Efrain Rivera's guest appearances

Efrain Rivera

CFO THOUGHT LEADER

Count Me In®

Anders Liu-Lindberg

Michael High

Jeff Thomson

Omar Choucair

Hilla Sferruzza

Matthias Tillmann

Casey Woo

Claire Chandler

Jeremy Belhar

Michael Borreca

Marwan Al Suwaidi

Karim Ghandour

Shifra Kolsky

Anders Fohlin

Matt Borowiecki

OwlTail

Back in April of 2020, as the consequences of COVID’s arrival in the U.S. sent financial markets reeling, Paychex CFO Efrain Rivera had the temptation “to say nothing.” As the company’s quarterly earnings call with analysts quickly approached, Rivera explains, a number of executive team members had gathered in conference to debate the idea of halting any future guidance in light of things being just so uncertain. “The problem was that we did have data!,” explains Rivera, referring to Paychex’s unique lines of sight into the payroll practices of thousands of middle-market businesses. The subsequent earnings call was unusual for its length (2 hours) as well as the general nature of the discussion, recalls Rivera.    “Half of the analyst questions were really about the general economy and what we were seeing because they knew that we had unique insights into employees,” remarks Rivera, who notes that the prior debate ended with those lobbying for “more guidance” scoring the win. Rivera adds that the prevailing point of view became, “We need to say what we know, and we need to say, ‘This is the limit of what we know.’” Weeks later, when Paychex found it necessary to revise some of the guidance that it had provided on the Spring 2020 call, there was no double-guessing of the earlier debate’s outcome. Says Rivera: “To this day, we still get credit for having said what we said and shared what we shared at a moment when people were very concerned about saying anything.” –Jack Sweeney

Back in April of 2020, as the consequences of COVID’s arrival in the U.S. sent financial markets reeling, Paychex CFO Efrain Rivera had the temptation “to say nothing.” As the company’s quarterly earnings call with analysts quickly approached, Rivera explains, a number of executive team members had gathered in conference to debate the idea of halting any future guidance in light of things being just so uncertain. “The problem was that we did have data!,” explains Rivera, referring to Paychex’s unique lines of sight into the payroll practices of thousands of middle-market businesses. The subsequent earnings call was unusual for its length (2 hours) as well as the general nature of the discussion, recalls Rivera.    “Half of the analyst questions were really about the general economy and what we were seeing because they knew that we had unique insights into employees,” remarks Rivera, who notes that the prior debate ended with those lobbying for “more guidance” scoring the win. Rivera adds that the prevailing point of view became, “We need to say what we know, and we need to say, ‘This is the limit of what we know.’” Weeks later, when Paychex found it necessary to revise some of the guidance that it had provided on the Spring 2020 call, there was no double-guessing of the earlier debate’s outcome. Says Rivera: “To this day, we still get credit for having said what we said and shared what we shared at a moment when people were very concerned about saying anything.” –Jack Sweeney

803:  Sharing in a Moment That Mattered | Efrain Rivera, CFO, Paychex

Contact Efrain Rivera: https://www.paychex.com/newsroom/executive-bios/efrain-rivera https://www.linkedin.com/in/efrain-rivera-75b4b15/ FULL EPISODE TRANSCRIPTMitch: (00:00)Welcome back to Count Me In. I'm your host Mitch Roshong and I will be bringing you episode 54 of IMA's podcast. Today's expert guests is CFO and treasurer of Paychex. Efrain Rivera. He joined my cohost, Adam to explain how technology trends have impacted paychecks and the services they provide for their clients. He also talks about how clients expectations of their services have changed. Listen and now to hear how this executive of a highly reputable outsourcing firm has realized the changes in our accounting and finance world.  Adam: (00:35)So Paychex is a provider of human resource, payroll and benefits outsourcing services. And so with the broad scope of traditional services, how have technology trends impacted the job you and your team are required to do?  Efrain: (00:54)Yeah, I think it's impacted it in two ways. So the first is with respect to the platform itself that we use to deliver those services. And then I think the second which we'll talk about is the way those services are actually delivered. So first, let me talk about, the technology of the platform itself. I'd say starting about nine, 10 years ago, you saw an evolution of service providers, moving to the cloud, on platforms that were multitenant and SAS, meaning, you moved away from on premise software, we moved into the cloud and your systems were available to all of the participants, in that were using the product all at once. And you had to have a robust system that was capable of addressing the needs of all of those, those clients. What that meant was, you needed to be able to deliver updates to that platform seamlessly across all of your client base and you needed to do that in real times. So, your systems had to become more, high availability and, they, they needed to, participate or be available for frequent updating instead of an update that occurred maybe once or twice a year or three times a year. If you were doing it more frequently, you now have the evolution of systems which frequently were updated on weekly and monthly bases based on, the needs of both users. And requirements of the system. When you put that all together, it put a lot more demand, on the technology. and it fundamentally impacted the way, the technology was delivered and now what was a trend 10 years ago has become the dominant way in which technology is delivered, particularly in the human capital management space, which is what we talk about when we talk about HR, payroll and benefits. So it's changed very dramatically over that period of time and impacted the way that we do our job and the way that we make investments to sustain that platform. That's the first part of the, equation. The second part is more recent and that's how the services that, technology enabled service providers deliver have changed and those services have changed because what used to be primarily a service provider function has now shifted to become a mix of both technology and service provider. What I mean by that is this many things that in the past, could only have been done directly with a phone contact or chat contact with a service provider, an actual service provider can now be done through technology itself. So, for example, the use of technologies such as intelligent chat bots, artificial intelligence, robotic process automation, all of these things have revolutionized the way service is delivered. So while we used to think about this clear divide between technology and service delivery, those lines became blurred. And what used to be a service is now increasingly delivered through technology. In our case, we have, intelligent chatbots that, that can answer many, many questions that clients, pose. And our systems are becoming more and more intelligent so that when we see that a customer is lingering in one part of the, application, chat, a chat window will pop up, giving them some indication around what to do next. So systems are becoming more intelligent, service is becoming more blurred with technology, and all of that puts a premium on making the right kinds of investments in technology. So that, the customer can get the service that, that they want and deserve.  Adam: (05:54)So you just mentioned a lot of different software applications, the, the evolution of all those and there's also the evolution of cloud accounting technology, which all those things have to talk together. Do you, what found, what challenges do you face in providing those services?  Efrain: (06:11)So I would say with respect to the evolution of cloud accounting services, um, that's not an area that, that we provide, but a cloud accounting services interface with the technology that we do provide. And so for us, the biggest challenge there is, or one of the bigger challenges is to ensure that our systems and our software, particularly our, our software interface seamlessly with the kinds of accounting software that major providers, delivered, to customers. So there's a number of packages that, that are prevalent in the marketplace. There's one dominant package. And, for us as we design our systems, particularly on the payroll side, but in other areas too, on, on, human resources administration and also in our time and attendance systems, our time tracking systems, they need to seamlessly integrate with those, accounting packages so that the information that's being, captured in the system is transmitted, into the accounting systems and the correct information flows both ways and increasingly if not just good enough to do it, on some sort of file transfer basis. Increasingly what's going on is that that information is exchanged real time or, or we're being asked to exchange that information real time, with third party vendors. And so configuring our systems to be able to do that becomes an important challenge. and, one of the, one of the things that, that our it group, works on.  Adam: (08:02)How have you handled a security, with those systems talking together in real time now?  Efrain: (08:08)Yeah, security, I would say in the last decade, the amount of, the amount of investment that we have made in security has increased significantly. There's a couple of reasons for that. One is because we transmit so much, money, we have to ensure that the perimeter of our, our systems is hardened, to prevent intrusion. So we're constantly on the lookout for that. But the second point, which you just mentioned is we also need to be, um, we also need to look at how our systems interface with other, other providers to ensure that there are no vulnerabilities when information is exchanged. And so we have made a lot of investments and things like encryption of information ensuring that, when there are handoffs, in information, there's no, there's no security issues around that. And also, um, we have made significant investments in monitoring activity in and out of our systems to ensure that, data is protected and there intrusions are not minimized, but basically prevented. so we, we spent a lot of time, thinking about that and working on that and investing to make sure that those issues will not occur.  Adam: (09:44)Now, I'm sure your client base spans a variety of industries and markets. So how have their expectations changed over the years as far as your services you provide and the detail or accuracy that they require?  Efrain: (09:57)Yeah, that's a good question. I would say there's been a significant change and what customers require. I think that in the past customers were very willing, I would say going back 10 years or so, very willing to, sit back and, and let the provider, be the one driving the activity. And they were content with, interacting with their provider in that way. Their service provider, I think now it's very different. I think increasingly customers want to do much of the work themselves, at least the important parts that they value. And so you need to work in a cooperative environment, with customers and provide a complete self service functionality. We provide a functionality that spans all the way from doing it for the customer to having it all, uh, having the customer do it by themselves. But the thing that ties all of that together, whether you do it yourself or you have someone else do it for you, is that whatever process you use has to be transparent and intuitive to the customer. And what is required now is simplicity, and also insight into the business that, that customers are running. So there's a increased need for simplicity and transparency in the information that you provide to customers. And if you can't provide it to them, customers get frustrated and will go elsewhere.  Adam: (11:41)That makes sense. You've got to provide that value that they need so that they want to keep coming back.  Efrain: (11:46)Yeah, that's correct. And, in our systems, for example, we provide a lot of analytics, to customers they can look at, at and see on our platform how some of their characteristics and some of their data, compares to other people in our client base. And increasingly, customers value that information because they want to get a sense of how they're doing, as against the market as a whole.  Adam: (12:19)Yeah. You know it's great to providing data analytics is huge as we, we understand the importance of data analytics and data visualization. How do you, how does data analytics and data visualization come into your role as CFO at Paychex?  Efrain: (12:32)Yeah, so, you know, I think that there's a lot of discussion about, data analytics and visualization. I think you've got to start first with understanding what you're looking at the right data. and I think that, all of us deal with a blizzard of information every day, but separating what's important from what's not, important is, is critical. I look at a lot of data, and I think that when, when you can clearly visualize the information that, that you're looking at, and you can clearly link that information to business outcomes, then you can make good decisions around what the implications that data are for the business. I think that's the toughest thing. The analytics are one part, but understanding how those analytics impact your business and, what decisions, need to be made based on that data. That's, that's more complicated. So I would say data analytics provides an entryway to good decision making, but you still have to use judgment and you still have to, parse what you're looking at to understand how it impacts the business and that that requires some intuition and judgment, that you gained through, through experience.  Adam: (14:01)So you mentioned that you're able to offer a more self service type function, and people are able to analyze their own things. Are there any other services you've been able to offer are added benefits, because of things like data analytics or other technology trends you've been able to offer to your clients?  Efrain: (14:19)Yeah, I would say that the combination of the products that we, that we offer, on the HR administration side in particular, which is an area that we have been, emphasizing in recent years. The ability to look at that data, is very helpful to customers, who are struggling, especially small and medium size enterprises who are struggling, with building out their talent and recruiting talent. And so much of the information that we provide the clients helps them in terms of the management of their business. And we also have value added services on the HR consulting side that build off of that data that we provide that help, help clients manage their talent, which is one of the biggest issues that clients say they wrestle with. As our systems have become better as our data has provided more insight to customers, they're better able to manage the talent that they have in an environment where unemployment is very low and the competition for talent is very high.  Adam: (15:47)So how much has the finance function evolved for you as a CFO where you are?  Efrain: (15:53)Yeah, I would say, you know, you go back now, I've been here now nine years and I've been a CFO longer than that. I would say in the past more time was spent compiling and searching for data. I would say the trend has been, away from compiling and reporting, data to analysis of data. So I would say it might have in the past been more, a third to two thirds in terms of the split between analysis and compiling data. now I think it's much more a quarter of our time is spent, compiling data, assembling data and, 50 to 75% of the time is doing analysis of the data to drive business insights. And I would say that one of the things that's very, very important in terms of the finance function here at Paychex is that we partner with business units to drive a solid decision making. If you start with good data and you start with good insights, you can draw a good conclusions. And that's something that we emphasize, very, very, heavily here. in order to be able to be an effective business partner, you need to be able to, sit with the business units and, help them understand the data and understand what the implications of the data are to the management of the business. And I think that that's where, finance professionals really, add value in their work.  Adam: (17:45)Well Efrain I really appreciate you taking the time out of your busy to come on and chat with us here on, Count Me In. I really appreciate you coming on today.  Efrain: (17:54)Well, thank you very much. Appreciate it. Take care.  Announcer: (17:59)This has been Count Me In, IMA's podcast providing you with the latest perspectives of thought leaders from the accounting and finance profession. If you like what you heard and you'd like to be counted in for more relevant accounting and finance education, visit IMA's website at www.imanet.org.

Contact Efrain Rivera:<ul> <li><a href="https://www.paychex.com/newsroom/executive-bios/efrain-rivera" rel="nofollow" target="_blank">https://www.paychex.com/newsroom/executive-bios/efrain-rivera</a></li> <li><a href="https://www.linkedin.com/in/efrain-rivera-75b4b15/" rel="nofollow" target="_blank">https://www.linkedin.com/in/efrain-rivera-75b4b15/</a></li> </ul> FULL EPISODE TRANSCRIPT Mitch: (00:00)Welcome back to Count Me In. I'm your host Mitch Roshong and I will be bringing you episode 54 of IMA's podcast. Today's expert guests is CFO and treasurer of Paychex. Efrain Rivera. He joined my cohost, Adam to explain how technology trends have impacted paychecks and the services they provide for their clients. He also talks about how clients expectations of their services have changed. Listen and now to hear how this executive of a highly reputable outsourcing firm has realized the changes in our accounting and finance world.  Adam: (00:35)So Paychex is a provider of human resource, payroll and benefits outsourcing services. And so with the broad scope of traditional services, how have technology trends impacted the job you and your team are required to do?  Efrain: (00:54)Yeah, I think it's impacted it in two ways. So the first is with respect to the platform itself that we use to deliver those services. And then I think the second which we'll talk about is the way those services are actually delivered. So first, let me talk about, the technology of the platform itself. I'd say starting about nine, 10 years ago, you saw an evolution of service providers, moving to the cloud, on platforms that were multitenant and SAS, meaning, you moved away from on premise software, we moved into the cloud and your systems were available to all of the participants, in that were using the product all at once. And you had to have a robust system that was capable of addressing the needs of all of those, those clients. What that meant was, you needed to be able to deliver updates to that platform seamlessly across all of your client base and you needed to do that in real times. So, your systems had to become more, high availability and, they, they needed to, participate or be available for frequent updating instead of an update that occurred maybe once or twice a year or three times a year. If you were doing it more frequently, you now have the evolution of systems which frequently were updated on weekly and monthly bases based on, the needs of both users. And requirements of the system. When you put that all together, it put a lot more demand, on the technology. and it fundamentally impacted the way, the technology was delivered and now what was a trend 10 years ago has become the dominant way in which technology is delivered, particularly in the human capital management space, which is what we talk about when we talk about HR, payroll and benefits. So it's changed very dramatically over that period of time and impacted the way that we do our job and the way that we make investments to sustain that platform. That's the first part of the, equation. The second part is more recent and that's how the services that, technology enabled service providers deliver have changed and those services have changed because what used to be primarily a service provider function has now shifted to become a mix of both technology and service provider. What I mean by that is this many things that in the past, could only have been done directly with a phone contact or chat contact with a service provider, an actual service provider can now be done through technology itself. So, for example, the use of technologies such as intelligent chat bots, artificial intelligence, robotic process automation, all of these things have revolutionized the way service is delivered. So while we used to think about this clear divide between technology and service delivery, those lines became blurred. And what used to be a service is now increasingly delivered through technology. In our case, we have, intelligent chatbots that, that can answer many, many questions that clients, pose. And our systems are becoming more and more intelligent so that when we see that a customer is lingering in one part of the, application, chat, a chat window will pop up, giving them some indication around what to do next. So systems are becoming more intelligent, service is becoming more blurred with technology, and all of that puts a premium on making the right kinds of investments in technology. So that, the customer can get the service that, that they want and deserve.  Adam: (05:54)So you just mentioned a lot of different software applications, the, the evolution of all those and there's also the evolution of cloud accounting technology, which all those things have to talk together. Do you, what found, what challenges do you face in providing those services?  Efrain: (06:11)So I would say with respect to the evolution of cloud accounting services, um, that's not an area that, that we provide, but a cloud accounting services interface with the technology that we do provide. And so for us, the biggest challenge there is, or one of the bigger challenges is to ensure that our systems and our software, particularly our, our software interface seamlessly with the kinds of accounting software that major providers, delivered, to customers. So there's a number of packages that, that are prevalent in the marketplace. There's one dominant package. And, for us as we design our systems, particularly on the payroll side, but in other areas too, on, on, human resources administration and also in our time and attendance systems, our time tracking systems, they need to seamlessly integrate with those, accounting packages so that the information that's being, captured in the system is transmitted, into the accounting systems and the correct information flows both ways and increasingly if not just good enough to do it, on some sort of file transfer basis. Increasingly what's going on is that that information is exchanged real time or, or we're being asked to exchange that information real time, with third party vendors. And so configuring our systems to be able to do that becomes an important challenge. and, one of the, one of the things that, that our it group, works on.  Adam: (08:02)How have you handled a security, with those systems talking together in real time now?  Efrain: (08:08)Yeah, security, I would say in the last decade, the amount of, the amount of investment that we have made in security has increased significantly. There's a couple of reasons for that. One is because we transmit so much, money, we have to ensure that the perimeter of our, our systems is hardened, to prevent intrusion. So we're constantly on the lookout for that. But the second point, which you just mentioned is we also need to be, um, we also need to look at how our systems interface with other, other providers to ensure that there are no vulnerabilities when information is exchanged. And so we have made a lot of investments and things like encryption of information ensuring that, when there are handoffs, in information, there's no, there's no security issues around that. And also, um, we have made significant investments in monitoring activity in and out of our systems to ensure that, data is protected and there intrusions are not minimized, but basically prevented. so we, we spent a lot of time, thinking about that and working on that and investing to make sure that those issues will not occur.  Adam: (09:44)Now, I'm sure your client base spans a variety of industries and markets. So how have their expectations changed over the years as far as your services you provide and the detail or accuracy that they require?  Efrain: (09:57)Yeah, that's a good question. I would say there's been a significant change and what customers require. I think that in the past customers were very willing, I would say going back 10 years or so, very willing to, sit back and, and let the provider, be the one driving the activity. And they were content with, interacting with their provider in that way. Their service provider, I think now it's very different. I think increasingly customers want to do much of the work themselves, at least the important parts that they value. And so you need to work in a cooperative environment, with customers and provide a complete self service functionality. We provide a functionality that spans all the way from doing it for the customer to having it all, uh, having the customer do it by themselves. But the thing that ties all of that together, whether you do it yourself or you have someone else do it for you, is that whatever process you use has to be transparent and intuitive to the customer. And what is required now is simplicity, and also insight into the business that, that customers are running. So there's a increased need for simplicity and transparency in the information that you provide to customers. And if you can't provide it to them, customers get frustrated and will go elsewhere.  Adam: (11:41)That makes sense. You've got to provide that value that they need so that they want to keep coming back.  Efrain: (11:46)Yeah, that's correct. And, in our systems, for example, we provide a lot of analytics, to customers they can look at, at and see on our platform how some of their characteristics and some of their data, compares to other people in our client base. And increasingly, customers value that information because they want to get a sense of how they're doing, as against the market as a whole.  Adam: (12:19)Yeah. You know it's great to providing data analytics is huge as we, we understand the importance of data analytics and data visualization. How do you, how does data analytics and data visualization come into your role as CFO at Paychex?  Efrain: (12:32)Yeah, so, you know, I think that there's a lot of discussion about, data analytics and visualization. I think you've got to start first with understanding what you're looking at the right data. and I think that, all of us deal with a blizzard of information every day, but separating what's important from what's not, important is, is critical. I look at a lot of data, and I think that when, when you can clearly visualize the information that, that you're looking at, and you can clearly link that information to business outcomes, then you can make good decisions around what the implications that data are for the business. I think that's the toughest thing. The analytics are one part, but understanding how those analytics impact your business and, what decisions, need to be made based on that data. That's, that's more complicated. So I would say data analytics provides an entryway to good decision making, but you still have to use judgment and you still have to, parse what you're looking at to understand how it impacts the business and that that requires some intuition and judgment, that you gained through, through experience.  Adam: (14:01)So you mentioned that you're able to offer a more self service type function, and people are able to analyze their own things. Are there any other services you've been able to offer are added benefits, because of things like data analytics or other technology trends you've been able to offer to your clients?  Efrain: (14:19)Yeah, I would say that the combination of the products that we, that we offer, on the HR administration side in particular, which is an area that we have been, emphasizing in recent years. The ability to look at that data, is very helpful to customers, who are struggling, especially small and medium size enterprises who are struggling, with building out their talent and recruiting talent. And so much of the information that we provide the clients helps them in terms of the management of their business. And we also have value added services on the HR consulting side that build off of that data that we provide that help, help clients manage their talent, which is one of the biggest issues that clients say they wrestle with. As our systems have become better as our data has provided more insight to customers, they're better able to manage the talent that they have in an environment where unemployment is very low and the competition for talent is very high.  Adam: (15:47)So how much has the finance function evolved for you as a CFO where you are?  Efrain: (15:53)Yeah, I would say, you know, you go back now, I've been here now nine years and I've been a CFO longer than that. I would say in the past more time was spent compiling and searching for data. I would say the trend has been, away from compiling and reporting, data to analysis of data. So I would say it might have in the past been more, a third to two thirds in terms of the split between analysis and compiling data. now I think it's much more a quarter of our time is spent, compiling data, assembling data and, 50 to 75% of the time is doing analysis of the data to drive business insights. And I would say that one of the things that's very, very important in terms of the finance function here at Paychex is that we partner with business units to drive a solid decision making. If you start with good data and you start with good insights, you can draw a good conclusions. And that's something that we emphasize, very, very, heavily here. in order to be able to be an effective business partner, you need to be able to, sit with the business units and, help them understand the data and understand what the implications of the data are to the management of the business. And I think that that's where, finance professionals really, add value in their work.  Adam: (17:45)Well Efrain I really appreciate you taking the time out of your busy to come on and chat with us here on, Count Me In. I really appreciate you coming on today.  Efrain: (17:54)Well, thank you very much. Appreciate it. Take care.  Announcer: (17:59)This has been Count Me In, IMA's podcast providing you with the latest perspectives of thought leaders from the accounting and finance profession. If you like what you heard and you'd like to be counted in for more relevant accounting and finance education, visit IMA's website at <a href="http://www.imanet.org" rel="nofollow" target="_blank">www.imanet.org</a>.

Ep. 54: Efrain Rivera - How Have Tech Trends Affected Accounting Services and HR?