FactSet Research Systems Inc. (FDS) Earnings Call Transcript & Summary

Hey, next up, we have Cindy Finkelman. Cindy is the CIO at FactSet Research Systems, reimagining the business and leading and innovating in times of radical change. Cindy, take it away.

Hey, Hunter. How are you?

Great.

That was a tough act to follow. That was an awesome panel. Thank you all for those nuggets. So for those of you who I haven't met today, my name is Cindy Finkelman, and I am the CIO at FactSet Research Systems. And FactSet is a tech company that provides financial data and analytics to the investment management community. And we've been focused on driving digital capabilities for our clients for many years. So today, I was inspired, along with Rashmi, a fellow panelist here, to talk about those women that have a seat at the table and really forge the right relationships that allow them to drive business innovation. And so I would like to introduce all of our panelists by having each one of them state your name, what kind -- your role in the company you're at and just a very quick short sentence on why you were motivated to participate in this discussion today. Bhavani, do you want to start? I think we're missing Bhavani. Okay. How about Rashmi?

Hi. I'm Rashmi Kumar. I'm SVP and CIO at Hewlett Packard Enterprise. And I'm really excited to be in this inaugural summit and to share my stories of digital transformation. Thank you for the opportunity.

Wendy?

Hi. I'm Wendy Pfeiffer, and I am the CIO at Nutanix and also have a couple of Board seats for Qualys and SADA Systems. I wanted to participate because I believe that the more that we can represent who we are and how we're leading, the more that we can learn from each other and improve how we lead.

April?

Hi. I'm April Sandoval. I lead data and analytics at Slack. And I'm excited to participate in this panel to provide the perspective of companies that are born in the cloud and the journey that cloud companies go on during this disruptive time.

Stephanie?

Hi. I'm Stephanie Moore. I'm the SVP of Marketing at Softtek. And I am really thrilled to be here today. I've spent the past 25 years or so in technology, and I don't get to spend a lot of time with great women because there aren't that many women in technology. And I think and I hope that's changing, but I'm absolutely thrilled to be here today to represent a woman in technology.

That's awesome. Thank you all. So Stephanie, maybe you could start us off with how has your business fared through the crisis and what changes do you see driving the business?

Sure. Sure. So I work for Softtek, which is an IT services company, a consulting company. And we fared pretty well primarily because companies need technology today to expand their channels or change their channels or improve their conduit to the customer. What's really interesting though about my organization, the marketing organization, is that we have had to dramatically change the way we market and sell to prospects and clients. And in our business, there is an awful lot of high-touch interaction with prospects and clients because as somebody said earlier, we're trying to build trust with our clients. And so right before the pandemic, we had actually done a design -- a 2-day design-thinking workshop with an insurance client. And during 2 days of a workshop, you get to know all about the client's business and all about the client's families and they get to know about yours and you create this incredible trust and hopefully, ultimately, a great commercial relationship. Well, that has all gone away now. And so my organization has had to really flip and figure out how to connect to people in a digital way. And for B2B companies, I think this has been much more challenging. I think B2C companies have always been able to do this. That's how they do business. So that has really been a very interesting and earth-shattering change to my marketing organization, but I bet a lot of others, too.

Awesome. And April, what about you in this regard? How is your business faring at Slack?

Yes. I wanted to talk about sort of our internal transition. Although Slack is a collaboration tool, we very much came into the office every day. Once COVID hit, we had to mobilize quickly to remote work, and we already had the digital footprint in place to do that. This is because Slack again is a collaboration tool, which has accelerated many companies through this time. We were less than 10 years old, and our company was born out of the cloud, which means we've chosen a lot of cloud-based technologies internally. We saw 3 stages to remote work within our global customers as well as within our own company. The first phase was to transition to our workforce effectively. The second stage was keeping our people productive and engaged. And the third was really to maintain relationships and innovation. Also, I wanted to inform the audience to look out for a poll question from Slack, so we can hear your thoughts about adjusting to remote work. If I go a little bit deeper into the 3 different stages, transitioning was we're moving to an entirely new normal, which means we had to communicate more effectively internally. We had to get laptops to people across the globe, logistically and through supply chains that were impacted by COVID. We offered stipends. We set up meeting guidelines. And we shared best practices for remote work based on even our own conversations with our customers. The second area was really about breaking down the silos within our company and really driving alignment. And we did that by enabling Slack to be that software of engagement, if you will. We brought in approvals in Slack. We can look up sales contacts easily. And we can also automate metrics so that everyone stays on top of what's happening on a daily basis. The last thing was really around, as this is a disruptive time, it is also a time for innovation. And it will allow us to emerge more resilient than before. And so focusing on innovation, we had to think differently about how we did work. So in the analytics space, we used to go into the office and we would see numbers on monitors and we post pictures in the kitchen, and we had to think differently about that. So we went into Slack for that. We created workflows to really spotlight stories. I just heard Sheila Jordon's panel talk about storytelling and bringing data and stories and creating more of a FOMO effect, the fear of missing out, like "Oh, I took this data point and I actioned it in this way". And sharing a personal story on a certain role really helped others think about how they can use data and continue to build a data culture even while we're in a remote place.

Great. Thank you. And Rashmi, maybe you could talk a little bit about how you are driving innovation and digital capabilities in your products. I know before, you had spent a little time talking about that mandate that your CEO has given the entire company. Maybe you could share that with the group here.

Absolutely. And thanks a lot, Cindy. Look, I have worked for most of the time. I think this is the youngest company, 85-year-old. I have worked for companies which are more than 100 years. So -- and digital is a panacea for companies like -- which are not born digital, right? And they want to compete, they want to be what they see their competitors are, but it's really difficult to reimagine the difference. When I worked for a very old car company or for a health care company, it was fun, right, bringing people together and make them think how do you think about going from a physical product to a digital product. What does it really mean? Here at HPE, last year's Discover, Antonio got on the stage and he announced, by 2022, we'll offer every product in our portfolio as a service. Great kind of not start for us to go achieve as a company. However, it takes a lot of transformation behind the thing. We were already on a consummative journey until we split up from HPI and that ended customers and mergers, to be able to clean up our landscape and the foundation. And here we are now, we have to kind of leapfrog to the next generation of products and services that we will offer to our customer. What it takes is really finding those people who can really build that end state of view of what do we really want to offer, looking customer in, from experience perspective, from a product perspective, and then both enabling capabilities from converting a product from physical to digital as well as all the back-office function, which spans across the organization. It was really exciting to be in IT at that time because we now need to develop all these enabling capabilities around subscription billing and conversion charging, which is not a big deal for a lot of companies which has been there and started there, but for a company which was doing a product and attached a service and here is how we do revenue and here is how we do contracts, to be able to transform in that way. And we have been on this journey almost for 8 months, 9 months now, with our network set of products, which are the harder ones, right? We were selling access point, and now we will sell network consumption at your location as well as working very closely -- the good thing that happened is that we started a transformation office, which the rule was to kind of transform the company to this next digital piece. And IT was reporting to a COO who owned both. So we had early seat at the table, early view of what's coming from a product and services perspective and how we translate it into the enabling capabilities, which will take us to the market in a way which will create the right partner, right customer experience. The other big part of role that IT and my leadership team played in that is drinking our own champagne first, right? How do we take those products that are being built and run it for our internal capabilities, before we take it out to leaders like you to say, you should be consuming this because this provides these type of capabilities. And we were our own worst critique, right? So every other day, I'm sitting down with one of the leaders talking about what else do we need in this product or why we think this set of capabilities should be done differently going forward. But the point that I want to make, and Cindy earlier started, was these kinds of transformation have to come as a mandate, top-down sometimes, right, to be able to take an 85-year-old, 90-year-old company, to think very, very differently, not only from a product perspective, but from a customer's perspective, from our internal staff as well as day-to-day processes perspective around how do we transition to that next frontier that we need to be.

I love the distinction that you made between a technology-first company and one that hasn't grown up like that. And the points you make about sort of mandate, if you will, could be applied to so many different types of organizations. Wendy, I'm curious on, in your organization, Nutanix, how has product innovation driven the frictionless engagement that you have with your clients, right? And where are you on sort of that journey to monetize and realize benefit?

Yes. Thanks. Well, first of all, I'm on the same path that Rashmi has been on. We are -- wow, 2.5 years ago, we were a company that only recognized revenue from our hardware sales. A year ago, we transitioned to only recognize software revenue. And even more recently, we transitioned to being a subscription software company. And so, of course, you can imagine the heavy lift on the back end of all those things for an IT department like Rashmi was mentioning. But along the way, also like for we have been customer number one, the first customer, drinking our own champagne, trying to figure out how do we use our own products to enable those transitions in that digital transformation. And I think, for us, the biggest transformation that enabled us during these times has been sort of the software-defined everything transformation, sort of building on that common hybrid cloud operating system, to be able to do all of our previous services that we did with a very hardware focus in software-defined ways. And one of the biggest things for us was deploying, for our core routing and switching, a software-defined network. Now maybe 3.5 months ago, one of our major data centers in Phoenix had a large outbreak of COVID, and my entire staff was affected and a lot of other folks as well. And everyone had to go home and quarantine. If you can imagine, coming from a couple of years before being a hardware company, where we had to have our hands on everything, to being able to run these large-scale data centers and even cloud operations 100% remotely with a small team, it was this sort of infrastructure's code, software-defined mantra that we had and trying to sort of push the limits of our products that allowed us to keep doing that. And we missed our guys and happy that they came back, but in the meantime, there wasn't a blip in service. And for me as a long-term IT professional, this is an absolutely different mode of operation. It's a transformation in how we think about infrastructure, how we think about operational services. And ultimately, that sort of model is needed for us to be operationally effective and cost-effective with our subscription services, right? Those services can't be overpriced. They have to be competitive. And we have to continue to operate no matter what region we're in, no matter what operational challenges we encounter as well. So it's been a time of transformation, no matter what in the company, with additional pressure and refinement happening due to this COVID crisis. And ultimately, the model and the technology holds up. But more importantly, we're able to be people-first. We're able to send people home, who needs to be home to take care of their families, and we still run. And of course, that's the magic I was hoping would happen when I got into the space long ago. This is a sort of mix of operational expertise and technical expertise that is IT. But it's great to see that playing out and to know that the model is not perfect but it works, and it's ultimately an employee-first, productivity-first model.

That's great to hear. Congratulations on not missing those fees. And welcome Bhavani. Bhavani is the CIO at Ameren. Bhavani, let me ask you a question. You're a different industry from the rest of the group, the energy industry. So I'm sure you have different challenges than the rest of this group is facing. Can you talk a little bit about that and how the technology work has changed, especially as it relates to digital capabilities and innovation?

Yes. Sure. Great to be here, Cindy. And just listening to what Wendy and Rashmi spoke, even though we're in a different industry, I think a lot of it resonates, right? So yes, I think the energy industry is going through significant change, even pre-COVID, right? If I look at just the last 3, 4 years and then I look at the next 5 to 10 years, we'll probably change more in the next 5 to 10 years than you probably had in the last 100 years. And so the grid has stayed pretty much the same for a very long period of time, in terms of how fast things are changing as it relates to connecting devices, going on to the grid, renewables, the customer expectations evolving. And so there's just -- the industry is going through just absolutely significant change. And I call it the change in the decarbonization agenda that obviously drives a lot of the renewables footprint. The decentralization, right, where we're used to centralize generation of power versus how you actually have more decentralized power generation happening, distribution happening at the edge. You think about the other D, which is demand. Demand patterns are changing. EV, chargers, electric vehicles getting on the grid. And so there's just a lot changing with respect to demand, there's a lot changing on the grid. And the biggest challenge for us is all of this gets operated through a very complex transmission distribution system, and the grid that has traditionally been very much operational technology that's been very analog, right, has really shifted to digital and continues to. So our challenges that we have from an industry perspective is: one, evolving customer expectations, so meeting our customers' energy needs, but really exceeding their expectations; providing the right products and services, the right digital customer experience. They want the same experience as they have when they go in and engage with Amazon, when they actually go in and want to check on their outage, they want to understand where -- how their energy usage is, what their choices are. So there's just the evolving expectations and the digitization that goes hand-in-hand. And then there is the complexities of the grid, which is all of this OT equipment, our transformers and certificates becoming connected assets, so IoT or the industrial IoT, right? So the data, analytics, the automation, the smart grid, the SCADA piece of it, right? A lot of how power gets stored today and will be in the future is very different from how we've traditionally done that, right, when there's an outage. So I think that's the other piece of the digitization piece to focus for us. And then as you have millions of connected assets going on to the grid, the communication infrastructure that you need to manage the volume and velocity of data that you're getting from smart meters deployed across your customer base, the devices on the grid that need real-time control, right, for voltage flow, for voltage optimization, those things just drive a different type of challenge and scale. So that's a big focus area for us. And then, of course, what keeps me up is the cyber posture, right, when you talk about critical infrastructure that -- and you have the complexity that you have with the volume and velocity of grid data, of the customer data and grid security. So these are probably what's top of mind and key aspects of our transformation. And I'll tell you, the last 6 to 9 months have obviously changed and continued to evolve. It's going to accelerate our, what I call, kind of the coworker, the employee posture, right, around digitization. It's around efficiency, productivity, giving them the anywhere, anytime mobility aspects of it. And even with the pandemic, we have 60% of our workforce that's working remotely, but we have 40% that is actually running our nuclear power plants, our energy centers out in the field, doing our infrastructure buildouts for the grid and restoring power. So how do you keep them safe and provide the right technology, right, is also a huge challenge. So I will say that the -- one of the good aspects of the pandemic for us is just the acceleration of adoption, right, has been fantastic, both for our coworkers, but also from our customers from that standpoint.

That's just awesome to hear, the constant change of customer expectations or as you so slightly put it, evolving, right, and how customer expectations are evolving and driving different business needs. I'm curious, each one of you talked about very different business models, not only just as part of this crazy pandemic cycle we're in, but really just the business evolution. What is the one relationship that each of you values the most in your organization in terms of the partnership and the alignment required to have that seat at the table and to drive that different conversation and thinking? Rashmi, do you want to maybe take that first?

Yes. So a really, really important question, right? And one of the strategic behaviors that we have in our organization, we call it connect the dots, right? So the challenge with IT is or to any technology organization is we cannot work in our own silo, right? We are sometimes who are bringing all the silos together, right? And you run all your back office and finance, so the CFO is your big stakeholder. The COO is your biggest stakeholder because you'll keep the company's supply chain running. And marketing is big with you because you are the one who is just giving technologies and data, which kind of keeps our customers connected with us going forward and all the time. So when you look at around the table, when you're the CEO of the Executive Committee and you look at each executive or the leader in the organization, there is nobody who can do any work until we did our job as technology leaders as well as if we did not connect the dots across them, right? How many of you have had marketing release the new website but did not have a customer support center and they got swamped with calls? It has happened many couple of times in my career of 30 years, right? So it's very hard to pick one. But I do see, as you say, like the COO and CFO are kind of the 2 priorities, right? One is how the company is running, how I'm getting the products and kind of what our customer needs to them through the CEO's organization. So my SLAs personally are very strict around it. I kind of prioritize those systems, those applications, which either are buying, building or managing the supply chain to get the product through the system. The CFO has dual-type role. One is because of the work we do for them, but the second one is constantly justifying because as a technology organization, we are always, if not second, the third most expensive operation in the organization, right, which is very hard to do without, but at the same time, we clash up all the time. And it's the constant partnership with the CFO. We are always having a very clear line of communications to not only say what we are spending and why we are spending, but what we will be spending or we should be spending to be able to keep the company on track and get our customers what they need. Both kind of COO and CFO relationships take a lot of effort, but we -- I always make sure that I have very strong leaders who are managing that relationship at every level to be able to give what they both need to be able to kind of keep us running and functioning smoothly in an organization.

Thank you. Stephanie, what about you?

It's a great question. I think there are a couple of folks that are really important to me at Softtek. And one is our CEO, Blanca Treviño, who is a very dynamic woman, who runs the company in a male-dominated industry. And it is so important for me to learn from her, how she handles tough situations, but also it's, for me to do my job, I need to know what she's thinking all the time. I need to understand her strategy. And I also have to inform her about what's happening in the market so that she can create a strategy that makes the most sense for us. And I think during the pandemic was a perfect example where we saw customers kind of saying -- the big thing people talked about was expediting product road maps. I have a big product road map, but all of a sudden, I have no more time. So going from 6 months to 6 weeks, how do you help clients do that? She could see that happening within our client base, and it was up to the marketing organization to kind of put that story out there so that we could help customers.

Awesome. Thank you. Wendy, thoughts?

Yes. So I would normally have said our CEO. He just announced a couple of weeks ago he's stepping down. And I think that's something that we experience. You can invest time in those C-suite relationships, but ultimately, those things change. I would say, other than that, they say imitation is the sincerest form of flattery. And there's a couple of organizations that have been hardest on us in IT. We collect NPS scores on all of our interactions. And our customer support organization also does that with external customers. And so they have been detailed in their feedback. They hold us to a very high standard as well our customer success organization, the ones who enable our customers, once they've purchased our product, to use it successfully. They have been really, really hard on us as well. And so, ultimately, I have been learning from their customer-facing skill set and the tools and tricks and tips they use, but also just kind of seeing how they show up, seeing the humility that they have and the hunger for improvement. And ultimately, that's led to a lot of different groups internally, HR, facilities, the legal team, the sales and sales enablement, engineering teams, have reached out to us and said, it was, literally, we had about a dozen groups reach out and say, could you run this operational process for us, it's not exactly technical, but could you run it for us anyway because we like how you transparently operate. And so, ultimately, that's the sort of partnership we're hoping for. But it happened accidentally by sort of imitating the ones who were doing a good job with that.

Awesome. Thank you. Well, I know we're out of time. I see Hunter has come to give us the proverbial look. I would just encourage all of you out there to think about the relationships you have in the organization. And as the group here has talked about today, it's key to driving innovation in your business model and in your products and services. So give that some thought and be purposeful about those relationships. I want to thank everybody on this channel very much for your insights today. It was a pleasure joining you all.

Hey, Cindy. Thank you so much. Great job, ladies, April, Wendy, Bhavani. Great to see you, Rashmi. Stephanie, awesome. Great, great job. Thank you so much.

Thank you.

Thank you.