The FP&A Trifecta: How Finance, Data and Systems Drive Strategic Growth

[00:00:14] Melissa Howatson Welcome to The CFO Show. I'm your host, Melissa Howatson, CFO of Vena. What if finance teams don't have to chase the mythical unicorn to be best in class? In this episode, we explore the FPA Trifecta: finance, data, and systems, and how this combination is helping organizations move beyond spreadsheets to become true strategic partners. We'll dive into why the data is the foundation of optimized processes, why so many teams struggle with EPM adoption, and how AI is reshaping the finance role, from cost controller to storyteller. Our guest is Charlie Liu, Founder and Chief Happiness Officer of MCC. With more than 15 years of experi ence helping Fortune 500s and startups transform finance, Charlie is on a mission to turn spreadsheets into strategy and empower finance teams to drive growth. Charlie, thanks so much for coming on the show. Great to have you here today.

[00:01:19] Charlie X.W. Liu Thank you for having me, Melissa.

[00:01:21] Melissa Howatson So, before I jump into my questions, I'm wondering if you can tell us a little bit about yourself and MCC. How did you become a chief happiness officer?

[00:01:32] Charlie X.W. Liu MCC stands for Monte Carlos Consulting. For me, it's a company I started on all things FP&A. The title Chief Happiness Officer, I think, goes back to our mission, which is how do we level everyone up? How do we achieve value and improve the lives of everyone we touch? It's funny because we initially started as Chief Customer Happiness, but I realized to have happy customers, I need to have a happy team. At the end of the day, it is a consulting PS people-driven company, which is why about four months back, I removed the customer side. So now I'm in charge of happiness across everyone I touch, both our team and our customers.

[00:02:17] Melissa Howatson Excellent. And so you run MCC. How did your journey take you to that? And tell us a bit about what MCC does.

[00:02:25] Charlie X.W. Liu So, what MCC does is we're a boutique challenger consultancy of all things FP&A. The journey started as a fractional CFO service. And what I've noticed was, as companies scale, they have pain points around acquiring systems, implementing data processes effectively. And through my journey, I found that most consultancies that they work, are often really good at the systems, the tooling, but they're not as comfortable on the other side. The FP&A, the people side, the data side. And our goal is to be able to, our goal is to be able to combine all the different pillars of FP&A. So we understand why you need the upgrades to your systems, your data, but also understand the data to process in the systems as well. So that at the end of your journey of implementing with us, you're actually getting the value, and the platforms can adapt with your business.

[00:03:32] Melissa Howatson Excellent. And it's been quite a journey. And today we're gonna be talking about the FP&A Trifecta. Now, I think sometimes in FP&A, we think of the trinity of planning, budgeting, and forecasting. But when it comes to the trifecta, what do you think are the components that are key to a real successful finance function?

[00:03:57] Charlie X.W. Liu I think there's three parts, and it's a piece of how we build this business, which is finance, meaning understand the business, the storytelling aspect, data. I think everything starts with having useful data. I'm always careful saying, clean data, because clean data can often be difficult, but useful data. And then having systems around it so that you can have SOP standard procedures, and you're able to kind of scale as the business grows as well. Parties involved are often too focused on just one piece. And I find that, especially in FP&A, it's such an interesting kind of career path or segment of where you have to understand the business really, really well. You have to be a good business partner. You also have to be really good at data so that you can actually understand what you're looking at. You can actually analyze, get actionable insights. But also at the same time, you can't just be a super soldier. You have to figure out how to build processes, systems so that you're not carrying the whole weight of the company on your back so that you can grow with the business. That's what I'm kind of concluding to those three pillars that we have.

[00:05:12] Melissa Howatson So let's unpack these pillars a little bit further. Let's start with data. Tell me what you think of there and why it's so important.

[00:05:21] Charlie X.W. Liu So my background came from data, and I got into accounting finance and advisory afterwards. Everyone's talking about we want data, we want clean data, I want analytics. I want, especially these days, everyone's talking about AI. How do we leverage more AI? How do we get better forecasting? How do we get better analytics? Often cases, when I hear those questions when I'm working with clients and prospects, the first question they ask is where are we with data? How much time are you spending kind of wrangling your data, making sure it's clean, reconciling the data? I have clients where they spend a week, two weeks every month just making sure the data is clean. Naturally, of course, they're not going to have time to actually look at their data, see how they're performing.

So I think first is kind of understanding what data you even have. That's interesting. Sometimes you can see clients or companies get really large nine figures and they don't have clean data. It's a good problem to have to grow and have a great product. It's a great product market fit, but they don't really know where they stand. So I think it's understanding where you are with the data. Do you actually have clean accounting data? Do you even have clean sales data? Do you have clean customer data? And then from there, figuring out what are the next steps, right? How do we get insights from that? What are the insights that we need? What are the definitions? A lot of businesses have different definitions of KPIs and metrics depending on who you talk to. So I often advise customers starting to figure out where you are with your data first. What are you looking to get out of it? And be very realistic with it at the same time. Perfection is often mentioned to be kind of enemy to progress, right? So it's important to kind of just start somewhere and then figure out and improve that over time. What's your take when we talk about data?

[00:07:08] Melissa Howatson Well, so I'd say two things that come to mind is one, I think in finance, we don't necessarily think data first. And then sometimes, and that often becomes the thing that trips us up later on because we didn't take the time and energy to say, okay, what data do I need? What is the core system of truth of that data, and the rules I'm gonna build around it so that it's clean and I can use it to go to my other systems. And in this, you know, the desire to move quickly, we let people define it in silos, and then it can't talk to each other, you know, and it's sometimes the simplest thing, it's a customer. Okay, how do we define a customer, and where do we define what we need to know about a customer? You end up with systems that the same customer could have three, four different names and abbreviations for the names, different contact information, and then you can't use it to really be consistent and start to draw conclusions across your different systems. So definitely we underestimate it, and that trips us up really hard when we do that.

And then I would say the second piece about the data, then you know, is that slow down to speed up, but we've got to work more holistically across the business, then in an effort to do that. It can't just be done by finance alone. It has to then be that broader partnership, and sometimes there's some give and take that happens between, oh, well, I'd really like to own it. That control in me would just love to own. It's my system. I'm going to define it. But you've got to broker it more broadly because that's also going to allow you to go more quickly. So, totally agree, it's an important but I'd say it's probably the more overlooked aspect in the beginning. And as with experience, you really realize how important it is to have that clean. And especially now, like you said, with artificial intelligence, it's making it mission-critical to have your data organized.

[00:09:12] Charlie X.W. Liu Do you think, because you mentioned someone needs to kind of manage the different data systems, silos, they have to broker those conversations, alignment across the business. Do you think that should be owned by finance?

[00:09:26] Melissa Howatson I don't think it has to be one group, but I think ownership is required to be designated somewhere. So to me, that's more important. And depending on the way the business is structured, it can be in finance, but it could also be in your IT or your ops teams. You know, to me, those are three potential logical homes. Wherever you put it, you need to resource for it to effectively have people who really know what they're looking at and who are wearing a company hat. Wherever you decide it sits, the other people are critical stakeholders in it anyway. There needs to be some dotted lines in terms of hey, we're together going to help define what this is and how it's going to work, because none of those teams, just again operating in a silo, is going to make it make sense.

[00:10:15] Charlie X.W. Liu I agree with that. I also think it depends on the industry, the sides of the organization. And I think it's a normal problem. It's a growth pain. I often see clients where they're asking about processes and data alignment, and having really clean data structure when they haven't even figured out the product or even sales or having product market fit. And I often tell them you're not going to fail because you have poor data in that state. You're going to fail because those parts of businesses you haven't figured it out. So what happens is often you have these departments, you have these functions of business built out, and data comes second, systems come second, tools, tooling comes second, processes come second, right? A lot of times, people talk about bad data. But bad data is really just a byproduct of bad data culture, right? But it makes sense because during that state of the business, the emphasis is on growth, profitability or happiness for the customer or the team, right? It comes afterwards. But I like the point that you brought up where you have to plan for it. You need to have an owner, right? If there's no owner, there's nothing gets done, right? And certain companies I've seen finance own everything. Recently, I think in the last seven, eight years, I've noticed that revenue has started splitting out. I remember when I started, it all used to be under one roof. Now you have revenue, revenue ops, you have finance, we might be more on the expense side. Companies that have inventory supply chains. They might have a data or operational teams as well. Some companies, if they're small enough, they have someone that owns everything. Some companies, as they get bigger, they have owners for each kind of each silo or each department of that data ownership.

[00:12:11] Melissa Howatson Yeah, and I think it for me, it's also comes down to the blast radius of the data. There's certain data elements that it's easy to say, okay, this is it. You can sort of decide the rules of engagement because it's not going to impact other parts. But where the blast radius gets big because it's something that multiple folks are using. You know that's becoming a problem when you have people showing up to meetings with different answers to the question and contradictory data that's coming out. That's when, you know, it's so discouraging to be that finance person who's showing up, and people are just questioning what you're saying and questioning the data because a different system is saying something else. And you don't even get to the analysis, or the insight because you're fighting about, is this accurate data? That's the kind of stuff you want to then just clean up, agree, okay, what is this? What is it going to take to have accuracy and not multiple people running different reports because nobody's believing one another's reports? That's not really rewarding for anybody.

[00:13:18] Charlie X.W. Liu I've sat in soul-crushing board meetings, especially early-stage companies, where the board is just challenging every number you have because they saw a different number a week or a month ago. It's awful. Do you find that businesses can be slower or less agile when finance doesn’t own their own data?

[00:13:38] Melissa Howatson I think there's an aspect of this that is slow down to speed up. But you've got to understand the trade-offs. So it might appear slower because I can't just do what I want to do, set this up now. I've got to wait maybe for someone else to set up the customer, set up whatever it is. But you feel the pain on the back end when you have the discrepancies. You're entering data in multiple places because you haven't been able to integrate them. And so it's that it's where are you slowing down? And I like to step back and look at the whole system. Is it working quicker because you've actually come together to put this together? So I would dispute the fact that, oh, well, if I don't own this, it's like systems. If I don't own the system, it's going to slow me down. You're going to handcuff me and get in the way. Well, if we're finding that, if you're feeling that, let's talk about why. But also, I would challenge, is it really, or do you just think you're moving quicker because you're doing a lot of busy work? But actually, I could eliminate some of that work if we took the time to build this out. So, and I think that's a natural then, you know, we talk about data. Well, there's also then systems. And that was the next part of the trifecta. So, how do you think about systems in this? And what advice would you have on looking at that?

[00:14:58] Charlie X.W. Liu For systems, I think most people think about tooling, right? I think it's the aspect of tooling, but it's also the processes as well. Even in definitions, when a contract starts, when a booking gets booked, when a sales process gets completed, people have kind of different definitions around there. Where I'm getting to is I think it's important to sit down with all the different stakeholders, kind of map out how the data should flow. It's important to have requirements kind of documented as well. I learned a lot of this from kind of building software products. It's really important kind of to document the requirements, the definition, the outputs and the inputs.

It's really easy to want everything. You think the business going to is going to be in this state next year. You want to make sure that the systems you set up, the tooling you put in place, can scale and grow with you. Find out you're going to have far more success, being very lean on your requirements. Do ask the questions, right? If we double, triple or 10x the business, where's the ceiling of these tools? It's important to know that, but you might not make it there. The business might pivot, might change, right? So I think it's important to kind of define what are the core requirements that you're trying to deal with these systems today. How is it going to interact with the other systems, the other teams? What are the requirements that we could potentially have in the next year or two? Focus on that. And I think it's also really important to have a list of non-negotiables. And a list of negotiables. There's no perfect tool out there, right? We can hope for is having most of the non-negotiables covered and some of the negotiables.

[00:16:55] Melissa Howatson So you've talked about systems there. Let's move on to finance, which was the first one. And like you said, a lot of people talk, people, process, systems, but you've got finance. So what do you mean by finance?

[00:17:10] Charlie X.W. Liu It’s the financial side, it's the accounting side. But I also think it's the business acumen, the business partnering side. So I came from data. One of the reasons why I left just pure data after a few years. What I realized was, a huge part of the industry or the folks I used to work with, they get really stuck up with the data they're looking at. They don't understand the business aspect, they get really excited. There's core relations here, there's potential causations there, but they forget about the point of these exercises. So I think it's really important in all these talks, these systems, this data, but it's it's to understand the business goals that we're trying to accomplish. You often hear this you have to be a good storyteller to be good in finance or FP&A. I will take it to another level. I have to I would say you have to be a good story seller. You have to take the insights, and you have to be able to sell it to your business partners on the other side, whether it's in sales, operations, CS, etc., etc. You have to sell them the insights for them to actually make it actionable, right? And I think for a lot of businesses, they see finance as a cost center. It's a necessity. But I've seen businesses where there's a very strong partnership with finance. They're really agile. They can find hidden gems in the revenue or the cost side that you didn't have before they're just that much more impactful.

[00:18:46] Melissa Howatson Now, let's move into our audience question segment. Here's the question. What's holding teams back from using their EPM tools? So, there's a couple of things, I think. One is the learning curve. Sometimes people don't want to invest in the time that it takes to understand what the system can do and how you might be able to harness some of the new potential that might have come out that wasn't there when you started with the tool. Or if we have changes of people into new roles, they don't necessarily want to take the time to learn what somebody else has built. But it's always worth the investment to take that time to learn what you have and what the potential is because you might unlock new things that you didn't know that you could do. And the second one is disparate data. It's easy over time to start to have different data sources creep in, potentially conflicting data that happens.

If you don't stay strict on your data hygiene and understanding what a system of record is going to be and how you're going to use that data, integrate it into other systems so you're not duplicating and potentially creating errors in the data, then you start to end up in a situation where you're going to meetings, you've got a report that contradicts what someone else is running. And that's never a good feeling. And it can make you want to abandon ship. Instead, that's a good indicator that it's time to do a data cleanup. Look at your hygiene, look at your systems of records and starts to connect the system so that you can avoid the duplication of effort that's probably going into putting that data into multiple places. Third one is insufficient implementation. Sometimes because you want to move through it quickly or because of budgets, you might cut some corners. When you're doing that, be deliberate, understand what it is that you're sacrificing or pushing out to a later phase and have a plan to go back and address those subsequent phases or clean up the deficiencies later on down the road. You don't want to just forget about them and find yourself disappointed because you didn't see the implementation through fully from what you envisioned compared to what you actually have done. And so as you're phasing it, potentially, you know, it's not a re-implementation, but it is putting the energy into continuing to advance your project, advance your use of the system as you go so that you're not starting to feel disappointed or worse, others think are feel disappointed because they thought you were on a path for one thing, but what you delivered looks very different.

Well, if you think about it, finance sits at the intersection of so much in the business, and we have this privilege seat that we get to see more than others do and we can take it for granted that they see what we see. And I agree with you, we could pump out a bunch of data reports, but without us actually stopping and saying, what's the so what of this? What message do I need to sell? How am I going to influence people to see what I see? You have to have a way of showing it to them in a way that helps you to get the point across. Because not everyone's going to come to the same conclusion just because I showed you a bunch of tables and data in a slide. And I can say, well, but I told you, you know, didn't you see? It was on slide 53 in this table here. But it really is moving, you know, did to that strong partnering is where the magic is for finance, because we're able to take what we see, help the business see it, help drive better decisions because, we put it together with the business understanding that whoever we're partnering with, be it the sales organization or marketing organization, to say, hey, based on this, what do you think? And then they might bring something else that they're seeing to the table. And it helps just helps you to inform and drive better business outcomes. And that's the fun stuff in finance, where we're actually driving real business outcomes.

[00:22:44] Charlie X.W. Liu Absolutely. I think it's a really exciting role. And I see there's an uptick in demand as well. You can see online. I saw on Reddit. There's a lot more folks asking how do we get into finance. And I think the big part is how do we be a value-add, how to be an effective part of the organization? I notice as companies evolve, certain times they have data team, ops team, but I've seen a lot of businesses where the finance team were able to kind of fish out insights that wasn't available before. I was actually talking to the head of finance at Airbnb in, this is in their earlier years. They have a whole data science team now, but earlier years, if you think about the search engines they have for the locations and the geographies and the filters, much of that actually came from the finance team. So the finance team was able to drive insights back into the product team to improve adoption across customers. And I find that really exciting.

[00:23:57] Melissa Howatson And, it's interesting because you say people getting issued in finance. It's also been a bit of a crisis in terms of some, especially new grads steering away from traditional roles in finance. And there's been lots written about, you know, changing the requirements to get into finance and how do we attract? And I do think it's we've undersold it in terms of what it is and actually where it can sit in the business. It's getting out of the weeds of grinding through the data and focusing more energy on the insights and the so what. And now we've got AI coming along. AI has been around for quite a while, but it's starting to really show some impact. How do you think that AI changes the game when it comes to this?

[00:24:42] Charlie X.W. Liu We run a lot of events. That is often the first topic people want to discuss. What am I seeing? How do we adopt it properly? How do we get ROI on it? I think for me, the way I think about it is you have to embrace it. It's coming. It's like when all the tools went cloud, right? This is, I remember this is roughly I think 16, 17 years ago. You can't fight it. It's going to be here. If not, it's already here. Different aspects. First, I think it's just general adoption. How do we get it into the hands of as many people as possible within a team? Even if it's not improving necessary analytics, operations within the team, individual members of your team are just going to be that much more effective, right? I mean, I think a lot of people are writing emails with it now, right? It's going to, especially we're talking about storytelling earlier. If you know what you're trying to get across, but you don't have the linguistic skills to write it out, it can help you with that, right? I can get the point across. But I also think it's just such a strong enabler for helping you learn whether it's the data stuff, whether it's systems, whether it's asking the right questions, it's going to make your team that much more effective. And I also think the second part of this is putting together the strategy to implement AI properly. What are the goals? This almost goes back to what I was saying earlier, right? Who are the owners? What are the goals? What are the definition? And then you can work backwards from that. If your data's not ready, your systems aren't ready, you're not going to have very strong return immediately, right? How in those cases, then I will recommend how do you incorporate AI to your individual users for part of your FP&A team or finance team? How do we improve the existing processes today? Systems, documentation, communication. And then how do we then incorporate AI later?

[00:26:43] Melissa Howatson So you think it's a bit of an assessment of the readiness of the team and make sure that they're matching that?

[00:26:51] Charlie X.W. Liu Yes, I was talking to a CFO a few weeks ago, and she was telling me her parent company forced it basically down, so everyone had to go implement it. It was not implemented with thought. Change management was not thought through. And she was telling me these security protocols, protocols with it, wasn't done properly. So there was no retention or memory or context. So basically, if you asked it some questions today, it completely forgot about the next day. So it was actually less than useful. She was spending all her time trying to correct and to tell the tool what they were doing with the tool, what they were doing with the company on a daily basis. Right. So I think a lot of it's figuring out where you are. What are bite-sized achievable targets that we can do with AI? It's like all systems and technology, right? And then go baby steps, right? Crawl, walk, run.

[00:27:57] Melissa Howatson So what advice would you give to finance professionals in companies right now in terms of what skill sets they might be looking for hiring or even how they're structuring their teams?

[00:28:08] Charlie X.W. Liu I think most good leaders don't look, and this is historic, I think historically most good leaders look for someone who’s hungry to learn, who's adaptive, and coach them the skills, give them the experience to kind of mold them into kind of the roles or requirements. I think that's truer than ever. I think the old mentality of hiring generally hiring someone for specific skills, I feel like it's probably less effective these days. Because there's so much where AI can bridge that gap. Earlier, we were talking about storytellers being able to have the influence, be able to sell kind of the insights. That's a strong requirement within finance or FP&A. The other side is the data systems side. I think most people lean towards one or the other. But with AI, right, you can close that gap on the other side. The storytelling aspect was always a weaker part of me. Had to learn it, right? But now I get a UCI. I can use it almost as an advisor, right? Did I ask the questions? Does my hypothesis have any gaps? Please poke holes in my hypothesis, right? And they can make that storytelling aspect much stronger for me, and vice versa. Right. So, going back to your question, I think it's important to find folks that are comfortable adopting new technology. They can be resourceful, right? This tool can help you bridge those gaps, help you enable the team, help you learn that much faster. If you find those individuals, even if they don't have the necessary experience or background, they can utilize these tools off the shelf, right, to get to where you need them to get to.

[00:29:58] Melissa Howatson Well, and it's interesting because you know, one of the things that I'm sure you hear, I certainly hear is this concern about okay, which jobs to be done is AI about to eliminate and the threat that it is. But the opportunity that I think comes with that is the ability for people to start to wear more hats and try more interesting, new, exciting things. Because I might not need to be so pigeonholed into just one aspect of something. Let's say it's maybe in the past it was treasury. Well, now maybe I can still do treasury and be amazing at it, but I might have the bandwidth to take on something else to help with the general accounting. And I do think, you know, for folks who lean into this and see it less the threat, but more the opportunity, those people will continue to find places to have impact in their business, and businesses would be very smart to continue to foster that to help people to get those. And so, I think people will get some more varied and different experiences that can be very exciting for them if they're open to the possibilities.

[00:31:09] Charlie X.W. Liu I personally feel like we're going to have a bigger impact on the accounting side first. We're already kind of seeing it. What that means is for all the accountants out there, right? I think you should embrace it. It means less account rec, less manual work, right? And then you can start exploring more aspects of the business. You can start asking better questions in terms of what data am I looking at, right? You can have better conversations. And this is where you can, you actually start to move into finance a little bit, right? And I think it gives you the tooling that you may not believe you've had before for a lot of people. I think a lot of us kind of forget the human aspect. And it's hard doing repetitive work week after week, month after month. It's really exciting where you can eliminate some of that, right? And have more meaningful work. Or at least, if not, go home a little bit earlier.

[00:32:02] Melissa Howatson So Charlie, lots of great advice. You've shared lots of great insights. If you could pick only two things from today's discussion that you would want the audience to remember, what would they be?

[00:32:13] Charlie X.W. Liu Assess where you are first across the board. Your goals. I think it's actually important. Your goals, the businesses’ goals, the state of your systems, processes, data, before you go out and jump onto a tool. I think there's too many people that think a tool is going to fix the problem. Figure out what that looks like first. Have very good documentation on your goals, your requirements, who are the owners' strategies around there, and then you can go execute on whether systems, processes, tooling, or even hires. I think that's the first one. The second one, I think, is I mean, we're talking about AI, right? So if you're not using it every day, you should, right? Whether it's to learn something a little bit faster, whether there's some aspect of your job or a task that you don't understand that maybe someone else is doing, and you never asked the why or the hows behind it. Be curious and look into it. Leverage AI for that.

[00:33:24] Melissa Howatson Charlie, thank you so much for this discussion today. Really appreciate you coming here to share your insights. Now, whenever we have a guest on the show, we do have two rapid-fire questions. So, are you ready?

[00:33:34] Charlie X.W. Liu Yeah.

[00:33:35] Melissa Howatson Okay, the first one, what is the hallmark of a mature finance team in terms of how they operate?

[00:33:40] Charlie X.W. Liu There's clear owners for different tasks and processes, and they know their gaps and pain points, and weaknesses.

[00:33:47] Melissa Howatson It's a good one. And the second one is, what is a book that has had the greatest impact on you?

[00:33:55] Charlie X.W. Liu I'm reading a book called Unreasonable Hospitality right now. Love it. There's a line in there which is, how you do one thing is how you do all things. I think about that daily.

[00:34:06] Melissa Howatson Good advice. I haven't heard of that book. So I'll have to go and look that one up. Again, thanks so much. Really appreciate your time today.

[00:34:13] Charlie X.W. Liu Thank you for having me. Appreciate it.

[00:34:15] Melissa Howatson If you've enjoyed this episode, we'd love your support. Follow the show and leave us a rating or review on Apple Podcasts or Spotify. It's one of the best ways to help more finance professionals discover us. For The CFO Show, I'm Melissa Howatson. Until next time.