How finance leads business change at Zuora

… bundles, where you show one price for a myriad of SKUs on the contract. That was something that sales always wanted to do, um, that we could not support in the old system. Now, if a new go-to-market motion comes, our teams actually have time to be able to digest it, to be able to set it up. Because our tools support end-to-end, from setting it up, setting up SKUs in the product catalog all the way through revenue recognition and collection. We used to do nine or 10 non-GAAP two analyses for KPMG to prove out, um, that our revenue was materially correct. We were able to drop all but maybe two or three. Wow. Yeah. That’s like, what? A 70% reduction? (laughs) Incredible.

Hi, everyone. Welcome back. Once again, my name is Catherine Sheley. I’m on our product marketing team here at Zuora, and I am joined again by our own Rachel Knoll, our senior director of Quote to Cash. Rachel, thanks for joining us for one third and final part. Happy to be here. So, in our third and final part of this series on Zuora’s finance transformation, we’re gonna marry the two together. Part one, we looked at the people, the processes, the org structure. Part two, we looked at the technology itself and how that supported this transformation. This third part is gonna be all about looking towards the future, what you can do today, and what you can do in the future because of having these systems and processes in place and be more efficient, what your team has capacity to do around that. Rachel,

I’m, I’m excited to dive into this third part. I wanna first ask about the new challenges that are showing up in the business. Given that, you know, you’ve been able to deploy efficiently new pricing models. You said you rolled out, you know, an entirely new catalog. You’ve been able to support things like ramp deals now. What challenges are you and your team met with now? Yeah, so I still think that there’s, um, a lot for us to do. We’re always trying to optimize the process. Some of the main things that we’re focusing on today is really improving the quoting process for the deal desk team and sales team. We are able to get the quotes into billing, um, the way that billing needs them, but there’s still a lot that we can do to make that process better for the user. Um,

we are also, um, we’ve just implemented Zuora Collections, and so there’s a lot there with new features coming out for us to be able to utilize. This is the first time our collections team has been on this new tool. Um, we’re also looking at AI. We’ve had some great success on the revenue side, um, being able to use it for our contract review. So, we’re starting to look at how we can use AI for the billing and deal desk teams as well to really help hone in their review processes. Got it. So, you’ve continued to be Zuora’s customer zero, so to speak, and being able to try out the new product innovations that we’ve had. You’ve had the bandwidth to actually evaluate that and give meaningful feedback to our product teams. I heard that, I heard you’re able to,

um, think about these different go-to-market structures and support that, and you’ve been able to advise the business across that. Thinking about the future, what is the biggest benefit, in your opinion, of having this integrated order-to-cash or quote-to-cash process? So, it’s the flexibility. I mean, now, if a new go-to-market motion comes, our teams actually have time to be able to digest it, to be able to set it up. Because our tools support end-to-end, from setting it up, setting up SKUs in the product catalog all the way through revenue recognition and collection, we’re not as worried about these motions coming to play. Um, we’re ready to dive in and try to make them happen. You shared a lot about, you know, how ramp deals were previously a challenge.

Maybe, if you can dive into an example of a non-standard deal that you mentioned and how Zuora’s architecture has supported that. What would be an example of that in your world? Yeah, so I’ll give another example. So, bundles. Mm-hmm. Um, where you show one price for a myriad of SKUs on the contract. That was something that sales always wanted to do, um, that we could not support in the old system. And so this has actually become part of our new, new motion. It’s become the norm as opposed to something that we would offer as an exception. And part of, um, us being able to do that seamlessly is because our tools do support it. There’s also, uh, times where, on the deals, we have to account for some sort of variable consideration to reduce

the transaction price. Um, those deals can now be handled automated in the system, whereas previously, that would have required us to do journal entries offline. Many different things have really helped us. Yeah, so as you’re looking towards the future, you know, it’s not something weighing on your mind that sales or go-to-market teams are gonna come to you with some sort of crazy deal structure that you can’t support. Instead, you’re looking at it as, “Oh, this is, this is an opportunity for us to actually enable sales to structure this in the best way possible,” rather than, you know, saying no to these type of deals as you would previously. Yeah, I think it’s been a shift. Instead of, um, pushing back because our systems can’t handle it, it, if we’re pushing back, it’s more from a business standpoint of whether the deal is good for Zuora.

I’m gonna a- ask a hypothetical here. Now, I know Zuora doesn’t do, you know, pure play usage pricing today. But say the business came to you and wanted to do a new pricing model, like usage, for example. What would be your reaction to that, you know, given your familiarity with what Zuora can handle today? Let’s figure it out. (laughs) I, I love that. Uh, instead of, you know, being that, you know, naysayer of, “It’s gonna, it’s gonna cause X amount of work. My team’s gonna be left with this. We’re gonna have to do all this data reconciliation,” you’re all for it? Yeah, I mean, it would’ve been a different conversation before, um, we re-implemented. Obviously, if that was the future in how we wanted to go to market,

our teams would have to support it. But prior to us getting on the new tools, um, I would’ve had to flag that it was gonna increase the time for an already cumbersome close.Makes sense. So, we’re ready for it when and if it comes. (laughs) Yes. And was there a moment in time whenever going through either the implementation process, post-implementation, when your teams were kind of locked in, when did you feel like, you know, you and your team were firing on all cylinders? When you’re like, “Ah, this is it.” So, I think there were two big moments. I think one was when we realized that the native integration really was saving the time, that it really was working the way that we’d hoped. And then the second was, we used to do nine or 10 non-GAAP underway analysis for

KPMG to prove out that our revenue was materially correct. We were able to drop all but maybe two or three. Wow. Yeah. That’s like, what, a 70% reduction? (laughs) (laughs Incredible. And even with, you know, all of this progress you made, I, I wanna, I wanna keep it real, right? What still feels hard internally? What is top of line for you in terms of what you’re looking forward to either improving or enhancing? Where do you see opportunities for that? So, like I mentioned previously, the quoting process is where we really wanna see, um, even more gains. Again, we have it so that most of the quotes can get to billing appropriately, but really honing in on that user experience and making it easier for those quotes to happen. And then, really the focus on AI and really enabling the teams to focus on the more meaningful work, as opposed to data checks and that kinda thing. So, um, trying to implement things that’ll make things better for our teams. So, the work is never done. You’re still constantly pushing for your teams to get, to get back to real accounting. We’re just fine-tuning the knobs at this point, and you know, the systems and processes that you’ve put in place have really given you that freedom to really start dialing in on what’s that, you know, last 1 to 2% of efficiency that you and your team can deploy. AI is a really hot topic. What has been the impact of layering AI into your processes? Or maybe you could talk about some of the, the efficiencies that you’ve seen because you’ve had the bandwidth to evaluate AI tooling. First, I wanna say that I think that doing our re-implementation and getting on the new tools, and really having that accurate flow end-to-end kind of enabled us to look at AI tools. Because frankly, if we had implemented the AI tool before we re-implemented, I think the AI tool would’ve flagged everything as an anomaly. I think- (laughs)

(laughs) So, I, I think that really being on our new system helped enable us to get the most benefit out of the AI tools, so that it really was able to learn and pick up what was truly nonstandard, um, and really be able to help the team. That’s really interesting, Rachel. You’re saying that like, you would not have even been able to fully take advantage of this, this particular AI tool set pre-re-implementation, pre-this financial transformation process, because everything looked nonstandard, everything looked like an anomaly. That’s really interesting. (laughs) And once more, into sort of your role and where you see it evolving, where do you see finance in general, and especially, you know, quote-to-cash leaders, where do you see them playing a role in pricing design and how that’s deployed? So, I think kind of as a

consultant, kind of being able to say, “Hey, this is how we can make a really great process around this, and this is what, um, will make it easier for us to scale.” I, I think that really thinking about the end-to-end is where we can add a lot of value. And in your opinion, when should you be brought into those conversations? When do you think it’s best to, like, have those conversations with your go-to-market or pricing counterparts? So, I think as early as possible. Um, ideally before it’s approved, so that we can weigh in on if there’s different ways to go about it, what ways could be better suited for the business or suited for how quickly we can scale with it. Thinking about, you know, Zuora the product forward-looking, how do you think that helps sort of future-proof these new go-to-market initiatives? We talked a little bit about

it on this usage front, where you know, you’re ready for that, but anything else you wanna add on sort of supporting the future of go-to-market as it pertains to quote-to-cash? I think really having that end-to-end integration is super important, because you’re able to set up the product catalog the way it needs to be, and then have that flow into your quote, which can flow to billing, which can flow to your revenue tool. And as long as that flow is enabled, um, it’ll make it a lot easier for you to adopt these different models. So, rather than fixing or trying to shoehorn processes into a way that, you know, go-to-market wants to sell, it’s being future-proof in the way that, like, you can sell wherever or however you need to go to market. I think that’s really interesting, Rachel,

and sort of having finance as that strategic enabler, rather than someone who’s gonna come in and pose, you know, blockers and challenges to the processes. And Rachel, when, in your opinion, do finance teams need to be brought in? If we go back to the example that we had previously, like, what if we wanted to introduce pure usage, some sort of pure pay-as-you-go model? Walk me through your thought process on what you would do and when you think you should enter that conversation. So, I feel like it should be as early as possible, because, um, there might be considerations that leadership would care about from the finance perspective. Um, in the pure usage example, um, we need to understand how we’re gonna be able to take the revenue, um, and whether that is desirable from a leadership perspective. Um, it could

impact the predictability of the forecast, and, um, these would just be things that they might want to know. Um, it could also impact, depending on where we are gonna be able to get the data, um, what our close timeline looks like, which again, might impact what leadership thinks about going forward with it. So, it’s not gonna be a no. You’re ready to do usage. But it’s going to be a yes, and. It’s gonna be a yes, and you have strategic finance leaders like yourself that are empowered to advise the business based on having all of these go-to-market options at your fingertips, but can say, “Concessions might have to be made here or there,” or, “This revenue model might work better for the business in these circumstances.” And you have all that in a unified order to cash. Therefore,

you can make those calls. Rachel, after talking with you through all of this, once again, it sounds like the foundation is the right place to start. It’s not just the systems, like we talked about in part two. It’s not just the people and the org and the processes that we par- talked about in part one. But it’s bringing those together so that you can support all of these forward-looking business activities, and you know, supporting things, like more complex go-to-market structures, being brought in early and being an advisor to the business, being able to take advantage of, of new tooling and sort of fine-tuning exactly how your team can be more efficient moving forward. It’s not just a tech upgrade. It’s really rethinking, you know, your finance processes from the ground up. Rachel, it was a pleasure

speaking with you throughout these three parts. Uh, I really feel like we’ve gotten into how you have pow- empowered your team to get back to real accounting. I wanna thank you once again for joining us here, and I really appreciate your time with us. My pleasure. I really appreciated being here.