FEI spoke with Chris Loy, CFO of Superior Silica Sands and member of FEI’s Committee on Finance and Information Technology (CFIT), Small and Medium Business (SMB) subcommittee to get his thoughts on how emerging technologies can help solve some of his organization’s biggest challenges.
FEI: What are some of biggest challenges in your accounting and finance department?
Chris Loy: We are a relatively young company. The company was formed in 2008 and then we went through a very dramatic growth cycle as the oil and gas industry boomed from about 2008 to 2014. We grew very quickly but a lot of the systems and processes that you would like to have didn't grow along with it. And then we went public in 2013, which of course brings a whole other set of demands that, if you're not prepared to meet, can create problems.
When I was originally hired two and a half years ago, we had two significant problems. One was material weaknesses in internal controls, which is never good for a public company. The other was an only partially implemented ERP system. Also, our financial reporting didn't have a lot of credibility as a result. In short, those were the two major challenges that I had to face immediately.
We got through these within the first year. I would say it's really improving our competitive position by understanding our business. We have good information now and it's more peeling back the onion, if you will, and going back to what drives those results so that we can influence them positively. We can correct things that are going negatively more quickly so that we're not waiting for the end of the month to understand where we're going to end up.
In a nutshell, we're not going to be the low-cost competitor, and it would be foolish for us to try to pursue that. Where we’re focused on differentiating ourselves is building deep customer relationships by being more responsive. And, secondarily, having technology products that differentiate us so we're not competing on a commodity basis.
That customer service component is what drives the need for robust technology and really good information systems that give us the information we need at our fingertips so that we can respond quickly to customers and anticipate problems before they happen. By doing that we also take costs out of the system and improve our competitive position.
I should add, however, that it's always about people and processes, and I should emphasize that it's people first and then processes. I learned a long time ago that good people can overcome poor processes, but the best processes in the world won't survive people that aren't adequately qualified or motivated.
FEI: As a senior finance leader of a small to medium size business, how does CFIT help you be better in your role?
Loy: I think it plays a very large role. I get exposed to a lot of technologies, practices, and processes of companies that are much further along in their journey using technology to improve their business. While not all of it is applicable or necessarily practical at this point, it helps me to understand and develop a roadmap for our efforts on technology implementation. To me that's the biggest value. But there are things that I have, and can, apply immediately from my interaction and my involvement with CFIT.
A number of years ago the challenge with companies was they didn't have the information they needed. Today companies have typically more information than they can use. And it's a similar thing with technology today. There are so many different choices now, that really weaving through the sales hype, and the more practical considerations, is really important because all companies have limited resources and time to undertake big, and often even moderate, technology initiatives. So the last thing you want to do is have a failure, because that really sets back progress significantly.
FEI: What were some of the key takeaways for you from the December CFIT meeting?
Loy: There was a lot of big picture discussion about data management and data visualization that's really interesting. Companies are really struggling with having so much data. How do they make it useful?
My company is not as far along, but it certainly helps guide our efforts to understand how to approach technology initiatives intelligently so we don't create this issue of too much information. We were undertaking an integrated supply chain initiative where we are going to digitize and pull together all of the information related to our whole supply chain, but initially production and then ultimately up to distribution and sale. There are a lot of pieces to that, and one of the things that you have to be really careful about is not trying to do too much too fast. You're better off trying to get an 80 to 90 percent solution initially that everybody can process, use successfully, and then adopt as part of the business practices. And then have a platform that you can continue to refine. Don't let perfect be the obstacle to good enough.
The other common theme that's not just in this meeting, but in the last several meetings, is using artificial intelligence (AI) to get information out of large pools of data that you might not otherwise be able to see or that you wouldn't effectively be able to tackle. Some of the ways that they're using AI to help parse, interpret and then present information, is pretty fascinating. For most small to medium size businesses, it's hard to implement things like that, not only from the standpoint of cost, but from having the human resources that have those skills. But it's definitely something that you can see is going to continue to be adopted as we move forward, and so if you're not aware of it you need to be because you're going to be increasingly facing it.
FEI: What are you most looking forward to at the upcoming CFIT meeting to be hosted by Oracle?
Loy: The one that probably has the most immediate applicability is the topic of “cloud benefits realized”. This is an area where small and medium sized businesses really can benefit and I certainly see it with our company.
We have increasingly moved away from hosting anything, because of all the implications of reliability and security that come of along with that. In terms of being able to move more quickly, it's much easier to push stuff out onto the cloud than build your own infrastructure, and then you have to have all of the maintenance considerations, whether you do it yourself or use a third party and all the security considerations.
That's an area where there's definite, immediate applicability to small and medium sized businesses and I'm going to be interested to get feedback from the Oracle folks, what their view is on the benefits and the things to watch out for from their learning.