Spotlight On Podcast
Spotlight On Podcast
Spotlight On with Atul Aggarwal and Andy Burgess, Accordion Partners
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
Private equity is facing a reality check: with a volatile market and modest growth no longer guaranteeing big exits, value creation plans are more critical than ever.
In this episode of Spotlight On, Nicholas Barton sits down with Accordion’s Atul Aggarwal and Andy Burgess about what this means for PE firms and CFOs.
Atul and Andy explore the realities of expanding a US consulting firm into the mature London market. We cover the common pitfalls, like forcing a US playbook on the UK, assuming global brand recognition translates instantly, failing to put senior talent on the ground, and why patience and local adaptation are non-negotiable.
Finally, Atul and Andy dive into the expanding role of the modern PE CFO, who must now balance governance, operational drive, and cash management with tech strategy. We look at practical AI use cases, from 13-week cash forecasting to working capital analytics, and explore how agentic workflows are turning CFOs into strategic orchestrators.
If you are navigating PE value creation, finance transformation, or AI strategy, this conversation is for you.
Welcome And Today’s Focus
SPEAKER_03Welcome to Spotlight On, the Must Listen podcast series where visionary leaders, global executives, trailblazing entrepreneurs, and top-tier experts come together to share their inspiring stories and tackle the hottest issues facing businesses today. Brought to you by the Barton Partnership, an award-winning global talent solution organization, we specialise in executive search, independent consulting, and consulting solutions from stretching through to execution. Our mission to help businesses accelerate their growth by connecting them with world-class strategy and transformation talent. Tune in and join us as we shine a spotlight on the game changers and thought leaders who are shaping the future of business. Welcome to Spotlight On. The next edition of the podcast series by the Barton Partnership. Again, my name is Nick Barton. It's good to see you all. Thank you for joining us again today. Got a great lineup for you today. Two for the price of one, I'm pleased to say. We've got a double hatter here. And this one's going to be really interesting because I'm excited about this. We're looking at this from two perspectives today. Firstly, from the perspective of a US consulting firm building out its proposition in London in a European market, which is exciting. And secondly, obviously focused on the private equity community, really from the point of view of finance directors and looking at the CFO, the role of the CFO and the value creation opportunity within private equity right now. But let me introduce you to our Steam guests because we've got two great guys here today, and I'm big fans of both of them. Atalagarall. Yep. Andy Burgess. Cordian. Welcome. Welcome to the podcast series, the spotlight on series. Let's just start with you two guys first. Tell me a bit about yourselves, tell the audience a bit about yourselves, and then we'll get into the conversation.
SPEAKER_01Yeah,
Meet The Guests And Their Paths
SPEAKER_01thanks for the opportunity, Nick. We're really hyped to be here. Yeah, grew up in London. Grew up in the outskirts of London, Harrow. Did my education here, did four or five years here in the London market working at Bain and Company and a couple of other small consulting firms. Went to the US to do my MBA at Wharton. And then as of 2004, I've been in the US, spent 20 years in total in Bain and Company, and then joined a firm called Accordium, and then we can talk more about the private equity-backed firm supporting CFOs and private equity in 2019. At the time we were 60 people, we're now 1,500 people, so we've gone through quite a nice scaling journey. Wow. Happy to talk all about that. Wow.
SPEAKER_03And you joined at 15 when it was 15, or was that when did you join?
SPEAKER_01I joined in 2019 and we were 60 people then. Wow. And now we are 1,500 people globally, organic and inorganic. It's been a real great ride.
SPEAKER_04Yeah.
SPEAKER_01And we are also private equity backed, second time private equity hold as well. So we've got a lot to talk about there too. Yeah, let's do that. Thank you.
SPEAKER_00Andy. Hello. Hello. Andy Burgess. Um so I'm a boy from Stoke on Trent. Um professionally I'm an ex big four partner at the uh I now lead the London Office for Accordion, which I'm very, very excited about. Personally, I as I say I grew up in Stoke on Trent, so I'm a the trustee of the Port Vale Charitable Foundation. Well done. Which is how I keep myself grounded around the world of finance, thinking about lower league football. But um look, this has been a journey that's been incredibly exciting, so really looking forward to talking about it.
SPEAKER_03And how is Port Vale doing, just let's not let's not talk about Port Vale. We want to keep it a positive conversation, let's not talk about Port Vale. Okay,
Scaling Accordion And Timing Europe
SPEAKER_03let's start with accordion, because I'm really excited to hear about this journey. I mean, it you've been there obviously almost near the start, but you know, 60 people to 1,500 people. Yeah. Amazing story. Tell me, what when you're thinking about sort of a a US consulting model and how it enters a mature market like the UK, the consulting market. I mean, obviously uh Andy grew up in Big Ford, yeah. Uh Europe, Bane. Yeah. How has that journey been? I mean, when you think about you know its rise in the UK and its problems in the UK. What what have been sort of um some of the challenges in that regard and and and you know entering a mature market? How how has Accordion overcome that?
SPEAKER_01Yeah, it's a listen, the great question. Obviously, as I said, we're private equity backed, so international expansion is something that is a real growth factor for us, but we were very thoughtful about doing it at the right time. We actually debated doing this in 2019 when we got first-time private equity backing by FFL partners and decided not to join then, not to enter exit then, um sorry, enter Europe then.
SPEAKER_04Yeah.
SPEAKER_01Reason being, even though the market even then was quite big, focus matters. Right. And as a private equity portfolio company, it was very important. We had a huge TAM in the US that we need to conquer at the time. Okay. As I said, we were 60 people and we've gone to 1,500 now. Yeah. So we really made a tough decision, actually, in many ways, for a very growth-oriented company to say, park hit the brakes on entering London back in 2019, focus on the US and do it when the time is right. Yeah. Time is right was defined as a couple of years uh from now. So 2024, we decided to enter and do it right.
SPEAKER_03That's really sensible though, isn't it? I mean, rather than sort of take the plunge, especially with private equity back in, I'd imagine there was an element of pressure to really accelerate growth, et cetera.
SPEAKER_01Yeah. Was it quite a tough call at the time? Yeah, look, it was and I credit my founder, Nick Leppard, who founded the firm, who's got incredible strategic vision and is very laser focused as well. We had three growth vectors that we really identified at the beginning of that hold, Nick, in 2019. One, uh so we were our core market is US private equity, and the TAM is huge. So if you think about reading the CDD report on the market, it's like you can totally win and grow by conquering the TAM in the US. However, one growth vector could have been going internationally, another growth vector could have been going into corporate versus PE, which is somewhat different. Yeah. And another one could have been going outside the office of the CFO. We'll talk more about it, but office of the CFO is where we're very laser focused. Yeah. And to Nick's credit, um, you know, we made that tough decision to say, let's just focus on the TAM that is here in the US and not get distracted. And I think the results speak for themselves. By the way, we exited almost a 5X MOIC within three and a half years. So our first investors are very happy. A lot of that growth came from just focusing on relentlessly on US private equity and all the three of those growth vectors. We made that tough strategic call to say, let's not get distracted. Yeah. Let's do it the right time when we have the operational and organizational capacity to do it right. Right. So that's why we did it two years ago.
SPEAKER_03So that's where you that's where you got it right. You were laser focused rather than sort of spreading yourself, yeah, looting the proposition. Where have
Common Mistakes Entering The UK
SPEAKER_03where have mistakes happened though? What what are mistakes that I guess not just accordion but any firm enter in the UK market could make?
SPEAKER_01Yeah, great question. So um part of doing it right is to really understand what other firms have done when they've done it well and what mistakes they made. So we did take some quite quite a lot of time to think about that and talk to friends in the industry who have done it. I think there were three or four things we learned, all of which were quite big insights. Yeah. The first is US firms oftentimes don't actually tailor their value proposition to the local market. So in Europe, bill rates are lower, projects are typically smaller, but it's still a really attractive market. If you bring the US playbook and think that that's gonna work in Europe, it ain't. Yeah. Right? And there can be some arrogance around like it's gonna it's gonna work regardless because we've been so successful. So that's mistake one. Mistake two, buy versus build. Really interesting. Um, one of my friends when we were entering said, do not we were talking to lots of bankers about potentially doing something through acquisition, and we uh one of our friends who's a client said do not do it through acquisition. Why? Yeah, because if you acquire the KPMG EUI spin-off, you're essentially a KPMG UI me too. Yeah. Right. And the goal here, and we'll get onto that, is to be differentiated and so do it organically and then potentially do MA at the right time. Okay. Third one was around don't bring a knife to a gunfight. We have seen US firms come into Europe and say they have a scale platform in Europe because Europe is different. Right. But actually they've got two men and a dog. Right? Like and the and the first thing clients ask is like, how big is your local team? Yeah. It's the right question. Right. And so we, and again, credit to Nick and the board, it was like, no, we sent over, and we can talk more about this, we sent over five senior people under my leadership from day one. Right. There's an expense to the US, right? Losing some of our biggest ring makers to come to Europe. But we knew that we had to do it right and enter it through a scale platform initially. Really interesting. Um, and that's where a lot of people make a mistake. And then the final one was the myth of the global clients. Yeah. US firms who have a big book of business in the US think, oh, our US clients are saying that they want to use this in Europe. Done. Actually, what it is is US clients will talk to their European colleagues, let's say an operating partner at a mega fund, right? Yes. To make recommendations. You got it. Yeah. They make the this lead gen. They'll make the recommendation, but then the European operating partner, you're still starting from zero out of ten or maybe one out of ten in trust building with that person. You can really, a mistake is to say, I'm no-brainer, we'll just sell to our US clients. They'll just give you the intros, you've got to prove yourself to the local European clients. So those are some of them.
SPEAKER_03It's almost like they're franchise businesses. And I have to say, I mean, I completely identify what you're saying. You could almost reverse that when you're thinking about expanding into the US, right? Culturally, you can't take the UK playback into the US. Yeah. And you can't expect any UK businesses that you're doing business here to suddenly open up the door for the US and naturally expect that business to open as well. So it's interesting that that that reversal as well, isn't it?
SPEAKER_01Yeah, I think all you nailed, I think all four of those points apply both ways. Yeah. And I think just being conscious of it should go both into the diligence of whether you actually have a right to go into that market and if so, how you go into it.
SPEAKER_03Yeah. Now you touched upon one of the things, and I want to come on to you, Andy, because I think this is obviously one of the key reasons why you joined is the laser focus around private equity. Yeah. Right. And not diluting. Because in theory, you could do this in all sectors and industries in terms of the nature of the consulting work you do. Um, just talk about that, I guess, in terms of the advantages of being sort of PE focused and how that's accelerated growth.
SPEAKER_01Yeah, that's a great point. Maybe in a second, Andy, maybe you could address that directly. But just I would just frame it to your point, Nick, about we only focus on private equity clients, portfolio companies typically, and we are also PE backed. And so in our DNA is private equity, private equity, private equity. And I think that has been a source of a key source of differentiation for us. Yeah.
SPEAKER_00Yeah, I I I totally agree. I mean, it the word DNA really resonates. So I am an ex-CFO in the world of private equity. Right. We've made other senior hires in this space who have been both uh CFOs in the space, they've been operating partners within that private equity space. Yeah. So we've got full empathy and full understanding of the challenge and the things that are driving the market forward.
SPEAKER_04Right.
SPEAKER_00And every client I speak to can see that we are laser focused, understand it, and can have the conversation in their language as you're having that conversation. Yeah. And I think a lot of firms, when you talk about people getting it wrong, I think there is a real misconception that you can take corporate consulting and apply it to the world of private equity, and the answer is that you can't.
SPEAKER_03Yeah. Yeah. And when you think about sort of again the DNA of most consulting firms, it's individuals that have come straight out of university and learnt the playbook, etc. But you've walked the walk and taught the talk, as it were. And so you can add that aspect of understanding. Is that what brought you to Accordion? I mean, just talk about that, I guess. What was what was the opportunity for you?
SPEAKER_00Yeah, I mean, it's um I I was looking for something which was really entrepreneurial at the time. I've always had that in me. It's always been something I like to build things and I like to take it and and really accelerate it through a through a growth story. And the environment in the big four is great and people can have great careers there, but there is a difficulty in being able to accelerate that growth and take the investment and really push on.
SPEAKER_04Right.
SPEAKER_00And it's all cuedos and credit to Atl. And I'm not just saying that because it sat here, but the promises that were made will put some investment behind you. You can go and make the market in this country. Yeah. And I and I believe that's what Accordion is doing. We I talk to the team all the time that we are making this market to a level of focus on CFOs in private equity that I don't think exists anywhere else. Interesting. Um Atoll talk numbers at the beginning of this. That the growth that has been through our London practice, where we've got plans to get to, demonstrates that the firm in the US is willing to back us to do that. And it's it's it's been it's been a joy.
SPEAKER_03And what what type of profiles would thrive in this environment? I mean, what sort of people do you sort of look to bring on board now with because it is a distinction. It's a it's a different type of consulting in that regard. So what kind of works for you?
SPEAKER_00Yeah, I mean it's the word entrepreneurial really jumps out. I said it before, we we need people who are looking for a challenge like this. Yeah. It's hard work, but it's a good, honest day's hard work where my wife tells me now I'm more energized than I've ever been, even though I'm working harder than I have for a very long time. But I love doing that. It's the type of person that I am. Yeah. Um we need people who are flexible, who can adapt, who are comfortable in ambiguity, who can take the reins of a big, meaty challenge like this and throw themselves at it.
SPEAKER_03And without putting you on the spot, I guess, because I I would consider myself an entrepreneur, how do you test for entrepreneurialism in the consulting? What do you what does a quality of an entrepreneur quality look like, as it were?
SPEAKER_00Yeah, I mean, w we do it a lot when we're we're interviewing people, and I think you can pretty quickly pick on it when you ask people like, look, if you were in our business, what would you want to do in the first hundred days, first year, what do you want it to be? And you'll have some people be like, you know, learn how you do things and then come in and learn the ropes and you know, do a few projects. But you will find people who are like, Well, I would take this part of your practice and I would adapt it and I would change it and I would grow it.
SPEAKER_04Right.
SPEAKER_00And this is how I think about it. Now, it might not be where we want to take it, it might be that we want some of it or not others, but that thought process of I want to make a difference. Yeah. I want to own a part of it. Yeah.
SPEAKER_03I I think is is what really just And it's almost you can see the glint in their eye. Yeah. Right. There's something that sort of lights up. They're not just reading something off. It's sort of this is they they feel it as part for everything else. And it's the vision around that as well, right? 100%. Yeah. Interesting. And
Building The London Team And Culture
SPEAKER_03again, when you think about the opportunity going forward now, what does that look like? What does a journey for according look like over the next three to five years? I mean, what what sort of journey are you on right now?
SPEAKER_01Yeah, yeah. So um from Europe's standpoint or over. Yeah, yeah. Yeah, from a Europe's standpoint. So we're growing gangbusters here. Yeah. And what I want to emphasize, I think you see the book Founders Mentality Behind Me. Um I learnt a lot from Jimmy Allen at Bain about healthy growth. What is healthy growth? Healthy growth is not just growing the revenue line, but growing it in a way that can scale in a sustainable way. Yeah. And a big part of that is a good talent value proposition that can r remain strong and healthy from an employee standpoint. So one of the I think the market and the TAM is so big that we are going to continue to be very laser-focused on serving CFOs in private equity. Yeah. One adjacency that we have gone into in a big way is data analytics and AI. We actually acquired a 800-person data analytics AI platform. Right. We've actually done more acquisitions, including an AI lab in San Francisco, but we've acquired a lot of data analytics and AI capability. Why? Because CFOs now, and we could talk much more about this, are the owners of data and oftentimes the owners of technology in mid-market private equity portfolio companies and need to underwrite AI investments. So strategically the answer to the question is we're evolving from purely focused on CFOs and the finance function into a much broader. Much broader, but still with CFOs as the anchor. In Europe, it's very, very important for us to continue to hire the best. Yeah. And as you know, because you're helping us with this, talent is going to be a rate limiting factor in our growth. It's not going to be the market. Yeah. So having the right people in the U.S. Yeah. And then look, it's it's it's really hard. I mean, you know, I I I have spouted for many years, because you know, as president in the US for many years, like hiring lots of people, like say no more than you say yes. Yeah. Such easy words to come out of an operator's mouth. Yeah. But when it means that you grow at, you know, we're gonna grow at like 60% or whatever, like it means that you're gonna grow at 50% versus 70%. Yeah. It's costing you dollars. I get that. Right? Yeah. But I'm, you know, this week Andy and I have met many candidates, and like honestly, like we're pushing ourselves to say no more than yes to like a bunch of them who are really good, but they're not A plus. Now, you could ask me why do we need A plus talent? We need A plus talent because we are new in the market, making a market. And if our clients say, Well, you just hired the same people we got at Pick Your Competitor, there's no difference. There's no difference. Yeah, okay. So we need Andy and some of the other leaders who know the market and yourself to say, if this person is on the WhatsApp groups amongst all the operating partners, and they say, Wow, yeah, you guys got Jake or Molly. I mean, it's the endorsement, isn't it? And that's what's happening. Yeah. That's what's happening. Some of the PE clients you and I share have said, Oh my gosh, you picked up so and so. Yeah. That's probably 50% of the people we've hired, we've got an inbound from I'm not kidding, from a sponsor saying you got that person. Yeah. And that's the rate limiting factor on our growth. So the answer is we're very focused on our strategy. We know what a strategy is, but it's about operationally scaling in a way that we continue to be 10 to 20% better than anybody else in the market. And there are some incumbents, some some insurgents also who are coming off this space because it's a lucrative space. Yeah. And so it means that we need to continue to be out ahead. Well, and listen, competition is good.
SPEAKER_00I I think it's interesting because I absolutely agree with all of that. But from my role as the London office lead, I've got to think about this is what are we going to create in Europe? And the answer, of course, we're going to create a huge business that does all this amazing work for our clients. But I'm trying to create here a platform for people to come and have an amazing career. And I've got to put that layer on top of it as well.
SPEAKER_02Of course.
SPEAKER_00Um and I I love the point that you make, Atl. We are getting so many inbounds now that it's it's crazy that CVs are coming across the desk, which is great. But we gen we have a phrase which is there's a better way to work in finance. And that's what we're trying to generate here. So I want people to come and have this amazing growth story. I want people to come and do this amazing work with big private equity clients, but I want them to love doing it as well. Yeah. I think that also comes back to your point earlier around how do you get the right people. Yeah. The buzz in our office when you walk in gets commented on by every client that walks into our office. Yeah. These people love being here, don't they? Yeah.
SPEAKER_03And that's a palpable feeling as well, actually. And you want to again, you don't want to lose that at all. The challenge with that is as you scale, how do you maintain it? And listen, you know, as a as an individual that's gone from five to a hundred people, obviously on a slight, that is a challenge. Let's talk
CFO-Led Value Creation Gets Harder
SPEAKER_03about private equity. Let's talk about value creation. Because value creation, in terms of definition of, has massively evolved again over probably even over the last 18 months, let alone the last five years. You know, value creation until I guess the last few years has been all about strategy, you know, the strategy behind it. But actually, now the importance and the emergence of not only chief transformation officers, but perhaps more importantly now the CFO in value creation has really come through. Um, talk about how and why that's fundamentally changed. Why has the CFO now risen in terms of its prominence in value creation and that link between, as Atoll mentioned now, CFO and AI?
SPEAKER_00Yeah, I mean, uh fundamentally, if you go even more macro than that, the the world of private equity has changed a little bit. Like it's never liked big macro factors and unstability. And we're in a place where the variables are through the roof at the moment. There's tariffs, there's huge things happening in the macro world, there's um there's big variability around supply chains, there's interest rates that are really making it tough and difficult. So um put that in a position uh Attil, you mentioned Bain, you know, they talk about now being 12 is the new five. And what that means is where five percent E-bit dog growth would have got you the multiple you wanted at the end of your hold, now you're gonna need 12. Yeah. So I I said to someone the other day, I I think the sound that represents the private equity market in London at the moment is value creation plans being dusted off.
SPEAKER_04Yeah.
SPEAKER_00Right? People are pulling them out of the drawer, dusting them off. And how do we generate the real value in this business anymore?
SPEAKER_04Right.
SPEAKER_00It can no longer just be a bit of financial restructuring. It's got to be operational fixing the business and making real palpable change through value creation plans.
SPEAKER_04Right.
SPEAKER_00And that's hard. Yeah. And the role of a CFO is hard and it's difficult. And it's hard and difficult in the world of private equity. And then AI sits on top of that as well. So how do you as a CFO sit there and say, I've got this challenge to run my business, business as usual? I've got a value creation plan that I need to make sure works so that this business, my Al Ps, the GPs are not putting too much pressure on me. And I've got to change the world with an AI system as well.
SPEAKER_03Yeah.
SPEAKER_00It's a fascinating challenge right now.
SPEAKER_03And does that I mean to be clear, does that sit solely all of those three aspects with the CFO? Is the CFO part of a team that provides that support? Because you would argue there's an operating partner sitting somewhere, there's a chief transformation officer within that within that i you know ecosystem as well. What why is there so much pressure now on the CFO, perhaps more than anyone else? Or or is it evenly spread in your view?
SPEAKER_00I thought it'd be interesting in your view. Mine is the pressure has always been on the CFO. Right. This is no different. It's just I think the pressure is larger. But the cynical side of me says that the CFO has always been someone you can look at in an environment like this and say, is this the right person? Is that an easy change for us to make? Yeah. And yes, there is a team. I totally agree with you that operating partner and CEO and CFO. But this world of AI, this world of incumbent change will always come across the desk of the CFO. Okay. And it will always hold the ROI for the business. Is this the right thing for us to do? Can we make money off it? Can we be more efficient? And that's why I think right now it's become palpable that there is a big challenge for CFOs in the market.
SPEAKER_03Is there is there I mean, is there a I want to say a shortage, but it's not easy to find a good CFO with pure private equity experience, right? There's CFOs with big corporate experience, but CFOs with private equity experience, is that an it's not an anomaly? Is that are they readily available in the market?
SPEAKER_01No, look, I think I I think a lot of our clients are having to hire first time CFOs in private equity. And therefore the question is do you do a battlefield promotion of somebody who's risen up the ranks head of FPA or a controller? Or do you bring in a form of Corporate C CFO, um, or do you are you lucky enough to find uh somebody who's a second or third time private equity CFO?
SPEAKER_04Yeah.
SPEAKER_01Or sometimes the finance operating partners sub in uh into a CFO role. So there's a um but I think underlying your question is is there value in having seen the movie before? And the answer is yes, yes, yes, yes, yes. Right. If you think about and look at the data on um attrition rates, you know, exit rates for CFOs you know, 12 months into their hold, you know, there's various different studies, but it could be between 30 and 40 percent. Right. You know, and so why is that? It's like it's a it's a pretty grueling role. Yeah. Right? They're going face to face against some investors, even in good times. Right. How many years did we have where it was a bull market in private equity? Right. Now it's tough times. Yeah. Right. So all of the traditional stuff they had to do around essentially managing the business with the CEO remains. But now they need to be fluent on the balance sheet uh because they have to manage for cash as well as eBITDAR. Yeah. Now they need to be very strategic about the investments and think about where they can be best in cost versus best in class. It's a just much more challenging environment. And for that CFO, they're not even sure what their equity is going to be worth.
SPEAKER_03Right. So it's quite so they're working without necessarily knowing what the finish line is.
SPEAKER_01And they need to they're a leader, so they need to also be portraying conviction. So listen, lots of great CFOs we know in private equity are strong enough to withstand like the additional challenges that have come on, but it certainly is a challenge, and to your point, the economics for them may not may or may not hold. So yeah, as a result, a lot of CFOs have done one or two tours of duty in private equity and don't necessarily want to do it. We spend a lot of time with first-time CFOs in private equity, as you know, uh helping them to actually three months before they do their first P uh PE gig, helping them to, like Andy's done a PE gig, like coaching them on how to be PE CFOs, because it is very different. The rigor of rigor around the numbers is very different. Yeah. They often own uh the technology environment and the data environment because that all rolls up into a mid-market CFO on like a big corporate. Yeah. They also have to think about exit from day one and like take a value creation lens on the numbers, not just a management accounting lens on the numbers. Right. So there's a whole plethora of things that a CFO in private equity needs to do that a corporate CFO does not need to do. Yeah. And I think for clients of ours who have finance operating partners, many do, those finance operating partners can really help CFOs to understand how to be successful and provide that guidance. But a lot of funds don't have those people, or those people are stretched way too thin. So a lot of what we do is try and equip CFOs to be successful in a private equity environment.
SPEAKER_03Aaron Ross Powell And you've I mean between the two of you, you've listed a whole host of prohibitions as to why value creation has become harder. Yep. What else is there that's really having an impact on, I guess, CFOs really driving their role or the whole value creation concept right now? Why has it become harder?
SPEAKER_01Yeah. I mean, look, I think it first of all, it starts with the business itself. So fundamentally, the business is facing all of the macro uncertainty and disruption, both on the macro uncertainty but also the underlying economics of the business are more challenged, right? Um secondly, I think motivating a team of private equity executives when your equity's underwater is really challenging. Uh sponsors are much more stressed right now. Yeah. And you know, part of the dialogue nick now is will we exit versus you know, with continuous vehicles and stuff, like will we exit and how long is it going to take us to exit versus what do we need to do in the next couple of years to exit, right? So those are some of the other things that are just making their role a lot harder. The other thing I would say is honestly, just back to the AI topic. You know, there's AI for value creation across the portfolio company, and then there's AI within the finance function. But if we take the first one, AI for value creation across the portfolio company, that necessarily requires investment that doesn't necessarily pay back immediately. Yeah. Certainly necessarily within the timeframe that they're so what does that do to our margins? Are those investments addbacks? What does it do to our exit timing? And so the CFO, on the one hand, is under pressure to keep hitting the numbers that have been underwritten and on the growth rates that are underwritten. On the other hand, put enough aside to invest in the engine two for the future. Trevor Burrus, Jr.
SPEAKER_03But presumably that how will have whilst that would have perhaps a negative effect on the e-bit, it would have a positive effect on the multiple because of the forward planning? Presumably.
SPEAKER_01In theory. Presumably. But again, um so you're right. Let's say let's say a business needs to invest for a couple of years, like three, four percent of revenue in AI investance, right? Their e-bit dial will go down, but to your point it will return in the multiples if you believe that that you're gonna exit and you exit for a higher multiple. Right. Now I think it i it's hard to generalize, but sector by sector, I think we're moving much more to winners and losers. There's gonna be uh some players in any industry, take our business services, the place where we play, where if you've really embraced AI in your own core value proposition, you'll be one of the few business services players who is gonna uh command a 1520x multiple, and then be others who will not command, not exit or will exit for a very low multiple. I understand. And so um so yes, those investments should pay off, but it's not certain that they'll pay off because it requires you to believe that you're gonna be a winner in the industry. Um so that's a lot of the challenges that are completely new challenges to the CFO in addition to their day jobs.
AI In Finance Practical Use Cases
SPEAKER_01Yeah.
SPEAKER_03And let's talk about the AI piece, especially within the finance function. How has that evolved? I mean, what are you seeing in that regard?
SPEAKER_00I mean, look, it's here.
SPEAKER_03Right.
SPEAKER_00Right? It's the the question is AI coming into the finance function is is done, right? It's here, uh, it's out there. I I absolutely agree with your point. It it's become table stakes now. And um I think there's a real um there's a real view that people are out there, which is I want to make this step into AI. I want to take the first step, it's a big mountain to climb. Yeah. How do I do that? Right. And technology is no longer the blocker to that. The tech's there. Yeah. It's so the only blockers are either your own ability or willingness to take the brave step to go and do it, or it is the governance and controls and and how do I get comfortable with that that sits within your your finance function. Um I think it was said really well. Um Paul Redding, who is is a colleague of ours, did did a talk the other day. Uh and from a CFO to really demonstrate the challenge of that. As I said earlier, they've got business as usual, you've got to get AI on top of it. Um he said that um in the world of a finance function in private equity, AI is two things. One is a game changer, right? It is absolutely going to change the game. Yeah. But two, it is an indication to the market right now that your finance function is run really well. Because for AI to work and for AI to really deliver the value, your data stack has to be right. You have to understand the value drivers of your business, you have to know exactly what you're going to go after to grow your market. Yeah. And if you can be the people who are first out there in market saying we've put some AI across our finance function, I think there's a lot of ops partners out there at the moment going, well, they must have their stuff in order.
SPEAKER_03And to be clear, and I say this from a point of naivety rather than anything else, we're talking about AI's creating efficiency, a greater depth of analysis, speed of analysis. What are the actual what what are you know other practical use cases where AI is being adopted and what value is it creating for finance functions that you're seeing? Yeah.
SPEAKER_01Should I take that one, Andy? Yeah. Yeah. So uh let's get really specific here now. Let's dive into some of the details. Okay. So um two years ago, I'll give you a bit of a time, like a historic history of this, right? So um two years ago, we were talking to CFOs and saying, just do one thing in AI and finance. So specifically, what could that look like? That looked like using AI to do 13-week cash flow modeling.
SPEAKER_02Okay.
SPEAKER_01Using AI to inhale all the data for a working capital diagnostic project, the AR, AP data, et cetera, in a much more efficient way than it's today, right? Um It could be using AI as part of a close acceleration project. Those are the types of specific finance processes which lend themselves to AI. And guess what CFOs in the last couple of years have said? Where's the ROI on that? And our answer was well, it's new guys and it's innovation.
SPEAKER_04Yeah.
SPEAKER_01So please don't bring CFO grade ROI requests to this. Please just just try something and recognize that it may or may not work. And the CFOs in general, this was a couple of years ago, said no thank you. Interesting. I need to demonstrate to the rest of the organization that I'm very cost conscious. I'm not gonna take some flyers. Right. Yeah. So we had a lot of conversation the last couple of years without a lot of actual action with CFOs on AI. That's the God's honest truth. To Andy's point, now the dam is broken. It's broken for a few reasons. One, a lot of the tech stack to his point, NetSuite, Salesforce, some of the classic aspects of tech stack that most private companies have, they have AI features embedded within there. You're a CFO, instead of talking to some random provider of AI and cash flow forecasting that you may or may not trust, and if they mess it up, you've got a cash flow model that doesn't work, and you've got egg on your face in front of the board. Yeah. Tried and tested AI features within Salesforce, Agent Force, et cetera, or or um or Net Suite, no brainer, go there. Secondly, the biggest thing that we're doing right now, biggest product we have right now, solution over right now, in data analytics and AI, is the data environment. Yeah. To Andy's point. Everybody, data platform. Why? Number one, because everyone needs clean data, but number two, enabler of AI use cases down the road. Okay. Nobody wants to, in six months from now, like the commercial machine, like the head of go to market, the commercial officer says, we've got this amazing new AI technology that we want to adopt. Ooh, the data's not clean enough, not good enough. So data platform work is like flying off the shelves right now as an enabler of AI. So those are some practical use cases. The other quick thing I'd say is where the industry is evolving, both in finance function and more broadly, is agentic workflows. Okay. So at some point, the clo the what just think very simplistically, no jargon. The what a 30-person finance function, the work that's being done by lots of human beings with of those 30 people, that over time can be done by agents. And the CFO's role becomes more of an orchestrator of those agents and human beings. Yeah. Almost like an orchestra conductor for agents and human beings. So there's an argument to be made. We'll have fewer, still have finance functions, but fewer humans, humans plus agents, and the role of the CFO will change significantly. So that is both like any function that's facing AI, that's a little bit scary because obviously it implies a bit of a shifting of the workforce. But if we can't talk about it openly, then like we can't drive change. So that's probably where the future is. And so CFOs are now understanding that. And to Andy's point, recognize they can't go to market in a year or two without an answer to that question and perhaps some trial and some specific operational KPIs. Yes. On how many agentic workflow projects have you had? How many classic CFO projects have AI embedded within them? They need to show those KPIs.
SPEAKER_03And are those the standard KPIs that you would look at to bench out someone who is adopting K you know?
SPEAKER_01It's a work in progress, but what I'd say is on the revenue side, um uh number of projects, for us anyway, number of projects which have AI embedded within the CFO solution. It's one KPI. Yeah. One that's going to increasingly be important is how many of our projects have agentic workflow redesign as part of the deliverable. And as we move in that direction, of course, the the whole managed services support model will evolve as well. Okay. And the economics will evolve as well. So yeah, those are some of the KPIs that will evolve.
SPEAKER_00I think it's really important, yeah, that um because that is the big exciting future. And you could be a CFO looking now and saying, actually, that's quite scary, but I want to make the start, I want to start climbing that mountain. So we think about it at Accordion in a three-step model here. So as Attil said, within your tech stack right now, there will be some AI built in that I guarantee you are not using to the full capability that it that exists.
SPEAKER_04Yeah.
SPEAKER_00So that's step one. Step two is if you it the agentic thing is too much right now, or you need a bit of time, there are some amazing point solutions out there that can help you with your AP, could help you with some 13-week cash flow, could help you with an accelerated close, that you can go and get on a license agreement that will do that work for you.
SPEAKER_04Right.
SPEAKER_00And then you get to the nirvana of right, how do I then build the agentic work in that once you've started to settle data down into that position?
SPEAKER_03Really interesting. Really interesting. And uh listen, I strongly suspect if we sat here in a 12-month time, you'd be saying slightly different things around how that because of the evolution and the speed of change that's going on right now. When
The Future PE CFO Profile
SPEAKER_03do you think about the CFO profile though? When you talk about sort of the individual and right now, to your point, it's an evolution. You know, people are transitioning from corporate into product C or stepping people up. What does a modern P-back CFO need to look like now to be successful? I mean, Andy, what do you think on that?
SPEAKER_00Yeah, I it it's it's really interesting because the the table stakes of governance and control I don't think will ever go away. I think it will look different in an AI world. How do you put governance and control through an AI agentic model? But the role of the CFO, the governance and control table stakes of value protection will always be there. So that will be an adapting part of the role. I then think this data and AI point will move the needle so much that it will become how do you become an influencer in that space and how do you go from a position of being someone whose role it was to interpret data and figure out the best path forward to being someone who is told the best path forward with perfect data, where an AI world will say, you've got four options. These are what those options look like. Right. Right? That used to be your job to try and figure out what the navigation looks like and where you want to go. Yeah. And I think it becomes more of an influencer within the organization, a bringer along of people and markets and shareholders and operating partners around here's all the data, here's what it's told me, this is the way I want to go and why. So I think it's becoming it will become a bit more of an influencing role. Trevor Burrus, Jr. It's always been influencing, but it will have to influence people's emotions and thoughts to help them come along on a journey.
SPEAKER_02Aaron Powell Interesting. Yeah.
SPEAKER_01Anything to add? Well, I I look, we've been talking for years about what we call strategic CFO, and this is a well-trudent true uh sort of discussion, but it's very valid, right? Because there's the basic blocking and tackling of the CFO role, and then there's being the strategic right-hand person to the CEO and the board on value creation, right? Simply put. That's always been there, right? But it's increased over time in importance, and a lot of CFOs do it, and there's a lot of CFOs don't do it. And all I think is in a world of perfect information, it's well put, Andy. I mean, by the way, it's perfect information that CFO has, but also it's perfect information that your sponsors have as well. You're going to board meetings and your sponsor has all your performance data, right? So you can't go to the CFO. Let me tell you, we grew it at 12%. This is why like your 30-year-old deal VP is probably more steeped in the details of that data from that data lake than even the CFO is. So you better be ready to offer insight. And so I think the um the CFO needs to continue to be that strategic CFO, identifying and uh value creation opportunities beyond what anybody else can look at the data because they know the business. Yeah. And then I think pushing the businesses to drive decision making. Like to me, the number one currency or value creation opportunity for CFOs is putting data in the hands of the business unit leaders quicker than your competitors. Right. If your business unit leads in a healthcare company, like RD, farm a pharma company, can get data on trials quicker than your competitors. Yeah. That's game changing. Game changing. Yeah. Right. If in our business we can get data on productivity of our people, utilization rates of our people quickly, we can make quick decisions on who we pay, who we staff on different things, like we don't have trapped labor. And and and it's industry specific. But CFOs putting that data in the hands, with insight ideally, in the hands of business people, is how value creation is going to get driven. It always has been. Yeah. And AI is just going to be like able to do that at lightning speed. We call that CFO intelligence. Yeah. That's the table stakes. And a CFO, I mean, a CFO who's not really technologically fluent is going to find that really challenging because a lot of the data that they need to interpret and then feed to the business is going to come from those technology tools and solutions. So they need to, they really gonna have to. I've got to lean in.
SPEAKER_03Yeah, absolutely. A lot to think about, a lot of exciting changes, a lot of things coming up. Been great having you, both of you. Thank you. At all Andy, you know, as the Bart Partnership, we're very proud to be supporting you and accordion. Great story about the consulting business, obviously. Great double act, you two as well. So great having you here today. Thank you for joining us today. Look forward to seeing you on our next podcast series. Thank you. Thank you, Nick.
SPEAKER_00Thanks, Nick.