Bridging the Accounting and Technology Domains
Michael talks with William Wu, public accountant and expense optimization aficionado. William takes us behind the scenes at his firm, Expense Reduction Analysts, and talks through how they work with organizations to look at their spending across a number of buckets within the organization, compare those to benchmarks, and find opportunities going forward to more effectively manage spend.
Introduction
Michael Daehne: Hey, y’all. Welcome to Inflect. I’m Michael Daehne. On today’s show, I’m joined by William Wu. Like me, William is a proud graduate of The University of Texas at Austin. He earned his CPA and then went on to help organizations implement ERP platforms like SAP and Microsoft Dynamics, helping bridge the gap between the finance and accounting and technology domains.
Over the last several years, William has evolved his career into a focus on expense optimization. Now working for an organization called Expense Reduction Analysts, William works with organizations to look at their spending across a number of buckets within the organization, compare those to benchmarks, and find opportunities going forward to more effectively manage spend.
In this episode, you’ll hear a little bit more about how it works when William and his team navigate an expense optimization program and you’ll also hear about his passion for coaching baseball. I hope you enjoy.
Opening
Michael Daehne: Hey, good afternoon, William. How are you?
William Wu: Hey, Michael, I’m doing well. Thanks.
MD: I appreciate you, joining us today for the Inflect podcast. Really glad to have you and talk a little bit more about yourself and some of the work you do.
WW: Hey, Michael, I really appreciate being invited to this. In fact, this is the first podcast I’ve ever done.
MD: Hey, there we go. I, I like it. I’m glad you chose us as your first. And I think, you know, you and I connected over our shared history and shared love of all things Longhorns and Burnt Orange.
WW: Absolutely. Hook ‘em!
MD: Hook ‘em, that’s right. And as we were talking, you were telling me a little bit more about ERA and the work you do, which we’ll get into.
I was struck by the, the fact, like, why would you not be interested in that as a service offering, as I think about our clients and folks in my network. And so, I’m glad to have you on to tell us a little bit more about your story and your work, because I think it could be really interesting and valuable to folks in our network. So, I’m glad you’re here.
WW: Great. Thanks for the platform too, because I think, and I know we’ll get into this a little bit more, but I think what I do now for clients is something that in my mind, at least from my perspective, I’d be interested in getting feedback from your listeners, it’s a why not proposition. I’m looking forward to getting into it.
MD: Yeah, excellent. And I think it complements some of the work we do at FlexPoint really nicely, and I think there’s just great synergy there.
Initial Career Phases
Michael Daehne: So, you know, before we get into that, you know, we’ve talked before, but maybe for our listeners, tell them a little bit more about yourself and your background and your current role.
William Wu: Yeah. So, I’ll, give you some, uh, some credentialing here in my background. I am a CPA by trade. I’m a UT Longhorn. I went to the Business Honors and also the Accounting program there, which was tops in the country still is, I believe, years later. I started my career off in public accounting.
I did that for a few years and then got drawn into doing technology consulting. And I spent a bulk of my career, and this was at back then the big six, now the big four. Started off doing public accounting and then moved over into management consulting. Worked with SAP, did global implementations. Did that for about five years and then didn’t want to travel all the time, it was just what I did at that point. When I first started, it was all very glamorous. But really wanted to just be at home. I’m a native Houstonian and found an opportunity here, post Y2K, kind of dating myself there, and found an opportunity to launch a business assistance practice for the mid-market.
And from that point forward, I co-founded a firm that focused on delivering ERP and CRM solutions to mid-market size companies, and really just built that up, we achieved some, some success there and was really the largest Microsoft Dynamics and Oracle NetSuite provider here in this part of the country.
And then COVID hit, right. And, you know, had maybe a lot of us thinking about what we want to do with our lives when we’re all quarantined.
And an opportunity came up, and I’ll never forget the voicemail that was left by a recruiter, and it was, Hey, we’re looking for CPAs who can sell. Call me back.
And that was it. That’s all, that’s all I got out of the message. And it intrigued me enough to call that recruiter back, and he introduced me to this world of expense optimization consulting. And it immediately resonated with me.
Transition to Expense Optimization Consulting
William Wu: I mean, I had never come across in my entire professional services career, I had never come across this concept, this idea, and it seems so remarkably simple in that, we help clients review their spend and identify areas where they may be spending more than they need to be, or maybe they even should be.
And we do that with this value proposition of, you know, there’s no, there’s no out of pocket costs. There’s no risk. You’re not obligated to take our recommendations. We’re just in my mind and I – you know, consulting, you know, we’re taught never not to use the word free – but essentially it’s free consulting, it’s free insight, it’s free information to compare yourselves against the market, benchmarking, you know, what you’re doing compared with other companies in your industry, your competitors, and just evaluate where you stand.
And then our job is to go out and get better pricing on your behalf. And if we do that, then, you know, how we get paid – this is the other question that’s commonly asked is – we share in the savings. So, the model is remarkably simple. We cover over fifty different cost categories, which we can get into a little bit more.
I’m probably diving into a little bit more too much here in the introduction here, but at least wanted to set the stage to share with all the listeners here. That’s what I do now. And I just find it very rewarding, right, when you can get with the right organization where they’re open to getting some third-party insights and assistance and support and come in to be able to help drive, literally, impact to the bottom line.
And our scorecard’s very black and white. You know, it’s how much money did we save you? And that’s how we get compensated. It’s the ultimate pay-for-performance model. I guess in summary, that’s what I’m doing now.
Michael Daehne: Yeah, you know, I think what really resonates with me, William, as we’ve been talking is, I think it, it used to be that someone in a CIO, CFO, CEO position was, thinking, Hey, am I in run mode, grow mode, or transform mode? Right, I think that’s a Gartner framework. And now I think most executives are doing all three all the time. Right.
And so, so much of the work we do at FlexPoint really falls into that transform and grow bucket. But often what we’re helping our clients with is, Hey, what are you doing in parallel to run your business more effectively, to run your IT shop or your operations or whatever it is? And I think some of the capabilities that you and your team provide really help shed light on, Hey, where are, the low hanging fruit or the opportunities within our current model? Not even talking about changing out the tech or re-engineering the processes per se, but just where are we, you know, over or under relative to the benchmarks? We’re really seeing that that is a super valuable data set for our clients to help them navigate some of those decisions.
What I like in our conversations is, because you managed those large SAP and [Microsoft] Dynamics ERP implementations, you’ve lived the grow and transform piece as well.
Lessons Learned from Implementation Experience
Michael Daehne: Tell me more maybe from your past experiences there, maybe if there was a formative experience or project along the way, or maybe some lessons learned from those big project experiences before we get more into the expense optimization piece.
William Wu: Yeah. No, I’d be happy to. And I think, you know, what I always used to tell potential clients, and then I always reemphasize that with existing clients is that, when a company makes that decision as they grow and transform and takes that next step in their lifecycle, you know, ERP is not for everyone, right, and there’s a lot of value in it, but it’s probably not what people think it actually is, right?
There was this idea, I think, when it first came out that there was a one all, end all, be all, and, and once you implement it, you’re going to be golden. But the reality is far removed from that. And what I would tell you is that I think, just having dealt with it for 20 plus years in the trenches with clients, is that it’s always underestimated the amount of effort that’s required to be successful. That’s number one.
And then number two, you know, the thing that will make it be successful is: the partner that you decide to work with to help you implement the ERP system is such a critical decision that I found that was maybe not emphasized enough. Because all the systems out there in today’s market, I mean, they all can do the basic stuff. No one wants to spend more than they need to, of course, and this ties back into the ERA talk track, but ultimately, you know, all the systems can do what you need it to do, for the most part.
The differentiator is the consulting partner that you decide to engage that can make or break how successful your implementation actually is. So that’s always been the biggest piece of advice I would give to any company considering a new ERP or even CRM system for that matter. That cannot be understated, in my opinion.
Then maybe the other takeaway or lesson learned that I would share is that you really need to have two things.
One: you need to have executive support. I find that if that’s not there, I mean, maybe not surprisingly, things just don’t go as smoothly as they need to go. And then the second is clarity of the requirements or the scope. I think oftentimes that’s glossed over during implementation and, you know, people just kick that can down the road and try to make it work on the fly. And as you might imagine, take a step back and really think about it, uh, even if you haven’t been part of ERP implementation or a project of that magnitude before, that’s just not going to lead to good results, right? If you’re trying to adjust on the fly or, or try to hit a moving target, those projects usually end up way over budget and way under delivers.
One of the things that I did my prior life, at my prior firm, we took over a lot of projects, a lot of implementations, that did not deliver the intended results, either midstream or even after the fact. We came in and we tried to make it as right as it could be given, you know, where it started or given the point that where it was at.
And so that requires quite a bit of discipline, of course, on both sides. I think it applies to life, right? It’s just, you need to have that discipline and commitment to make something work.
MD: Yeah, absolutely. I think some of the themes you called out are certainly notes in my playbook as well. And I think the point around your partner, I mean that cannot be understated enough. Oftentimes clients will say, hey, help us with a tool selection, select a new ERP or CRM or you know loan servicing platform, whatever the case may be. And the answer is always we’d be happy to, but we want to help you pick a partner, too. Because that is really what’s going to make or break the implementation. Most of the tools, to your point, are mature and robust enough that they won’t be the deal breaker. But who you who you have partnering with you in that level of trust and expertise, coupled with the executive sponsorship, the clarity of requirements, all that, is so, so important.
Expense Optimization
Michael Daehne: Shifting over to the expense optimization piece you brought up earlier, tell us a little bit more about how it works, right? Because I think the idea of hey, someone’s going to come in and help me identify some opportunities, it sounds pretty great. How does it actually work when you roll into a new client?
William Wu: I’ll share this with you because, just in the time that I’ve been doing this, it’s coming up on three years now, and I will say that it really resonated with me as I shared earlier. Right. And so, I thought, man, this is going to be just such an easy thing to sell. I mean potential clients will be calling me left and right because this is a fantastic value proposition.
It’s been really interesting to me that, unfortunately, it’s not necessarily an easy sell. Partly because it’s not a well-known business service. I mean, whoever’s listening out there right now, if you’re aware of it, I think that’s great. And I think our main competitors are those that specialize in a specific area. For example, if you think about, maybe there’s a guy that’s helping you with your utilities, or it’s an insurance broker, or it’s a telecom guy.
We cover all those areas. And so, I think our biggest competition are some of these niche players that’s focused on specific individual, what we call categories. Think all up and down your SG&A [Sales, General, and Administrative expenses] and even your logistical and operational, even some direct costs, you know, we have analysts that are tracking market prices every day and that’s all they do, right?
So, you would think that, uh, we can do it better, number one. I just realized as I’m answering that question, probably deviated from the initial question of, and how do we actually, how do we actually do this? But I think the entryway into having the conversation with a potential client is the first hurdle, the first challenge, right? Are they open to having some outside inputs and outside data coming in or third-party data coming in to, you know, provide some benchmark? So that’s the first step.
Spending Assessment
William Wu: If they’re open to that conversation, you know, we will then get into, and there’s probably two parts. That preliminary step really is nothing more than us performing an assessment of your spend. And all we would need is (and we’d sign an NDA, there’s no engagement letter, you’re not obligated to do anything with us), but we would be happy to provide an assessment of your spend if you’re willing to provide us some transaction data. Typically, over the past 12 months.
And so, what we do with that data is that we have a business intelligence tool, a BI tool, that we take that data and we slice and dice it. And we’ll show some trends, provide a presentation where it shows you where your money is going, you know, who you’re spending it with, how much you’re buying from, and identify who your suppliers, partners, and vendors are.
And then we benchmark some of that and show you where we believe that you’re spending more than you need to be. It allows us to understand what a company is doing from a procurement standpoint, of course. And it also can be somewhat eye opening for the client to, to maybe see the data in a different way.
What we hope to get out of it, of course, is that we’ll identify some areas where we think we can truly deliver some real impact, meaning that we’ll free up additional cash flow and we’ll deliver some positive return to the bottom line.
That assessment step is all done pre-engagement. We provide that feedback, provide that input. And if the client then agrees with us that yes, we want you to take a look at our – you know, I’ll just pick out some other categories as an illustration, but, you know – we want you to look at our freight costs and our utilities and our waste and our uniforms and our payroll processing and our merchant cart fees, and our MRO supplies, our factory consumables, et cetera, et cetera, I could go on and on.
But once those categories are identified, we formally engage and we will then review to the line item and to the granular line item detail of figuring out exactly what you’re paying for a specific product or service, and we will baseline it.
Spending Baseline
William Wu: You know, we would need to have an anchor to where we can measure our performance against. Right, and along the way, we’re looking at strategies to how can you optimize your procurement approach in your spend? In terms of, you know, whether you have too many suppliers or vendors, or you don’t have enough, you know, different, different categories maybe call for some different strategies, or the way that you’re buying, or the way that you have your delivery time agreements set up. Those are all kinds of things that we look at for us to just to then finalize that decision of, yes, we can do better, right? Or I should say, to confirm the decision that we can do better based on the data that we have available to us in the market. And so that first step after creating that baseline is if then we have a checkpoint and then we both agree to move forward, it is about going to market.
Optimizing Spend
William Wu: We will negotiate with the incumbent. We will then bring in other suppliers and vendors to participate that we know will also be very competitive. We have our own network, but we’ll only invite alternate providers that are approved, meaning that we’re not going to invite someone that’s our client would not want to engage with.
Maybe it’s a geographical consideration, or maybe it’s a certain size and strength of the vendor supplier consideration. And those are things that we have to take into account because we don’t want to ever present an option that would never be accepted by our client. But a lot of that is just what I call hand-to-hand combat, right? It’s just pure negotiation, using data as really our leverage. And really just trying to drive competition for our client’s business. And along the way, we find out how important our client’s business is to that particular supplier or vendor. And we provide that feedback to our client.
So that’s also, it’s an additional value that comes out of our engagement. That’s as good feedback for our client to be aware of. But ultimately, our goal is to find a better alternative, whether with their incumbent or whether it’s a different provider.
And it’s not always, I will also say this, it’s not always about finding the lowest cost, right? And actually, I would say oftentimes it’s not about finding the lowest cost. It’s about finding better quality service. We’re never going to sacrifice the quality of the product or the service. The client’s got to qualify that. And really it’s the client’s discretion of which direction they want to, you know, which, which direction they want to go in.
For those listeners out there that have gone through this process, you know how time consuming it can be. And if you think about all the different categories we cover, we can also fill in the ones where you simply don’t have the time to even spend the time investigating it, right?
So, I think that’s where we can really be a big help. So anyway, I think in terms of running through our process, I mean, that’s essentially the summary level view. There’s quite a bit of work that’s involved with that. But, you know, I think ultimately for us as consultants, I think you hire consultants primarily for two reasons. One, for their expertise. And then two, because you don’t have the time to do it internally. And I think we, we, we fit that bill nicely and address that on both counts.
Michael Daehne: Yeah, that was an excellent overview, William, and I think, you know I was going ask you about some maybe common buckets or examples, I think you actually you hit on some of those and in the course of the description, so that’s awesome.
We’ll make sure we include the link to your website in the podcast episode when we publish it because I think it could be, as I mentioned, very useful for our clients, particularly in this economic environment when looking at operational costs is more important than ever. I think some of the stuff y’all are doing at ERA is right on the money – no pun intended – in terms of what some of our clients need.
Away from Work
Michael Daehne: But before I let you go, I want to ask you a couple non work related questions starting with: I know you, you’re into baseball and I think you like to coach baseball. Tell me a little bit more about that.
William Wu: Oh man, I tell you, baseball’s a passion of mine. I love baseball. Ever since I was a kid, watching the hometown Houston Astros here. Whether you’re an Astros fan or not. I know they’ve done some things that not everyone agrees with. And I don’t either. I don’t condone it.
But, you know, baseball has always been a big part of my life.
My son started playing and I was, as you might suspect, a big supporter of that. For the guys out there that have sons and who are playing ball, I mean, to me as a dad, there’s nothing more fun than watching your son go out there and competing in any sport.
And for me, it happened to be baseball. And it was just a way for my son and I to spend time together. And as time went by and he decided to take it more seriously, I was trying to find a place for him to play, outside of his school. And got involved with this, travel team organization.
And, you know, a lot of times it’s about relationships, too. I became friends with the guy who ran that organization. And it first started out with some administrative things that I did for that organization on the side. He knew I was a CPA, so he asked for some advice there. And one thing leads to another, so then I became kind of a general manager of the team that my son was on.
Which then led to me becoming assistant coach in the dugout. And then, when COVID hit, our head coach, who was a former professional minor league baseball player, by the way, he got COVID. So, I got to stand in and we ended up winning our first tournament of the summer. And that’s how my career as a baseball coach got launched.
And I gained some street cred as you might think, and been doing it ever since. And I tell you, it’s been, it’s been so rewarding, one, to just be with my son through that, but then two, to really be a part of all these other kids’ lives, right? So, some of them have these dreams of playing, of continuing past high school, and continue playing on and pursue that as what they want to do with their life.
It’s just really, really cool to be a part of. And I couldn’t think of anything better to do outside of ERA.
MD: Yeah, that’s awesome. I love that. And I think that is a great note to end on. The first time we talked, I think you maybe talked more about your passion for baseball and coaching and helping your kid than even work, and so I wanted to make sure we included that.
Closing
Michael Daehne: William, as I mentioned, I appreciate you taking the time and talking a little bit more about the work y’all are doing at ERA and, and I think great opportunity for our clients and those in our network that may be looking to get some benchmarks and understand where they may be high or low in the different spend categories. And I hope they’ll check y’all out.
William Wu: Michael, I really appreciate it. That was fun and enjoyed it and certainly look forward to collaborating with you guys.
MD: Yeah, it sounds great. Thanks, William. Have a good one.
WW: You bet. Take care.
Mentioned
Expense Reduction Analysts’ case studies, filterable by industry: https://us.expensereduction.com/case-studies/