Tim McAdam, general partner at TCV, speaks with CXOTalk about digital transformation in the new services economy. McAdam describes it as the “instant-on” economy, where everyone can subscribe to anything they want in apps or online, changing the way businesses think about end-user consumers.
TCV, a private equity firm focused on IT businesses in the growth stage, is an investor in FinancialForce. McAdam says more analytics is driving decisions in the enterprise as an investment in customer relationships.
“It’s a mindset challenge. I think given how many infrastructure software companies are making it easier, I think FinancialForce is a great example of that, to connecting the front office to the back office, using the Salesforce or CRM customer record and tying that customer record to back-office processes like invoicing the service contract, billing, and down into the weeds of the general ledger are transforming the way people think about the service economy and managing that relationship with consumers,” he says. “Trust the data.”
Transcript
Michael Krigsman: I’m Michael Krigsman, an industry analyst and the host of CxOTalk. And, we’re here in Las Vegas at the FinancialForce conference, Community Live 2017. I am speaking with Tim McAdam, who is a general partner at TCV. Hey Tim, how are you doing?
Tim McAdam: Hi Michael, pretty good! How are you?
Michael Krigsman: Great! Tell us about TCV.
Tim McAdam: Yeah, so TCV is a private equity firm, and we are focused exclusively on IT businesses that are in their growth stage, so they are pretty mature. We've been around for 22 years. We're investing out of our ninth fund and currently manage about twelve billion dollars.
Michael Krigsman: And you are an investor in FinancialForce.
Tim McAdam: I am. So, I’m on the board of FinancialForce, which is a very typical TCV investment. We invested about two years ago in the company.
Michael Krigsman: And there was a lot of talks today about the new services economy. And so, when we talk about that, what are we referring to?
Tim McAdam: Yeah, I think Todd did a nice job on stage earlier talking about how the world across many sectors of the GDP is kind of moving to a services economy. I thought the example he gave with Boeing actually renting their planes to the United's of the world as opposed to selling them is a really interesting tidbit about how deep it’s actually affecting the manufacturing sector. But the services economy, as I think about it, is almost the “instant-on” economy. You can pretty much subscribe to anything right now, either in app format or online and not have to physically go to a store in the case of the enterprise. Crunch the data that you used to crunch manually… We have an investment in our portfolio called Avolara that allows you to calculate your sales and use tax automatically as a service, on-demand. So, it’s far-reaching across multiple sectors of the economy, but I think it’s transforming the way businesses think about their end-user consumers, for sure.
Michael Krigsman: So, if Boeing, such a large, established company, can transition at least part of its business model, and an important part, to being a service economy component, any business can do it but it’s hard, though. It’s a challenge for a big company.
Tim McAdam: It’s a mindset challenge. I think given how many infrastructure software companies are making it easier, I think FinancialForce is a great example of that, to connecting the front office to the back office, using the Salesforce or CRM customer record and tying that customer record to back-office processes like invoicing the service contract, billing, and down into the weeds of the general ledger are transforming the way people think about the service economy and managing that relationship with consumers.
Michael Krigsman: And there’s a very important data component as well.
Tim McAdam: Yeah, I think more and more analytics is becoming the key to driving decisions in the enterprise, and the great thing about building on the […] stack is you get the utility and use of everything that Salesforce is developing for their ISV partners. In the case of analytics, it's the Wave platform, which gives you a graphical representation of what's happening at the data level, and now, with the release of Einstein, you really get AI and machine learning wrapped around Wave in order to allow business analysts to make better decisions.
Michael Krigsman: You mentioned mindset, and if you talk about mindset, that’s not the technology. And so, what’s the role of the non-technology components in all of this?
Tim McAdam: Well, what we're seeing in most of our customers, and not just FinancialForce customers, but other customers, is that it's a mindset shift more than it is a technology shift. So, that customer journey of contract-to-renewal is one where you have to have multiple touchpoints in order to keep that customer happy, whether it's an enterprise customer or a consumer so they will