Digital transformation gave the global tax and compliance provider unprecedented insight into its data. In the process, the organization also leveled up its finance and accounting teams to provide greater value for the business.
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Data makes the difference.
With burgeoning growth across different geographies, markets, and customer ecosystems, Vertex, Inc., found its business technology platform lacking. In response, the global provider of compliance and tax services sought to update its enterprise resource planning (ERP) and financial management systems (FMS) to boost efficiency and deepen data insights with a technology platform that was well-positioned to adapt to future needs.
In this episode of the Workday Podcast, Luke Farrelly, vice president of global accounting and finance at Vertex, Inc., speaks with Sarah Glover, director, solution marketing, services, and technology industries at Workday, about how digital transformation allowed Vertex to make the most of its data.
With annualized recurring revenue and gross recurring revenue top of mind for C-suite leaders, Vertex now has the ability to see how any deal can affect those key metrics, and putting that data into the hands of decision-makers has been critical.
“We did not have the ability to do that kind of thing in our systems before,” Farrelly says. “Now, we can do that with Workday. That’s game-changing to our executives and to our company to be able to have that, to be able to speak to that, to be able to make decisions based on that.”
Vertex also improved its employee satisfaction in finance and accounting. Automation of reconciliation processes for hundreds of customer accounts shortened the time to close—from up to 10 days to less than 24 hours. And a single source of truth across the business improved confidence in data accuracy.
Streamlining those processes has helped free up staff time to perform more value-added work. “We’re becoming business partners as opposed to transactional processors, which is honestly what we were historically,” Farrelly says.
Here are a few highlights of the conversation, edited for clarity. Be sure to follow us wherever you get your podcasts, and remember you can browse our entire podcast catalog.
Sarah Glover: Vertex helps nearly 4,000 clients around the world navigate tax regulations and compliance requirements across jurisdictions. Yet, while growing in different geographies, markets, and customer ecosystems, the company found its business technology platform lacking, so it looked to transform its ERP and finance management systems. In doing so, Vertex managed to improve its efficiency and base its growth on a technology platform that was well-positioned to adapt to its future needs. I’m Sarah Glover, Industry Solution Marketing Director of Tech, Media, and Professional Services. And today on the Workday podcast, we’re speaking with Luke Farrelly, Vice President of Global Accounting and Finance at Vertex. Luke, welcome. Thank you for joining us.
Luke Farrelly: Thank you, Sarah. Happy to be here.
Glover: To start off, can you tell us a little bit about Vertex and your role at the company?
Farrelly: Sure. Vertex solves indirect tax compliance needs for our customers. And the indirect tax is probably more familiar to people here in the United States as sales and use tax. And internationally, it’s a value-added tax. We can solve very complex or even very rudimentary tax issues for our customers by bolting onto their billing systems. And when a customer raises an invoice or goes to charge a customer, our software in the background calculates tax for our customers. And we also handle reporting and paying taxes on behalf of our customers as well.
Glover: Thank you. That’s fascinating.
Farrelly: So my role, I’ve been with Vertex for over 25 years, so I’ve had my hand in almost every area of finance and accounting over all the years I’ve had the pleasure of being with Vertex. Most recently, and probably more direct for the conversation we’re having today, I was the finance lead and the overall business lead for the modernization project we did with the Workday implementation.
Glover: That is excellent. Now, could you paint a picture of the technology Vertex was using previously and describe that tipping point when it was clear that transformation was necessary?
Farrelly: Sure. So previous to Workday, we had many disparate systems across the functional areas. Each kind of functional area had their own solution to their pain points. And while that worked very well for their functional area, it didn’t work well from a collaboration standpoint. It was very difficult to share data across functional areas. I would say the tipping point came a few years ago, really, from two points. One, we were rapidly transforming from an on-premise company to a SaaS-based, cloud-based company. We needed one platform, one source of truth, to be able to scale the organization from a front and back office perspective. And that really led us to look at new technology, which ended with Workday implementation and modernization.
Glover: Excellent. So to delve a little deeper into that question, how important was it to unify, like you said, these disparate systems within Vertex?
Farrelly: So it was huge, right? I mean, we couldn’t possibly scale our business running on these disparate systems. So one of the requirements that we had, the success criteria we had was to have, again, one source of truth, one platform so that we could scale our business. Part of the IPO that we were going under, that we went through, the source of funds through the IPO was to become very acquisitive, and we have. We’ve acquired several companies since we went public. To think about trying to do that then to what we have now, it’s much more solvable now with our Workday platform in place.
Glover: That’s excellent. That’s great to hear. What do you think were the most impactful effects of this transformation within Vertex?
Farrelly: So I think there’s a couple. Internally, we wanted to change the way we worked. We wanted to streamline the processes that we had in place with the outcomes ultimately being changing our customer, our partner, and our employee experience, and that kind of shows up a couple different ways of how did we interact with our customers in booking orders, simplifying that process, having one order flow compared to previously, we had like five or six different--
Glover: Which must have been a nightmare.
Farrelly: Exactly. So customers would have a different look and feel depending on the type of orders that they would place with us. Now, we have one order flow, which simplifies things for our customer. On the employee side, similarly, we've streamlined and expedited expense reporting, made it much simpler for them. And then secondarily, but just as important, having access to real-time information, that has been a huge win for Vertex. I mentioned we were transforming from an on-prem to a SaaS-based organization, and in our earnings call, our CFO and CEO talk a lot about our kind of key metrics, our annualized recurring revenue, kind of our ARR, our gross recurring revenue, our GRR. Those are key metrics that SaaS organizations look at, and having the ability to see how one new deal, and as each deal comes through, how that impacts our ARR, or as a cancel comes through, how that impacts our GRR, knowing that immediately and putting that information in the hands of decision-makers is huge. We did not have the ability to do that kind of thing before. Now, we can do that with Workday. That’s game-changing to our executives and to our company to be able to have that, to be able to speak to that, to be able to make decisions based on that.
Glover: I love that. I want to dig a little bit deeper into that. So within your global accounting and finance division, do you have a before and after comparison of what it was like for your team?
Farrelly: Sure. So again, the real-time reporting is a huge lift for us, pickup for us, but then kind of a level down from that, we’ve made some real strides in the close process. One example I’ll give you that was huge for us. We have an outsourcing business. Not to get too far in the weeds here, but--
Glover: Oh, get in the weeds. Get in the weeds. Love the weeds.
Farrelly: [laughter] Fair enough.
Glover: Sorry. Our listeners love the weeds.
Farrelly: [crosstalk]. So we do tax returns for our customers. So if a customer doesn’t want to take on the compliance of doing their own tax returns, we’ll do it for them, and to the point where we’ll take the money from their account, put it in Vertex bank accounts, and then we’ll pay the taxing jurisdictions on their behalf. But that also requires to have a bank account for all of our customers and then reconcile those accounts on a monthly basis. So while that’s important and it needs to be done from a compliance standpoint, it’s not hugely value-adding when you kind of look at the grand scheme of all the things our accounting team could be doing. That used to take-- before Workday, that would take someone a week to 10 days to get all of those-- and these are hundreds and hundreds of bank accounts. We have one for each customer, 500-plus accounts. Post-Workday-go-live, that gets done on the first day of the close now because we did automation through Workday, bank feeds. It’s done within the first day of the close. Certainly, some things fall out, but that’s where we want the attention to be focused on. That’s the value add. "Hey, what fell out that we need to do extra research on?" And it’s like 2 or 3 accounts versus, "Hey, we had to do 500 accounts, look into each one of them, reconcile them." Non-value-added. We're now focused on where there's a problem that we need to look into and investigate. Huge, huge gain of efficiency there from a week's worth of an FTE's time to spending half a day, maybe a day, to look at the problems where we want that person focused on their time.
Glover: Well, the former CPA in me—
Farrelly: [laughter] I didn’t know that.
Glover: —loves—yeah, no, totally—completely loves that story. So I’m going to go even more into more asking more details. What does planning and forecasting look like now at Vertex?
Farrelly: We’ve made great progress there as well. And I’m sure you’ll be surprised after hearing some of my previous comments. That was largely a manual process for us prior to Workday. And we implemented Adaptive—I don’t think I mentioned that earlier—as our planning tool. Resources is kind of our highest, most expense line item for Vertex. So people costs, that’s our largest single expense item. Historically, prior to Workday, disparate systems, the majority of our time was spent kind of reconciling between our HR system and all the heads they had and people versus our planning system and our accounting system and all the heads we had there and who’s here and comparing those lists and then open requisitions that HR had versus open requisitions we had in our planning system. And we’d spend all this time trying to reconcile those. And that changes literally from day to day.
Farrelly: So now, in the new world, we have workforce planning implemented and integrated with Adaptive. So we’re all in one single platform. Again, I’m probably just repeating myself over and over here, but we have one single platform between HR and finance. We’ve implemented workforce planning as a part of that. So Adaptive is connected to workforce planning with our HCM folks. And we’re not reconciling anymore. We’re not spending, again, less value-added time doing Excel spreadsheet reconciles like we did before. We’re all in Adaptive, and everybody agrees. So that’s been a huge pickup for us. We’ve gained confidence with our internal customers. We’re all working from the thing. And we’re actually doing the work we should be doing as opposed to manual reconciliations in Excel, which is, again, not very value-adding to the process.
Glover: And that’s great because when you really think about it-- and I as a finance person get sometimes focused so much on that, but you started to talk about headcount, right, and you started to talk ahead. So looking at the people portion of this, so we’ve been hearing a lot about the challenges in recruiting and retaining talented finance and accounting professionals, not necessarily-- most of when we’re hearing reporting and stuff talking about other areas in technology, but we’re really talking about the accounting professionals, right? What effect, if any, has your finance transformation had on the ability to retain the people that you need now and also projecting out into the future?
Farrelly: This has been a great story for us. Historically, the close process for the accounting team has been, "Just get the numbers done. We’re doing no analysis, again, very little value-added work." It was just try to make the date. Now that we’re in Workday, we’re shaving days off the close, right, and we’re actually looking at the numbers and analyzing the numbers. So the team is much more engaged in getting the work done because we’re seeing the scale we can bring now that we have Workday. We’re becoming business partners as opposed to kind of transactional processors, which is honestly what we were historically.
Farrelly: So the team is much more engaged into the process, into Workday, into making things better. We know this, honestly. We have data on this. Vertex does an annual engagement survey, and finance has seen our engagement scores go up in the past two years. Since we’ve been live with Workday, we have seen our engagement scores go up, and there’s a few drivers of engagement that we focus on. One question is key and near to my heart: How difficult would it be for you to leave Vertex? And that score is perfect for us. No one wants to leave the finance team.
Glover: That’s awesome.
Farrelly: And that score has gone up for us since we’ve gone live. So we can see tangibly in this data that, now that we’ve kind of moved from-- and things aren’t perfect. I’m not suggesting that. But we can see in the data-- and these are anonymous surveys. We can see from the data that, since we’ve moved from our older system where we were very much just transactional processors to, "Hey, we’re making progress." We’re moving forward with new technology, cloud-based, where we can see the scale, and the close is getting done quicker. We’re providing data analysis to the business. We’re part of decision-making within the business. People are much more engaged and are becoming happier employees. So the retention is becoming better.
Glover: I love that. I love that moving from really transactional to strategic. And it becomes the cool place to work, right?
Farrelly: Yep.
Glover: You can change direction. You can offer insights in a way that you haven’t before.
Farrelly: Absolutely.
Glover: I love, love, love that. OK, so what do you think is top of mind for other finance leaders in the tech industry like you and their key priorities, would you say? Or how are they overcoming the challenges of this incredibly fast, ever-changing industry?
Farrelly: I would think people are focused on—and I touched on this a bit—access to data. And Workday has helped us considerably getting access to real-time data. And I think if people are listening to this podcast, thinking about a modernization project like we took on, you need to be sure you’re thinking about it in terms of your outcomes, one being ensuring you have access to real-time data, and that that data is getting to the people who need to make the decisions, that they can understand it, and they’re able to make the decisions that they need to make, and that you are agile enough that you can pivot when you see the data that you need to, to make those decisions to pivot. So I think that’s where my head is, is making sure we’re delivering the right data to the right people at the right time, and making sure we’re supporting that from an internal customer perspective.
Glover: Excellent. All right. Now, I’m going to give you a magic wand. [laughter] So this is the cool part. You become ever-powerful. But if you could offer someone else in your role one bit of advice for the next 12 months, what would it be?
Farrelly: If they’re preparing for something, taking on something like we just did, I would say, be prepared for kind of taking care of your team. There’s going to be ebb and flow on a project like this. Your team is going to undoubtedly be overwhelmed at some point within your project. But kind of keep your eye toward the prize that, when you come to the other end of this, it is wholly worth it. There are so many advantages to the single source of truth, to the unified platform that we got to, the real-time data, kind of all these things that I talked about.
Farrelly: And the story isn’t over between Workday and Vertex and you as a customer of Workday. AI is coming fast and furious. I’m seeing a lot more of it coming from Workday, and we’re just scratching the surface here about all the artificial intelligence opportunities Workday is starting to offer us or have been offering us and is going to bring even more scale and more opportunities for us around the close, around analytics. So the story is still being written for Vertex and for Workday as partners, and I think that’s great.
Glover: I would love to be continuing this conversation for another 24 hours, [laughter] 24 years. You’re my favorite person—
Farrelly: Thank you, Sarah.
Glover: —to have in a podcast booth or otherwise. And so I have had the absolute pleasure of speaking with Luke Farrelly, vice president of global accounting and finance at Vertex. Remember, everybody out there, to follow us whenever you listen to your favorite podcasts, and remember you can find our entire catalog at workday.com/podcasts. I’m your host, Sarah Glover, and I hope you have a great workday.
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