIn - https://www.linkedin.com/in/tylercyphers
Website - https://opscipher.com

Follow Paul:

Website - https://www.thefpandaguy.com 

LinkedIn - https://www.linkedin.com/in/thefpandaguy

For CPE credit please go to earmarkcpe.com, listen to the episode, download the app, and answer a few questions. For AFP FPAC certification answer the questions and contact Paul Barnhurst for further details.

In today's episode:

(1:20) - Introduction

(01:50) - Guest Introduction

(02:26) -  Defining Great FP&A

(05:01) - Impact of Generative AI on FP&A

(06:59) - Future of FP&A with AI

(13:25) - Becoming a Strategic Business Partner

(17:40) - Cash Flow for Coders Newsletter

(21:30) - Optimizing Cloud Spend

(30:12) - Advice for Managing Cloud Spend

(44:12) - Rapid-Fire Session

(46:40) - Essential Skills for FP&A Professionals

(47:40) - Guest’s personal insights.

(50:42) - Advice for FP&A Business Partners 

Full Show Transcript:  

Host: Paul Barnhurst:: This week's title sponsor is Plan Buddies. The number one planning community for planning professionals. Check it out at planbuddies.com and join me in the community today. Hello, everyone. Welcome to FP&A tomorrow, where we delve into the world of financial planning and analysis, examining its current state and future prospects. I'm your host, Paul Barnhurst, and I'll be guiding you through the evolving landscape of FP&A. Each week, we're joined by thought leaders, industry experts, and practitioners who share their insights and experiences, helping us navigate today's complexities and tomorrow's uncertainties. This week, I'm thrilled to work. Welcome to the show, Tyler Cyphers. Tyler, welcome to the show.

Guest: Tyler Cyphers:: Thanks, Paul. Glad to be here, man.

 

Host: Paul Barnhurst:: I'm excited to have you. So let me give a brief introduction from Tyler. Then we'll jump in. He comes to us from Franklin, Tennessee. He is the CEO and founder of OpsCipher. He has a BS in finance or business from the US, University of Central Florida and his MBA from Rollins College. So, Tyler, we always like to start with this question before we get into a little more about your background. In your opinion, from your experience, what is great FP&A? What does that look like to you?

 

Guest: Tyler Cyphers:: It's a great question. When I got into FP&A 10, 12 plus years ago, I think FP&A was largely considered a very back-of-the-house scene and to not be heard from strictly generate reports type of function. I think in the last, probably, 7 or 8 years, it's accelerated in the last several years. But I think FP&A has become more of a strategic decision-making center within an organization. So what you asked, what does good FP&A look like? I think it's one thing to take, from a reporting perspective, your financials, your cash flow forecast, and so forth. But the magic is then being able to provide that perspective and that visibility and that, I guess, decision-making, from a business standpoint, on what that means from a profitability standpoint, what that means for our growth, and so forth. So that more forward-looking aspect of guiding and driving the business. So that's how I see it today.

 

Host: Paul Barnhurst:: That makes a lot of sense. It's that guiding and driving. I agree with you. 10, or 15 years ago, very much a back office function. I still remember we reviewed that way and we wanted to go to this conference. It was a MicroStrategy conference because we're implementing MicroStrategy. I worked for a business travel organization. The company had enough people going that our tickets to the conference were free. I had to find a free search from an airline. Since were traveling, we had to stay in the La Quinta off the strip with free certs. Everybody else was at the Wynn for the conference. My boss did some of the meals, and most of the meals were covered. I think my total reimbursement was less than 100 bucks for the 4 or 5 days. Now, my boss spent a little bit too. But I bet for the three of us, they spent less than $1,000. I was like, all right, we're back office for sure.

 

Guest: Tyler Cyphers:: Yes, You don't get any of the fancy perks, that's for sure.

 

Host: Paul Barnhurst:: Yes. It was also in 2009, 2010. I think it was 2010 by this point, but it might have been late 2009. Companies weren't willing to spend a lot either.

 

Guest: Tyler Cyphers:: Yes.

 

Host: Paul Barnhurst:: So it was pretty funny. But that was my "Welcome to the corporate world, remember you're back office."

 

Guest: Tyler Cyphers:: It's not super glamorous.

 

Host: Paul Barnhurst:: No. So the next question we like to ask people is, you've described what great FP&A is, that decision-making, that forward-looking and forming the business, how do you see FP&A changing over the next five years with a generative AI and everything that's gone on? Do you see it still being the same or do you see the function evolving?

 

Guest: Tyler Cyphers:: There is a lot of talk about AI and what will it do to jobs and so forth. For FP&A, specifically, I think it accelerates the strategic nature of what we do. If I look back, think back to like when I started early on in my career and I was trying to make my way. It was around the typical things taking those that day-to-day reporting and the ins and outs of blocking and tackling the business, figuring out how do we fix things that are broken, optimize and streamline processes so that we can ultimately spend as much time as possible on that back end, and understanding the business, working with business partners, and driving outcomes. So I think, when I did it was like a lot of heavy lifting. Now with generative AI and all the tools that are available to teams, I think that part becomes much more simplified. I think then the focus and the value add comes on the back end. So again, I don't know that it necessarily is a massive landscape shift. I think it means that the tools and the skills that, good FP&A people have and own will slightly differ, be probably less technical, more analytically problem-solving, sales oriented, frankly.

 

Host: Paul Barnhurst:: Yes. No, I appreciate that. It's always interesting to hear what everybody thinks of it. I think that one thing we see is there's hope and belief that it will help with many of the mundane tasks. The data prep, the data cleansing, as we continue to go on and allow us to be more strategic. I even heard one person who shared that he thought we may have to be more data science technical in that area, less so in many of the things we do today, the data cleaning and the prep and I thought that was interesting, you know, to understand the basics of an algorithm. So it'll be fascinating to see how it all plays out over the next several years and decades, frankly.

 

Guest: Tyler Cyphers:: Yes, I agree. There are some interesting tools that automate a lot of the ETL process, and extract load, and I think those will be very interesting to help again, automate bringing together a bunch of disparate data sources and creating more of that back-end data warehouse, for lack of a better term. But Yes, it's interesting. I'll be keen to see where things go from here for sure.

 

Host: Paul Barnhurst:: Agree. So we've talked a lot about general FP&A. Let's get to know you a little better before we jump into some more questions here. So can you tell our audience your background? You mentioned you've been at FP&A, I think, about 12 years. You're running your own business, but maybe give us a little bit more of your story.

 

Guest: Tyler Cyphers:: So I grew up in Florida. You mentioned, I went to UCF and then did my MBA at Rollins. I got into finance there working for Disney at the time. I met my wife, she was working for Lockheed Martin in a contract role. I ended up following her. I ended up in California for, like, roughly eight, nine, or ten years. Then we bailed there roughly two, three years ago. We have young twin daughters. So we moved to the Nashville area to be a little bit closer to my family. Professionally, as you said, I've been in and around finance for 12-plus years, started with Disney, and spent the last probably ten, or so years in the cybersecurity vertical with a couple of relatively large software companies, they're running FP&A. I left the early part of this, as you mentioned, and set off on my own to build my own consulting business, doing fractional CFO and fractional FinOps work. So it's been a heck of a journey.

 

Host: Paul Barnhurst:: I can imagine. So the first question I have, if I remember right, your specialization was marketing in college. Is that right?

 

Guest: Tyler Cyphers:: Yes.

 

Host: Paul Barnhurst:: But how did you end up there? From what I saw, your first role with Disney was finance. I think it was marketing finance, finance-based. How did that happen? How did you end up going from marketing, which is usually not viewed as that numbers, finance type role, analytical role, even though there can be those people to hey, I'm the numbers guy, so to speak? How did that happen?

 

Guest: Tyler Cyphers:: Honestly, I'm still not entirely sure. I was going to school in the evening. So I was working full time for a small laser manufacturer, and I was going to do my MBA at night and a professional program, and they had had somebody come in and give us a presentation on the internship program at Disney. One night, I spent an hour and I did the application online. At the time, I had a marketing undergrad degree, and so I applied for the marketing internship. Once you finish the application, it says, oh, hey, there are these other internships you could also apply for. All you have to do is click the button. You don't have to re-enter your information. It's already there. So I was like okay, cool. So like I clicked the button a few. I didn't get a single call about marketing or anything else. I get called back for finance and I went through the initial round of interviews, there are thousands of people applying for these things and I think they had 30 or 35 internships.

 

Host: Paul Barnhurst:: Yes, Disney gets a ton of applications.

 

Guest: Tyler Cyphers:: Exactly. So I got lucky enough, I get hired on to a six-month internship in resort finance, and then I get hired. After six months, I got brought on full-time and I ran our international sales, marketing, and finance, did that.

 

Host: Paul Barnhurst:: Well, thank you for sharing. It's funny how those little things sometimes work out that you're like, I'll click these buttons. Odds are nothing will happen. But it doesn't take any time.

 

Guest: Tyler Cyphers:: As I said, I didn't think anything of it. I never intended to go into finance. I've always been good with numbers, but I've always thought of myself as more on the social side than, what I think most people would think of as a traditional finance person.

 

Host: Paul Barnhurst:: I think that's starting to change. We're seeing that. But I agree with you. There used to be the idea. The pencil pocket and get your push your glasses. You're the typical counter accountant. If you work anything in finance where now you're starting to see, as I said, strategic center for FP&A, need to be able to manage business relationships, get out in front of people. So it's been great to watch because I like you. That's my favorite part of FP&A, working with people. I love a good spreadsheet. I like my numbers. I can work my way around them. But if you ask me what I enjoy the most, it's those relationships and the decision support and helping move the business forward.

 

Guest: Tyler Cyphers:: I'm right there with you.

 

Host: Paul Barnhurst:: Speaking of that, I know at your last two companies before you started your own business, you were head of FP&A. Well, what's the number one thing, from your vantage point, the FP&A needs to do to be viewed as that strategic business partner, to help make sure the business realizes they're not the back office, and "leave me alone, go, run your spreadsheets."

 

Guest: Tyler Cyphers:: It's a good question. The people that I've seen be very successful and on the flip side, those who have struggled, the people who are the most successful have a genuine curiosity about the business. So it's very hard to go into whether you're supporting sales and marketing or the engineering teams, your customer success, it's very hard to go into those teams and try to be that analytical value, add extension and thought partner if you can't, one, understand their challenges, what their business is. Ultimately, it comes down to being able to talk the talk. So you have to be able to communicate on their level and understand that your reports, your analysis, whatever in the context of the business and why it's important to them. So I think it sounds so simple, but people don't do it. They're so in their silo of the spreadsheets and the numbers and it's like, I got to get this report out. If you would take some time to understand why you're doing it in the first place and understand the business impact and context, I think people would be a lot more successful over the long term.

 

Host: Paul Barnhurst:: I agree with you. So I'm going to have a follow-up question here. Any practical tips you can offer to do that? Let's say, I'm new in a role. I've come in, I'm head of FP&A. I know you've been in those situations. Maybe 2 or 3 things that you can do in those first 90 days to show the business that you want to be the partner, that you want to be strategic and start to develop those relationships so that you're not in six months, and then trying to figure out how do I crack down the door and get them to let me talk to them?

 

Guest: Tyler Cyphers:: Yes, it's a good question. I don't know if I'll give you 3, 1, or 2, but when you first come in, you have to be intentional about finding time. So whether that's setting up one one-on-ones or talking to different people within the business, you have to get in front and face to face with people. Now, I think traditionally maybe a lot of finance FP&A folks, that's not their bread and butter, and you can make people nervous, but ultimately there's no shortcut to real-life conversations. In those conversations, I think, putting your pride aside and not being afraid to ask questions because there's no harm in not knowing, and admitting like, hey, I don't know all of the answers but I want to make sure that I'm here to help, can you tell me a little bit about your business? What are the key challenges that you're facing? Where are the pain points? That'll start to build a framework for you to maybe dig in a little bit more and figure out, where do I fit in. What is my role within the business and how can I support them to make their lives easier? So humility, I think, is a huge aspect of not being afraid to ask questions and learn that way.

 

Host: Paul Barnhurst:: I like it. If I was to summarize that, I would almost say three things is, one, be intentional, two, make time, and three, check your ego at the door and learn.

 

Guest: Tyler Cyphers:: Yes, I love that.

 

Host: Paul Barnhurst:: Because we all have that sometimes where we're like, well, I can figure this out after, I don't want to be the stupid one and ask that question.

 

Guest: Tyler Cyphers:: Well, and then you get yourself into a position sometimes where you stand I was going somewhere with that. We can cut that part.

 

Host: Paul Barnhurst:: All I'll let him cut that part out. No problem. So let's move to the next question we have here. You write a weekly article. You have a newsletter called Cash Flow for coders. I know that's around helping coders and simplifying finance for non-finance people. First, how did you come up with the name? Where did cash flow for coders come from?

 

Guest: Tyler Cyphers:: I can't lie to you. ChatGPT is fantastic. So honestly, I probably went through hundreds of different names and iterations and I'm like, I like this, don't do that. Then I came down to probably 4 or 5 that were in that realm of, to your point, what's the word I'm looking for?

 

Host: Paul Barnhurst:: That you like that we're in the realm of.

 

Guest: Tyler Cyphers:: I guess, it's in the realm of teaching, I've lost.

 

Host: Paul Barnhurst:: Yes, they sounded like they were educational for people who weren't finance-based.

 

Guest: Tyler Cyphers:: Correct. So I think that's the intention of it.

 

Host: Paul Barnhurst:: Hey, there. It's your host, the FP&A Guy. Today, I'm thrilled to talk to you about Plan Buddies, where professionals meet excellence. This isn't any community. It is a community run by and for planning professionals. Our plan buddies were all about fostering connections, sharing knowledge, and providing mentorship among FP&A experts. Ready to elevate your career? Visit planbuddies.com and become a member today. Here's a special treat. Use the promo code TheFPandAGuy, that is the FP&A guy for an exclusive 25% discount on your first year membership. Fun, I like that. How has that gone so far for you? Talk about that and how important it is for non-finance people to understand, at least the basics of finance.

 

Guest: Tyler Cyphers:: For me, it stems early on. In your career, when you're an analyst and you may be supporting a marketing or a salesperson, and you're trying to help them understand the difference between, a cash versus an accrual and how that impacts their budget and the timing and so forth. So something that, for you or I or anybody else, that's been in FP&A or accounting or finance for a long time seems very straightforward. It's not for a lot of people. So advising a couple of early startups, a lot of these are technical, product-minded, sales-driven founders. Frankly, the basics of how do I manage my cash, how do I forecast sales, simple stuffs, as you or I might think about it, overwhelms them to a degree and they don't know where to start. I think that's why it came about. Frankly, when you say, how's it going? We've only launched it maybe a few weeks ago. So it's still in the early stages. But Yes, I'm enjoying it. I think it's a good outlet and hopefully, people are finding value from it.

 

Host: Paul Barnhurst:: Good. I'm glad you're enjoying it and good luck building that. I know it can be a lot of fun to ride. I know you've been building your brand out there on social media and things. Good luck with that. I know today you're working as a consultant, and one of your focuses is helping cloud-first companies optimize cloud spend. Why is it so important that companies have help managing cloud spending? Why are you out there being a consultant in this area?

 

Guest: Tyler Cyphers:: I think it's a fair question. First of all, the consultant is always a dirty word. So I prefer fractional leadership. It sounds a little bossier but it sounds better than the consultant.

 

Host: Paul Barnhurst:: Well, I'll call you a fractional leader.

 

Guest: Tyler Cyphers:: I appreciate that, thank you. Let's go ahead and edit all the prior stuff to that now. Listen, if you think about software business, generally, the two biggest expenses are right people number 1, or 2, and then the cost of running the software. So the cost of the cloud services, whether it's Google or AWS, Azure or whatever. If you talk about the people aspect, there are entire industries, and departments dedicated to managing and maintaining that particular resource. But when you look at the cloud itself, and the recent development of the FinOps as a discipline, nobody is doing this. So I think, for me, I've lived it firsthand, I've been in FP&and been in finance, owning cloud finance teams and seeing that even the most mature companies are immature when it comes to a FinOps posture or a cloud cost management, however, you want to describe it. But there's not a lot of oversight there. So I think, depending on where the companies are at, from a life cycle perspective, some of them may have their own internal FinOps teams, and some companies may not be able to afford a full-on team. So hiring, fractionally, like any other fractional role, might be a good option. Then some teams don't know where to start. So having somebody who's seen the movie before and can help guide them on even the most basics of how to get started, I think is, super beneficial.

 

Host: Paul Barnhurst:: I would agree. From the conversations I have had, I haven't had to deal with cloud spend. I worked with one company, but that was all managed by the IT side. I focused on everything else in the business for the SaaS company I worked with. The second one I worked with, I was more in a sales coordination role. So I haven't had to deal with cloud spending at all, even though I've worked for two SaaS companies. That's always an interesting area for me. Something you mentioned is, you're starting to see this rise of FinOps and different things. So in your view, let's talk large companies for a minute, the big huge ones that have the huge cloud spend, should they have a dedicated FinOps team to manage that? Should that sit in FP&A? Does it matter as long as the person is qualified? I mean, what's your thoughts? How should people be thinking about it as they're scaling and growing? Because I think it's an area that a lot of people are not sure what's best practice. How do I think about it?

 

Guest: Tyler Cyphers:: I think, for me, when you say FinOps, there are two things. There's FinOps as a culture and a discipline, which is about financial stewardship of the cloud and the dollars and ensuring that you're getting the requisite business value. Then there is FinOps as an organizational structure. So from the first part, I think, it's inherent in the word financial operations. It's a financial stewardship-driven culture in the first place. Now the organizational aspect of it is more established companies, building the visibility around it, then optimizing the spend, that is all will be benefited by having a centralized team. The reason is, that it's a full-time job now, whether that team sits within a finance organization, whether it sits under an engineering umbrella or an IT, I don't think it matters. Again, under the finance realm, under my first company, under a more bifurcation, almost under engineering in my second company, regardless of where you put it, it does make sense to have folks dedicated to the management understanding, and providing that level of visibility into your cloud spend.

 

Host: Paul Barnhurst:: Do you think there's a point when you should have that dedicated? Because I would imagine small companies, that first FP&A person is going to do it, whoever that first hire is more than likely going to manage the cloud spending with some help from the business. What's that point, is it a couple of hundred million dollars in revenue, is it 50, or 1000 employees? What do you think is when you start to say, I should have a dedicated team that spends big enough, and the complexity is enough that I'll get value from it, any thoughts on that? I know there's not a right answer to this question.

 

Guest: Tyler Cyphers:: As you say, I don't know that there is a threshold of spend or anything like that that you can attribute. Hey, this is the point at which we need to make up an organizational change or add another person to the team, or whatever it might be. I forgot who I was watching a video yesterday. I'm talking about the human action model. The first point to get anybody to do anything is extinguishing the presence of discomfort. For us, internally, when we were building out these teams, the very first thing that happened was, we were realizing our forecast was getting blown out of the water every other month, and we had no clue what was going on. So it was like, okay, we have to reassess our focus. Then as you dig in there, you're like, well, now I need somebody to build and generate the reporting, or do I outsource from a tooling perspective? Well, now we have to go, manage, and implement all of these long-term commitments to help optimize our discounting and our rates, and well, who on the engineering side is going to own, all the usage optimization and finding the unattached volumes and all this? There's so much to it. It's intentionally complex by the providers because they benefit from it being that way. But, in my experience, it's any time they start to experience the pain around it, is what ultimately drives the change. So you can be a small company, a big company, it depends on that aspect to me.

 

Host: Paul Barnhurst:: Once it becomes a big issue because you've missed a large forecast, or because the contract doubled in cost, whatever it might be.

 

Guest: Tyler Cyphers:: You may be a super early-stage business and your concern is cash burn and runway. If that's your largest expense item, it might make sense to focus a lot of time and effort in optimizing that. So again, it's going to be super subjective for different teams.

 

Host: Paul Barnhurst:: It's like the idea of when do I get an FP&A tool? Well, when the pain of being in Excel is enough that you'll trade off the loss of some flexibility for all the other benefits that come with it. The cloud spend is painful enough that I'll trade off the cost of another head to manage this process. It will be worth it in the long run. Like anything, it comes down to a cost-benefit analysis. We can run those numbers, the optionality, and say, yes, it makes sense. So what advice would you offer to FP&A professionals that are helping manage cloud spending? They inherited the task. They joined their first SaaS company, and it's like, hey, you now own cloud spend and they have no clue. Any advice you'd give to people out there who are trying to get their arms around it? Where should they start?

 

Guest: Tyler Cyphers:: It's a great question. I think first and foremost, as you said, they're inheriting this. You have to take ownership of it. It's easy to spin in the cloud because it's so distributed, in terms of, well, who turns on the environments and what engineer designed the product, that's running in the product, who negotiated the vendor agreement. It's very easy to say, well, this isn't my problem. I'm ingesting the actuals. I can look at it and try to build my forecast from it. But whether it's right, wrong or indifferent, it's very easy to obfuscate yourself from it. So take ownership of it, number one. I think two, again, going back to what I was saying is that the collaborative effort that is involved to do this well, it's almost more than any other aspect of FP&A finance planning I've ever been in, because again, it's so distributed across teams that it truly is an organizational-wide effort. So as an FP&A person, if you can take ownership of it, whether it's a dedicated FinOps team, whether it's a cloud center of excellence, whether you meet once a month with different people, bringing all of those folks together in one environment to have a cohesive conversation. Again, one of the biggest challenges is visibility. So if you can start to provide visibility to the individualized teams around their spend and their volume and so forth, you can then start to hold those teams accountable and then starts to facilitate again more of this culture of financial stewardship. Then from there, that's when you can start to get moving in terms of starting to optimize from a savings perspective and things of that nature.

 

Host: Paul Barnhurst:: Got it and I appreciate that. What resources are available if somebody wants to learn more about cloud spend? I agree with you, the idea if you got to take ownership, don't let it be somebody else's problem. Because at the end of the day, it's going to be your problem when the numbers get bad enough.

 

Guest: Tyler Cyphers:: Exactly. So what resources are available, I would say, it's still a relatively new discipline. But there's an organization called, I think FinOps Foundation, and finops.org is the name of it. They do a great job of laying out the basic frameworks of what goes into FinOps from, again, the overall operational aspects, who are the key personas, how should people operate within those personas, and what are the different ways to optimize and visualize data. So that's a great place to start. There's a huge community around that. I think there's a new community that's upcoming from another friend of mine named John Meyer, it's called FinOps Nexus, which again, is a nexus of FinOps and community. So I think that's a great option. Then frankly, the Googles and the AWS and of the world, do a decent job providing some documentation within their website. So depending on what you're using, I would start there first and try to dig in as much as possible, particularly, the pricing aspects I think are super important so that you then can start to tie, well, here's this dollar on my invoice. How did it get there relative to then what is the engineering team doing, that will go back to understanding the business and the product architecture, which again, is not natural for most finance people. But when you can start to tie that, I turn this thing on, it created a dollar of spend. How did that happen? Then you start to be able to put all the pieces together when it comes to forecasting for the cloud.

 

Host: Paul Barnhurst:: FP&A Guy here. Today, I want to talk to you about Future Finance. Future Finance is the passion project of Glenn Hopper, CFO, AI expert, and all-around good guy, and Paul Barnhurst. We're starting a podcast together. Why? Because we want to talk about technology, AI, where finance is going, what the future of finance looks like. So join us on your podcast platform of choice. Check us out on Apple, Spotify, and others. We look forward to you joining us for this new show. It's funny how often it always comes back to follow the flow of the transaction, follow the money through the process, and understand the trigger points and how they impact whatever that amount is at the end.

 

Guest: Tyler Cyphers:: Yes.

 

Host: Paul Barnhurst:: Revenue or whatever it might be, just learn the flow, and how the business impacts those flows.

 

Guest: Tyler Cyphers:: Yes. You don't have to overcomplicate it. Let's say that.

 

Host: Paul Barnhurst:: Now, it makes a lot of sense. For those who are interested, I had Jeff Gursky and he helps companies write for Amazon. He works for Amazon Warehouse Cloud Services. He helps companies manage their spending. So he's a consultant. Companies come to him trying to understand their contracts. So he's often talking to engineering and FinOps or FP&A. He's written a few good articles. When you said Amazon has some resources, he's written a number of articles of helping bridge finance and technology. So if anyone's out there listening, I'd recommend checking them out. I had him on FP&A Today and we discussed some cloud spend things as another resource.

 

Guest: Tyler Cyphers:: Fantastic.

 

Host: Paul Barnhurst:: We're all trying to learn if you're dealing with that because it's still fairly new, as you said. So I'm curious. I've seen a number of studies that says, companies have a lot of waste in cloud spend. There are lots of opportunities to reduce waste. What's been your experience there? What are you seeing?

 

Guest: Tyler Cyphers:: It's a great question. I think I've seen the same studies you do. I mentioned that the FinOps Foundation, they do like an annual study on cloud spend. They are pulling a ton of different companies and there's a bunch of cloud cost management platforms that also released their own data. I think depending on what you're reading, it's anywhere between 20% and 50% of cloud waste in an organization. When you're talking about 600 billion plus spent annually, probably this year on cloud services, it's not a small number.

 

Host: Paul Barnhurst:: Yes. Let's see if I take 20%, we'll assume the low end. It's 120 billion. I'll take that.

 

Guest: Tyler Cyphers:: It's a lot of money and frankly, from what I've seen, it starts at the product development stage. So there's not a great framework at that early product inception product development phase, at least, five years ago, didn't exist. So you're moving fast. You're building these products without any understanding of what the cost impact is. Then once it's in production and customers are using it, you're adding out features. The way that the customers interact with the platform may change the cost. So there's no perfect science around that aspect of it. In that environment, it could be rightsizing, meaning you're using a machine type that is way oversized or overpowered for the task that you're doing. Something as simple as that may mean that you are spending more than you relatively need to, or the way that compute works in a lot of these is you have to attach a memory to them.

 

Guest: Tyler Cyphers:: But a lot of times, if you don't do it correctly, you can have these unattached memory volumes and they're not attached to anything, not doing anything, and they're sitting there in the background costing you money every month and you don't know about it, or again, rate optimization. If you're spending $100 every month, and you know that for certain. Well, now you can go to Google or Amazon and say, hey, I'll commit $100 every month, and they'll say, well, we'll give you 30% off for committing, and now you're spending $70 right away. So there's a lot of this. Again, you asked earlier, why did I start that, I don't think that there's a maturity level around this today until companies start to feel the pain, that they're going to focus on these things so that inherent waste is built into the system right now.

 

Host: Paul Barnhurst:: Yes, it makes a lot of sense as I'm listening to you talk and I'm thinking about it, processing in my head, it sounds like immaturity leads to a lot of suboptimal decisions. The frameworks, the learnings, those things from having, 30 years of history aren't there. So you continually have different cases and different learning cases and all these companies where it's like, if I did that again, I could have saved 40% or 20% or whatever if I do it differently. So right now, it favors the vendors as you learn because you're often paying more than you would in an optimized process.

 

Guest: Tyler Cyphers:: Fair, and I think it's a lot of foresight, too. You're building out an early-stage company, you're building out a CRM or you're going to your point earlier, you're going to go implement an adaptive or a plan or some tool. You build it for a purpose of today without what does this need to look like three years from now, five years from now? Then you get these Frankenstein systems that are Band-Aid on top of each other and different things, and then when it comes to trying to unravel that and build something that's scalable and efficient, it's super painful. So I think that's where we're at is like, there's a lot of that, happening on the cloud side for the last, five, ten years. Now we're getting to the point. That's what FinOps is today like as a culture. It's like, well, let's put that financial stewardship mindset at the beginning of the process, ensure that there's business value as we're building the product so that we can then continue to monitor and analyze it moving forward. That's easier said than done, obviously.

 

Host: Paul Barnhurst:: I agree. You made me think that the first episode we had of FP&A Tomorrow episode one, we did an episode all about product. We brought in two product people and one FP&A person. One of the product people, Dara, I supported her. When I worked at Solera, she talked about how it's critical for FP&A to be involved in the early days. As I heard you talking, I couldn't help but think that this is one of those areas where if you're there from the early days and you're looking at things from the finance and all the different perspectives, you're more likely to catch things than, hey, we got six months into it, we're big enough, now, let's bring in finance. You've already made some architecture and different decisions. That inherently is going to lead to some waste or cost to fix.

 

Guest: Tyler Cyphers:: Yes. As I said, the pricing structures, especially, as you get into generative AI and per request, it's very complex. So I talked earlier about why the cash flow for coders thing and some of the different little startups that I've been advising, a lot of their questions in the early days aren't like can you create a PNL? It's like, hey, we want to use this database in our tool, what does that do to the cost of the product, how do I model out what we're building? It's not always very straightforward. So even for a guy, who is pretty good with numbers and understands some of this, even for me, it's difficult at times. So I can imagine if that's not something that is on your frame of reference, it can be super hard.

 

Host: Paul Barnhurst:: FP&A Guy here. If you enjoy FP&A Tomorrow, I want to personally invite you to listen to the Financial Modeler's Corner. This podcast is all about the art and science of financial modeling with distinguished financial modelers from around the globe. Check it out today on your podcast platform of choice Apple, Spotify, and all other major platforms. Listen as we talk to financial modelers and ask them what is their favorite shortcut, what skill helped them most in their career, should we use circular references or not, and other controversial topics. Tune in today. I bet I could see where that could be a real challenge. Well, I've enjoyed discussing the cloud. I think it's an area that people are dealing with the pain today or at some point, in their career, they're going to deal with it. The cloud isn't going anywhere. But 600 billion expected to get over a trillion by 2030, I believe, or even maybe earlier, I've seen different studies, it's a huge part of our spend. It's like SaaS products. They're not going anywhere. We probably all have some that we're wasting money on as a company and as individuals.

 

Guest: Tyler Cyphers:: Yes, no doubt.

 

Host: Paul Barnhurst:: We're going to move into our next section which called the rapid-fire section. You get no more than 30s to answer, ideally 15-20. Then at the end, if you want to elaborate one, you can. So the first one and I'm going to guess, this will be a pretty easy one for you but we'll see. What is the one software you can't live without as an FP&A professional?

 

Guest: Tyler Cyphers:: It's still excel.

 

Host: Paul Barnhurst:: I figured that was going to be the Excel.

 

Guest: Tyler Cyphers:: It'll always be Excel.

 

Host: Paul Barnhurst:: It's like the Energizer bunny. It keeps going and going and going.

 

Guest: Tyler Cyphers:: When you say you can't live without it, I can live without a different tool and do Excel. So like that.

 

Host: Paul Barnhurst:: I know what you're saying, you can't live without a spreadsheet. You could go to Google Sheets.

 

Guest: Tyler Cyphers:: Yes.

 

Host: Paul Barnhurst:: You can go to Eagles or any of the 20 out there. So at the end of the day, the answer is probably a spreadsheet than a specific brand fair.

 

Guest: Tyler Cyphers:: Yes. Let's do that.

 

Host: Paul Barnhurst:: We'll go with that. Are you currently using generative AI?

 

Guest: Tyler Cyphers:: Yes, I think I mentioned it earlier. I use it in my own personal business because, again, when you're running your own business, you're the marketer, you're the lead gen, you're the Biz Dev, you're the copywriter. So I use it from that perspective to get ideas and name things, obviously.

 

Host: Paul Barnhurst:: We talked about it.

 

Guest: Tyler Cyphers:: I'm not sure, for me, it's at the point of using it in a financial context. I'm not sure that the products are mature enough nor do I, frankly, trust them yet.

 

Host: Paul Barnhurst:: Okay. Got it. Next one. What is the number one technical skill that FP&A professionals should master?

 

Guest: Tyler Cyphers:: I don't know. I'm going to cheat because I don't ever hire for technical skills. You can squint your eyes, and maybe this is technical, I think, copywriting which traditionally is a sales advertising skill. But I think if you think about all of your communications as an FP&A professional, email, presentations, texts, slack channels, lots of it is over words on paper. So I think that understanding how to sell and a lot of that is understanding people's behavior. So as you grow and learn to sell your ideas and whether you're asking for a promotion or whatever it is, I think that's super important skill to have.

 

Host: Paul Barnhurst:: I like it. That's the first time we've had that one. I hadn't thought of it that way but I can see what you're saying, so I appreciate that one. What's the number one soft or human skill we need to master?

 

Guest: Tyler Cyphers:: I don't want to say broadly communication, but I think learning to set expectations is super important, especially, in a business partner role. You're going to be pulled in a lot of different directions and ask a bunch of different stuff, and it's up to you to be able to set the expectation with that business partner, client, whatever it is, as to setting those boundaries and how you operate, what you can and can't provide. I think if you do that well, you set yourself up for success. If you do it poorly, you're going to be looked down upon as someone who can't deliver, frankly.

 

Host: Paul Barnhurst:: Got it. So the next section we're going to move into is the Get To Know You section. This is where we ask some personal questions to get to know you a little bit. What's your favorite hobby or passion that you have?

 

Guest: Tyler Cyphers:: I love golf.

 

Host: Paul Barnhurst:: Golf watching, playing, or all the above.

 

Guest: Tyler Cyphers:: My wife hates it when I watch. She'd rather take a nap. She thinks it's boring, but I don't mind. I like to watch it. I don't care if it's PGA tour or Liv golf or whoever. I'll watch it. I love to play it. That's also a big bonus of doing my own thing now. I can pretty much go play whenever I want.

 

Host: Paul Barnhurst:: What is the one book you would recommend to our audience if you could recommend a book that they should read?

 

Guest: Tyler Cyphers:: So the book that I give anybody that's ever worked for me, it's called Lincoln on Leadership. I was first introduced to it when I was in college. I think I'm like a sales teacher, but it's like semi-autobiographical about Lincoln and his life, but more so around how he approached team building and leadership and delegation. So for me, it's been super interesting, and I think it's always very insightful to give people a window into how I think about the world. So I'd say that and then I'll stop there. But if I were to give one more, I'd say the Psychology of Money is very interesting. I read that one recently. So I think people would get a kick out of that.

 

Host: Paul Barnhurst:: Great. I like both of those. Anything on Lincoln, I love. So that's a good one. If you could travel one place in the world tomorrow, where are you going?

 

Guest: Tyler Cyphers:: I would probably go to Spain. I am going Barcelona.

 

Host: Paul Barnhurst:: So we're going to Barcelona. Then if you could have dinner with one person in the world alive today, who are you going to dinner with?

 

Guest: Tyler Cyphers:: My wife.

 

Host: Paul Barnhurst:: Smart man. You're not the first one to give that answer.

 

Guest: Tyler Cyphers:: We don't get enough time. We have twins of seven year old. We don't get to go out enough.

 

Host: Paul Barnhurst:: That's a good point. Now, setting your wife aside, who would be that next pick?

 

Guest: Tyler Cyphers:: Elon.

 

Host: Paul Barnhurst:: Elon would be a fascinating one. It'd be interesting to have, especially, if you could give them some truth serum and you knew you were getting what he thinks on everything, because sometimes I think he does a lot of things for shock factor, not that he necessarily believes what he's saying.

 

Guest: Tyler Cyphers:: Yes, I think that's super fair. I think there's a bit of personal branding and marketing happening there. But you can't ignore the success that the guy has and the way his brain works is outrageous to me.

 

Host: Paul Barnhurst:: I agree with you. We're on the same page there. We're going to go ahead and wrap up here. I have one more question. Then we'll give you an opportunity to share if people want to learn more about you, your business, and how they can contact you. The question I have is, if you could give one piece of advice to our listeners to be a better FP&A business partner, what's the one thing they should be doing?

 

Guest: Tyler Cyphers:: Again, I would say, be curious. We talked about at the beginning of this, being curious and understanding the business, and ultimately, doing what you say you're going to do. That's the basis of lots of relationships. That's what business partnering is, building that trust and ultimately doing what you say you're going to do. So I think if you can do those things, you'll be super successful.

 

Host: Paul Barnhurst:: So the last question, people want to learn more about you, get in touch with you, how should they do it?

 

Guest: Tyler Cyphers:: No, I appreciate that. So right now, I'm super active on LinkedIn, at Tyler Cyphers, or at the cloud CFO. One of those two, I don't know what it is anymore. It's still in the process of building out a website for OpsCipher. You know, finance guy, not building websites. So that's been a slow process.

 

Host: Paul Barnhurst:: I remember that process by myself.

 

Guest: Tyler Cyphers:: You can find me at cipher.com when that's up, and feel free to reach out to me, or shoot me a DM. I'm happy to engage and have a conversation.

 

Host: Paul Barnhurst:: Great. We'll throw your LinkedIn information in the show notes for sure. Thank you for joining us, Tyler. I enjoyed chatting and you enjoy the rest of your day. We're excited to share with our audience.

 

Guest: Tyler Cyphers:: Awesome, Paul. Thanks, man. I appreciate you having me on. This is awesome.

 

Host: Paul Barnhurst:: Thanks.

 

Guest: Tyler Cyphers:: See you guys.

 

Host: Paul Barnhurst:: Thanks for listening to FP&A Tomorrow. If you enjoyed the show, please leave us a five-star rating and a review on your podcast platform of choice. This allows us to continue to bring you great guests from around the globe. As a reminder, you can earn CPE credit by going to earmarkcpe.com, downloading the app, taking a short quiz, and getting your CPE certificate to earn continuing education credits for the FPAC certification. Take the quiz on earmark and contact me the show host for further details.