How to get the most out of your expert service providers.

Addressing your business goals can be daunting, especially if you’ve had to make tough financial decisions or even when you’re poised for growth. In most cases, particularly at small and mid-sized organizations, you likely don’t have the headcount to easily make things happen.

Imagine a CIO who works with your executive team to establish and maintain a technology roadmap in alignment with company goals and objectives, or a CISO laying the groundwork for a rock-solid cybersecurity program to execute, or a controller who manages your books for the same number of hours at the same time each month – all at a fraction of the cost.

On March 10, 2021, Jim Herrmann, Chief Information Officer at Briggs & Veselka; Mike Trpkosh, Director of Cybersecurity at Briggs & Veselka’s subsidiary, Pathway Forensics; and Kevin Stewart, Advisory Principal and Client Accounting Services Practice Lead at Briggs & Veselka, discussed how to leverage outsourced and fractional services to streamline and optimize business operations and manage risk.

Key Takeaways:

  • A fractional service helps identify symptoms in any business that is experiencing any sort of significant change, turnover, increase in revenues, new contracts, control breakdowns, fraud, or anything that may indicate that it’s time to bring somebody in to advise on how to add value back into the business. In simple terms, it is trying to provide clarity to you as the business owner to make better decisions.
  • Misconceptions about each practice area:
    • Accounting – When people think of accountants, they think of bookkeeping or debits and credits, or even just documentation. When hiring an accountant, you are hiring their experience in assessing an organization and understanding the risks. You are not just hiring that individual; you are hiring the full team, including more senior members as well as experts in other specialized areas needed to better understand the task.
    • IT – In the IT world, clients feel as though the IT team is not performing their job well when they bring in extra help, but that is incorrect. The IT team may need a certain skillset that they simply do not have in-house, so they bring in a resource to do the best possible job on that specific project.
    • Cybersecurity – Similar to IT, cybersecurity will bring in contractors for their expertise on a specific task that is already defined for them. With a fractional service, an expert may be brought in for strategic issues, not operational, to look at the overall landscape and identify some of the operational inefficiencies or even to evaluate a contract.
  • When a company first starts using cybersecurity fractional services, it is best to start by telling the hired cybersecurity team when you last performed an IT or cybersecurity risk assessment. This will help the team identify where they should focus and the risks within that area. This also allows them to better understand your priorities, how they align with your business goals and objectives, and what to address first.
  • It is especially helpful to reach out to bankers, attorneys, tax accountants, auditors, or anyone else that wants to give you advice that you did not have before. It also enhances that relationship because the advisor will feel valued by you and are more apt to provide better insights that you might not identify without their perspectives.

Read the transcription here

[Ilse Rew, Briggs & Veselka] I’m Ilse Rew, Chief Operating Officer at Briggs and Veselka. I’ll be serving as the moderator for today’s panel. This is our second cyber and IT fireside chat, and we threw in some accounting as well. Three of our experts will discuss how to leverage fractional services to achieve your business objectives with less overhead. We’ll start with a couple of housekeeping items before I introduce you to our panelists.

You are muted so please submit any questions for our panelists in the Q and A box found at the bottom of your zoom screen. We will provide CPE as applicable in the weeks following this event. If you have any questions about CPE email marketing@bvccpa.com. There’ll be three poll questions that pop up on your zoom screen during the discussion. For those seeking CPE credits you’ll need to respond all three poll questions to be eligible for CPE. Even if you’re not seeking CPE credit, we encourage everyone to participate in the polling. We don’t have slides for today’s event however we will make a reporting of this discussion available after the event. Keep an eye out for that reporting in your email box in the next week or so. Okay, before I introduce our panelists, I want to make a quick comment. When I started at Briggs and Veselka we had a mixed bag of full-time employees and outsourced services across all our operational areas. As an example, our IT and cyber were almost completely outsourced while our marketing and accounting efforts were 100% in-house. one of my main goals was to ensure that I identify where to bring talent in-house and where to rely on fractional services. That mix which is constantly changing, allows for better business continuity, access to knowledge that I can’t afford if I have to hire and important for me ongoing innovation and improvement.

I’m definitely luckier than most on the accounting IT and cyber side to be able to rely on our three panelists for expertise and ongoing discussion to help me think through and adapt as market conditions change. We sure have seen market conditions changed these last 18 months. Okay let me introduce you first, we have Jim Herman, Chief Information Officer here at Briggs and Veselka. Jim has more than 27 years of career progressive responsibilities in the IT vertical. Giving him the ability to perform with agility, adaptation and resilience that has proven paramount for continued success. Known in the industry as a turnaround expert, Jim has successfully executed countless continual process improvement programs resulting in materially significant gains in IT cost savings and avoidance, as well as business process efficiency and effectiveness across operations computing environments and teams. Jim previously worked for organizations including IBM, FMC Technologies, and Noble Energy. He currently serves as a trusted advisor and partner to organizations across a variety of industries. Welcome Jim.

[Jim Hermann, Briggs & Veselka] Morning everyone.

[Ilse Rew] Next Mike Trpkosh, Director of Cyber Security and Pathway Forensics, a Briggs and Veselka subsidiary. This one’s a mouthful so bear with me. Mike is a certified information program security professional, certified information security manager and a certified information systems auditor. He has extensive experience in client management, security software, implementation risk management and auditing, business impact analysis, system application, business continuity and disaster recovery and governance and compliance. Prior to joining pathway, Mike worked in the IT space for 30 plus years with the last 15 focused exclusively on information and or cyber security. He served in organizational leadership roles as Chief Information Security Officer and has worked with other CSOS during his time as a cyber security consultant. Regardless of what side of the table Mike is on he enjoys helping organizations develop effective cybersecurity programs by addressing risk and creating a cybersecurity conscious culture. Welcome Mike.

[Mike Trpkosh, Pathway Forensics] Thank you, Ilse.

[Ilse Rew] Finally, we have Kevin Stewart, advisory principal and client accounting services practice here at Briggs and Veselka. While he’s not a cyber or IT guy, Kevin is a CPA who manages our client accounting services practice which is dedicated to putting the right financial systems and processes in place to get you through the tough times and support your business growth. Kevin brings over 20 years of experience turning around and building accounting and finance teams. He has repeatedly built confidence among executives and board leadership by increasing the integrity and standards of the finance and administrative functions, enhancing management’s understanding of operating results and improving the quality and predictability of financial information. Additionally, Kevin has helped improve company performance by successfully managing collaborative efforts with sales marketing, IT, and operational departments to increase their effectiveness. Welcome Kevin.

[Kevin Stewart, Briggs & Veselka] Thanks, Ilse.

[Ilse Rew] Let’s jump right in, my first question is to Kevin. What makes an organization a good fit for utilizing fractional services and what might motivate someone to seek out this type of approach?

[Kevin Stewart] I think the thing that we see most when we get approached or when we recommend clients approaching us or someone like us is when they’re experiencing significant change. That change a lot of times is growth. They’ve had a bump in revenues, they’ve got additional contracts, they’re really taking off. In the example of getting in front of your skis sometimes that happens a lot, that back-office area and that accounting. The organization that could support a one-million-dollar business may not be the same organization, team, or talent that could support a five, seven or ten million dollar business and kind of growing. But then on the other side of that coin is when the business retracts, when there needs to be new financing, or the business is reduced for various reasons. There tends to be a drive to or need to engage somebody to come in. Rather than hiring a full-time one person at a 120 0r 150,000 dollars or whatever that number is.  You could bring somebody in on the advisory side on a just-in-time basis to help evaluate and get clarity to make good decisions.

Recently, when I say recently, last six months or so, we’ve been approached by a handful of clients, prospects now clients where in the specific instance it was a medical practice and they grew the business very well. About seven to eight million dollars in revenues but they’re looking to step out, they’re wanting to maybe exit through a transaction in a couple of years. But really wasn’t sure that they had the ability to step away because the couple were really kind of the central figures of it. So if they step away then is there a management team in place to then kind of transition? So when we stepped in there just to help advise on how do we help them transition out in two years, he was evaluating the team, evaluating the processes and as we did that. We weren’t really digging into financials that much it was more around the overall process, the team, the operations but when we did that we identified a lot of symptoms. Symptoms that had problems beyond financials and so there was some issues where something was taking a lot longer than anticipated and when they were getting it done the information wasn’t exactly good and valid. As we dug into that a little bit more we brought in across the firm on the data side, are we getting the right reports, are our systems connecting correctly and we had concerns because it was healthcare our some of the things we were seeing didn’t seem exactly right and so we brought in Mike to evaluate on the cyber side.

So what a fractional service can do a lot of times is we’ve seen a lot of different clients, Mike has 30 years’ experience, Jim has 27, I have 20 plus. We’ve seen a lot of things good and we’ve probably seen twice as many bad. So when we see symptoms we know how to potentially treat it or what the potential issues are so we engage others as necessary. When we bring that all back really any business that is experiencing any sort of significant change, turnover, increase in revenues, new contracts, control breakdowns, fraud, any number of things that may be the right time to bring somebody in like me, Mike, Jim to really just advise. As we go along it may be as we’re advising uncovering additional things of just being able to add value back. Because what we’re trying to do, we’re just trying to provide clarity to you as the business owner to make better decisions. I guess with that Mike or Jim you might add your perspective on those types of instances.

[Jim Hermann] Yeah I’ll jump in real quick Kevin. So definitely what we’re seeing on the IT side of the house a lot of times is that people don’t really understand what fractional services is. It’s not a new concept in business, it’s just gaining momentum in the last few years. I think what we’ve seen in the last call it 11 months heading on a year now with the pandemic that we’re up against right now that it’s becoming critical to businesses. Any business can fit and is a good fit for the fractional model. Because you have a talent pool or you have a team in place that is keeping the lights on doing a great job every single day and then something like the pandemic hits which nobody could be prepared for. In B&V ourselves same thing to your point we had to be very agile, we had to pivot very quickly, make sure that we prepared to go remote. We’ve been working remote very successfully for the last eleven and a half months but now the topic has shifted again. As the CDC loosens its guidelines a little bit we’re looking at return to premises. So what a perfect example of maybe a smaller company or a company that’s just not built to scale today to say hey I need some help and how do I do that. You don’t necessarily have to go out and find a partner that is going to be all in with a massive contract up front where they’re going to take over all of your services. Why not just supplement your team where you need it? Bring some talent in, bring some folks in that understand what this looks like that have been in smaller and larger organizations and maybe even seen massive risk like this to an environment where we can come and we can add what we see in our experiences to the mix. We’re not looking to you remove anything that’s already going on, we’re looking to add to it, we bring value and we bring value in increments. Those mints are whatever you’re looking for, it could be a lot or it could be a little, could be long term or it could be short term. That is the advantage.

[Kevin Stewart] I think with that Jim I don’t know what people think about when they think of fractional services but really what you can get the benefit of it is you can get big company controls and processes in place and a small entity at a fraction of the cost. It’s not that you have to hire a whole team to do something right or if you are hiring a whole team you’re hiring a whole team at a fractional basis versus bringing all that in-house so there’s just a kind of a cost savings with that. I guess the other piece I would maybe mention is I think sometimes you know when one thinks of Kevin Stewart or Briggs and Veselka it’s an accounting firm, we do accounting, we’re accountants, we’re counting mutants, the accountant.

So when we do the accounting work and then we think of Jim it’s IT and we think of Mike we think of cyber security. I think really what we would like to change, I’d like to change the concept is, really I’m a risk advisor I approach it from the accounting side you approach it from the IT side and IT might approach it from a from a cyber side but it’s really risk advisory, helping you as a business owner, understanding your risks and then recommendations of what you can do to protect yourself from either mistakes or fraudulent activity.

[Mike Trpkosh] Kevin, you’re exactly right, you hit the nail on the head when you said organizations adjusting or adapting to change. Jim with the pandemic you’ve seen a lot of organizations that might have had initiatives started or planned that they had to put on the shelf because of the pandemic and maybe they don’t have the funding or possibly the business case now as they’re trying to get back to some sense of normalcy but they still feel that that initiative was important that’s a perfect opportunity for a fractional service. You bring somebody in like one of us that we basically take a look at the entire landscape within an organization. Kevin when you said we’ve seen a lot between the three of us and we can quickly identify a potential risk before it really manifests into something bad for an organization.

[Ilse Rew] Sorry I want to interject because you’re saying something that I think is often missed and I’ve had this discussion with you as well. Social security as something frightening and big and a massive undertaking and something that I don’t think everybody here has had the benefit of is hearing from you how you break it down and make it palatable and easy to understand and easy to understand what to implement in the organization. I would love if you would touch on that because that has been very helpful I’ve seen to other businesses to operational business leaders that we’ve talked to.

[Mike Trpkosh] Sure, so one of the things that I’ve learned throughout my career is just like you said cyber security if you don’t know what it is it’s terrifying to you. So my job as a cyber security leader is to take the technical or the risk components and turn that into a language that the executive team can consume and understand. What I mean by that is everyone in a leadership position within an organization they understand risk. Risk converts to dollars and cents, so my job is to turn a cyber conversation into a risk conversation. A lot of times with these fractional services little things something as simple as formalizing what you’re already doing, developing policies and procedures, documenting what you have, that ensures that things are documented, they’re in place and they’re repeatable. That eliminates a lot of potential for risk. Converting a conversation about a gap and turning that into a risk conversation that then we can talk about. Here’s what the ultimate outcome would be if that’s exploited, that could cost you this, reputational damage, it could be just a pr nightmare for you, those types of things that’s what translates quickly and easily from a cyber security technical conversation to a risk conversation.

[Kevin Stewart] I think what you’re saying there Mike is really what you’re trying to do is trying to simplify things down to a point where it’s just easier to see and view to make good decisions. Accounting and IT is the same way if you can get things into repetitive recurring consistency type thing then your focus can be on those things that are outliers versus trying to sort through the data mess to figure out what is it we need to do next. That clarity is just a frankly that’s life that’s not just accounting business, if you can get clarity, if you can sort through the smoke. Our goal is to get the smoke away and get and get clarity to you so you can make better decisions and know what you’re doing and that’s integrity and for you it’s cyber security and for me it’s the accounting stuff.

[Jim Hermann] I couldn’t agree more guys. I mean that’s the reason why the three of us came together today and kind of built on this chat that we’ve already had maybe a month or so ago was just that. Many times we’re out working with clients or maybe even working internally through our own challenges and we realize that at any given time all of our processes dovetail into each other. When you’re looking at

something like fractional services as an option it’s not just the agility to maybe turn it on and turn it off as needed but it’s the breadth of the talent pool that might be available to you. When you’re working with a larger firm, maybe a firm like Briggs and Veselka, where we are we have the CPAs, we have the audit advisors, we have the business advisors, we have banking advisors, we have IT, we have cyber. We all look at the client in one holistic picture right and say we’re working on this right now but Mike I might need you to step in over here and help me work on some cyber policies or practices with them. Kevin I’m gonna need you as well because a lot of that stems from accounting risks. I was on a call with a client yesterday, a mature client, they’ve been in business for a long time and we actually fleshed out exactly what Mike was just talking about which is they are running a nice tight ship. All of their policies and practices are in place, they haven’t revisited them in about five years. Not just the pandemic but that aside you really need to look at these things every single year. The problem is they were so busy doing such a great job keeping the lights on and reacting to not just their customers but their internal customers, their own business and keeping them strong and productive during a pandemic that tends to go by the wayside. Perfect example of maybe a situation where you bring somebody in from the outside, this is a different set of eyes and maybe just to move that little piece of responsibility over and say we’re going to let this group take care of this and help get these documents squared away help them be republished re-communicated to our customers we communicate it to our internal folks just to make sure that we’re protecting ourselves we’re mitigating every risk that we possibly can. It was a great call and I think that’s exactly what they’re going to do is they’re going to look at some fractional services to just come in and supplement.

[Mike Trpkosh] Jim and to add to that when I was talking about converting to a risk conversation what you’re talking about right there is a perfect example where you’ve got practices that are in place within an organization but it’s not formalized, it’s not documented, it’s maybe evolved over time to something else other than what was documented in the past and if that person that oversees that leaves you now have a huge gap because it isn’t documented nobody knows what exactly the right order or the right steps to follow in order to fulfill that that person responsibilities. Now what you’ve got is a time gap and that time converts to dollars and cents. It’s very simple how to take those conversations and start them from something that seems very benign or very simple and extrapolated out to where it actually impacts the organization’s bottom line.

[Kevin Stewart] Yeah the medical practice I was talking about earlier, one of the things when we got into it they believe that they are potentially understaffed. They didn’t have enough team members to do the work that was in front of them but when we got into it and we started looking at well this system is not connecting to this system. Because of that you’re having to do a manual process well that manual process is taking you 40 hours a month and then we look a little further it’s like well you know if you just have this control on the front end you could potentially save another 15 to 20 hours a month. When we got through the process and it wasn’t exactly part of the assigned project but the benefit of it when at the end of it was we found out there probably maybe a little bit overstaffed. So then it became it wasn’t a matter at that point then all right well we need to fire somebody, that wasn’t the point at all it’s like well where do we shift the attention to then. If we freed up 120 hours and that’s a full-time equivalent person. Then maybe we can shift Ashley, Mike or whoever it is to another area to help with the business to do something new, to do something different. I think what Covid last year allowed for us to do even as a firm is improve as a firm because it forced us in some ways to evaluate some processes and systems and whatever else that we probably wouldn’t have done if everything would have been kosher and normal. We actually became stronger I believe because of it and so when we’re evaluating businesses it’s evaluating processes, businesses, people, kind of all that together as we’re advising in a fractional way we can use these opportunities. Even if even if revenues are dipping down or something hard maybe we need to look at something else to do some things a little bit differently and you’re not going to get that advice potentially if you’ve got a full-time person there because they have this kind of narrow vision. They’re trying to survive, they’re trying to do what they need to do but this outside perspective really can shine a lot of light on things to do better and differently and actually improve in a downtime a down period.

[Ilse Rew] I know you’re touching on something that is actually one of the questions I wanted to ask you. What do you think the biggest misconceptions are? I actually want your perspective because each of you are coming at this same problem from such a different angle. I would love to hear what you see as the biggest misconceptions for each of your practice areas.

[Kevin Stewart] It’s two different things really. I mentioned this a little bit earlier. I do believe when people approach accountants they’re thinking bookkeeping or they’re thinking debits and credits or even thinking just documentation and who gives a crap about documentation. Well I kind of do but it’s not the most important thing. That misconception is you’re hiring me as an individual, you’re hiring me as a practitioner. But really what you’re hiring is you’re hiring the experience and it’s not the experience exactly to the debits and credits you’re hiring experience to assessing an organization and understanding what risk is. I think the biggest thing is it’s not just about numbers, there’s a people aspect to it, there’s a systems aspect to it and what we can bring to the table is more than just the accounting piece of it. The other side of it too is I don’t think folks are understanding they’re hiring a firm versus an individual. I’m  trying to get my team in front of a potential prospect because I want them to understand that they’re not just hiring me or they’re just not hiring Janna, which is a manager on my team, they’re hiring the full team and even beyond that. If I have a question that I don’t know an answer to and it’s in a specific industry I’m going to reach over to a partner, over an audit or tax or wherever the issue is, wherever that expertise is. It’s not that they’re billing an extra 10 hours it’s I’m reaching over for a conversation to get their understanding to pull back in. Really when they’re engaging us as a fractional CFO or their outsourced accounting function they’re engaging the entire firm that entire level of experience. I think in the bio, my bio specifically I think it refers to cross-functional work. I’ve worked with sales and marketing and operations and really what we do, and Sheila is a big proponent of this, our managing partner, is we’re quarterbacks, we’re making sure that we’re getting the right things in the right place and the right information and we’re bringing the right expertise to the table to really advise. You can trust if you engage us, if you engage me, if you engage any of us on this on this fireside chat that we’re bringing the whole shebang to the table to assist you. It’s a full outsourced practice and even if it moves beyond, all right well it’s just accounting, no it’s not just accounting I’m sorry to tell you right if I think you have a cyber issue I’m going to reach out to Mike, if I think you have you know IT concerns I’m going to reach out to Jim, if you have tax concerns I’m going to reach out to my friends in tax. You’re really getting and we’re providing that advice to you. I think the misconception is you’re hiring just me and I’m just an accountant and I am just an accountant but I’m also more than that too so that’s my perspective.

[Ilse Rew] Yeah I can attest to that.

[Jim Hermann] I think Kevin touched on so many points at Segway into the IT side which is throughout my career I’ve held internal jobs and you know in external type consulting jobs. Here where I am today I actually get to do both so it’s the best of both worlds. But I leverage that all the time. One of the biggest things I would say is a misconception when it comes to fractional services or any type of outsourcing in the IT world is fear. Whether it be a CIO afraid that if he were to bring in help it would be a poor reflection on the team that he’s built or the work that they’ve done or maybe it’s the team itself that sees a leader bringing in help and saying you know maybe we’re not doing a good job because they’re bringing in extra help when in all fairness that is nothing but a misconception. 99% of the time that I’ve ever brought somebody in for help it’s because I need a set of talent that I just don’t have in-house to do a specific job. Maybe it’s a project with a definitive start and a definitive end and this person is going to come in and help, maybe it’s strategic where I do want somebody to come in and be another set of eyes on what we’re doing and say hey take a look at what we’re doing here, tell me what you’re seeing in the

rest of the world because you tend to operate in a bubble a little bit, you’re within your organization, within your walls. How many on your team really have the time to reach out and talk to peers and be part of community groups and things to understand what’s trending and what’s the best way to handle something.

Often companies are just reinventing the wheel over and over again when it’s already been invented, and they just don’t have the ability to reach out and get help. When you’re looking at fractional services you can get that. Whether it be service desk type help, one of the biggest things is our service desk is whack-a-mole, that’s really what it is. You’re knocking down incidents as quickly as you can to restore service so that your business can be productive. Think about that work it’s very repetitive. We talk all the time about putting RPA in places where you know we want to remove the human and make things more efficient. Think of fractional services as the exact same thing, you’re not replacing somebody’s job, you’re giving them the ability to do a better job somewhere else something else that’s going to bring more value to the organization that you’re working in. Because you’ve let somebody else from the outside come in and take care of that. Most organizations that I’ve ever worked with or been a part of have that mentality at the top but for some reason it doesn’t seem to trickle all the way through, and you end up with what I would consider is fear. Don’t let fear ever be a wall that you can’t get around or get over because a lot of times it’s a perception that’s just false it’s not there it’s a glass ceiling. If you were to bust that glass ceiling and get through it you’d be amazed how productive your team can be and you being productive is a reflection on the entire team, reflection on the entire company and a reflection to maybe the customers that you’re serving every day. Mike are you seeing similar stuff on the cyber side of the world?

[Ilse Rew] I want to add a misconception that some smaller businesses think that when they’ve hired an IT person that covered IT. I think that you struggled a little bit with that when you started where you’re like no I can’t, I can’t be the network engineer and I cannot be the applications guy and I think that misconception exists as well.

[Jim Hermann] You’re right, Ilse. I mean that was a point that I tried to prove very early and thanks to folks like you we got through to our executive team where you can hire a generalist and they can hold the ford down right all day long. They can be your network engineer, they can be your CIO, your CISO, your service desk and they may do a good job. The problem is they’ll always be so busy that they can’t do a great job. It’s not necessarily that you need to go out and build an empire and have a massive IT team get some help where you can get it right whether it be tactical help or strategic help. It’s again turn it on turn it off as you need it. A lot of times if you’re looking at strategic help working with maybe higher level leadership or even the board having an outside resource come in and put eyes on things that are going on inside might actually give you more leverage. Because it’s not coming from within so it’s a different level of trust when somebody on the outside comes in they have their bio in front of the board and say hey I’ve been doing this for 30 years, this is what I’ve seen around the industry, this is I’ve seen other companies just like you do. I don’t think I’ve ever met an executive that said you know what I don’t care that you just told me all that, I want to do it my way anyway, we’re going to be a snowflake and we’re going to reinvent the wheel every time because where special sauce and that’s it. That would be ridiculous right? There’s always something that gives you the secret sauce that makes you successful but 70 or 80 percent of your business behind the scenes runs just like a peer of yours that might do the exact same thing in industry so get the help where you can get it.

[Ilse Rew] Sorry, Mike, you have a lot of misconceptions.

[Mike Trpkosh] So mentally I’ve got all these bullet points I wanted to check off for this question. I’m like okay Kevin touched on that. Jim touched on this. Ilse touched on this.  I’ve got to kind of piggy back on what Jim was saying. It’s a lot of times people the misperception is fractional or virtual services are contractors and contractors. From when I think of contractors I’m bringing in an expert in that one space to do one thing that I’ve already defined. Whereas fractional services I’m bringing in an expert and it’s not operational it’s more strategic. I’m bringing that person in in order to take a look at the overall landscape and identify some of maybe the operational inefficiencies or fractional services can be something as simple as come in and evaluate a contract that we have because we think we’re getting fleeced. It can be come in and oversee an engagement that we have to have for a regulatory requirement but we don’t have the experience to know what they’re supposed to do and that, or help us determine a strategic roadmap a growth path for the organization. Work with our CIO and understand what his vision is so that I can put together a cyber plan that parallels it or provides guard rails to make sure that it can perform as it’s supposed to and be as efficient as possible. The misperception that I would try to put down is it’s strategic instead of operational and it’s not just a contractor brought in for a specific thing. You’re bringing in someone with a 10,000-foot view that understands all of those operational areas.

[Ilse Rew] I think financially is able to have that discussion with you about hey this is a risk you cannot ignore right now versus saying hey we’ve got to overhaul the whole thing and I think having worked with each of you that is critical. Saying hey I’ve got a budget and I’m being held in my budget so explain to me, work with me and tell me what is the biggest risk that I cannot ignore and handling that. Okay so let’s move on to let’s say company is ready for fractional, ready to explore fractional services. How would you say, what’s the best way to start? Mike you were on the hot seat already. I’m going to start with you and then we’ll go to Jim and then to Kevin from there.

[Mike Trpkosh] In my experience when an organization decides that they want to test drive, or they want to try fractional services the first thing that I would do coming in is I would say when was the last time you had an IT or cyber risk assessment performed? What that does is that kind of puts borders or a fence around the area that you need to work within, and it helps you identify the risk. Then we logically progress to all right let’s put together a road map and then the road map leads to services so it’s a very organized approach. That I think is what we want to convey to any prospect or client. There is an organized approach to this. It isn’t just we’re starting to build tomorrow, and we’ll bill until you kick us out. That is not the approach at all it’s very functional and it’s very organized in how we come to an organization and say here’s what we need to do.

[Jim Hermann] Yeah I couldn’t agree more. I mean you got to start strategic if you can. So you’re meeting with your leadership, you understand where maybe your gaps are. At the same time folks tend to jump right in and start a bunch of different projects at one time. I myself throughout my career found myself being guilty of it. We’re working on you know 25 or 30 projects at a given time because they all need to get done. That’s what everybody will tell you, they all need to get done and they all need to get done now. Then the end of the year clocks and you’re rolling 15 or 18 different projects because you don’t you didn’t get past the 40 or 50 percent mark on most of them. You’re lacking the plan, the plan is the biggest piece of. It’s understanding where your priorities are, how they align with your business goals and objectives, and what you’re going to go out and tackle first. Now you might always have some low-lying fruit that’s important to just knock those out and get them squared away but then you might have some bigger strategic objectives that you need to meet. Maybe the business itself is driving that and that’s utmost importance right to make sure your business stays productive and you can continue moving forward. The plan for me is always the first step, if you just jump right in with both feet I promise you you’re going to swim until you drown because it’s just too much at any given time. Especially if you’re running with a lean team. A lean team is not going to have the time to do all of that at one particular moment or even a set of months that you’ve put aside to do it because there are all kinds of things coming from the outside that always disrupt what they’re doing every day. Putting a plan in place, looking at it strategically to see where you align, documenting that is super important and then begin to have conversations with folks like us, say hey you know we put the straw man together can you come in and help us. Mike and I love running assessments because it fleshes out so much information when we work with a client. We even do it internally as well on a regular basis because you got to have a checkpoint where are we, how did we get here, where do we want to go, are we on track, do we want to pivot maybe go a different direction, is it still as critical as it was when we started.

Sometimes people will hear me quote Ricky Bobby, which is a sad quote, but you got to slow down to go fast. It’s super important to slow down, take a full look at what’s going on in your business, look at your teams, make sure everybody’s in alignment and then go forward again. Having mike and I come in and just do a simple IT controls and cyber assessment is a very small engagement, doesn’t take a lot of time, doesn’t take a lot of effort on behalf of maybe the client that we’re working with, but it fleshes out so much information that basically we put together. We’ll help you prioritize what that looks like. I mean in the end it’s a really nice report with a bow on top and then basically you know we’re here for you right and that’s our end result. All right we’ve got you to the point where now you understand where your priorities are and what’s going on. What do you want to do about it and how are you going to do it? Can you do it in-house, can you handle it internally? If there are a couple other things that maybe you can’t, maybe you’ll lean on us and we can come in and we can help you with that.

[Kevin Stewart] Well any anybody who has a Ricky Bobby quote in a fireside chat, I think we’re best friends now so shake and bake shake and bake Jim.

On the CFO advisory side it’s a similar path. It’s not really significantly different. You want to start at a high level and you start to drill down and we do it in a couple of different ways. Depending on the services, it may be a phone call, maybe you’re looking at your financials and kind of seeing what you have, and then it’s making some recommendations on a minimal level. These are the things we think we could offer, where we’ve had a lot of traction recently, where we’ve assisted people. Different organizations have wanted to engage us and it’s like what’s it going to cost it’s like I have no idea what we’re getting into so how about this how about we engage for define the amount of hours. 16 hours, 10 hours we can get in, let’s interview some of you, let’s kick the tires on your systems, let’s get a feel for what we have. Look at maybe some of the problem areas that you think you have, look at some of the symptoms, trigly just a little bit. Then from that we can say all right so to your point, Jim, here are the things that we think you know should be addressed and here’s the things that we believe we could offer somebody else.

In a more rigorous we’ll call it a planning engagement or almost a scoping engagement and we’re at a reasonable fee, it’s getting in, it’s doing all those things, looking at the before, look at the recommended after and it’s providing a report. When you have that or in the ones that I’ve done, we’ve provided that report, here’s the steps we’ve done, here the things that we see listing them out, here the specific recommendations we think you can move to.

Some of those recommendations are it’s not hiring us, it’s maybe hiring somebody else, or maybe it’s shifting a resource from one place to another. It may be saying we need to consider upgrading a level accountant or hiring somebody in. So, there’s things beyond just us performing that service. At the end of that we give that to you, and we give it with the knowledge that you could take that report and those recommendations, and you can do whatever you want with it. You can go hire somebody, a competitor of ours, and do the same thing, but really what we’re trying to provide you is it is that test driving. You’ve seen the way that we interview, and we’ve talked, and we communicate, and we assess and how we look at things. We provide those recommendations and some of those recommendations will be, we can do this for you, we’re into it, we see it, we know, we can gauge, and we’ve built that trust.

I think what it does it is almost that courtship dating type area. It at a minimal cost it’s getting in, understanding test driving, seeing how you’re interacting, am I comfortable with it. Because when you’re hiring an executive, if you’re going to hire a fractional service you know with Mike, Jim, and myself, when you’re hiring that executive, you want to have trust. So, with that trust rather than just going out and spending $150,000 on somebody or $120,000 or whatever that commitment is for a year. We’re married now, we’re going to we’re going to stick this out. Why don’t we figure this out together, let’s build a relationship, let’s get some trust amongst each other and if it works great. We continue to serve each other, and we’ll help you get better that a relationship will increase and improve and whatever else.

But I do think that initial stage of it can’t just be an hour or two and we’re going to hire you. I just don’t think that’s the right choice, I don’t think it’s pragmatic, I don’t think it’s the right decision. Even by a $5000 or $10,000 engagement if that’s the number, remember just throwing numbers. That’s a reasonable cost because you’re getting value back, you’re getting good recommendations, you’re getting whatever else, but if it doesn’t make sense, it doesn’t make sense. That’s not some cost because you have a deliverable there to figure out all right I’m going to go to my board, I’m going to go to my partners, I’m going to go wherever else. These are the things that we need to drive and what we’ve done is we’ve provided that clarity to you from our perspective to kind of move forward.

I personally love that planning space, I love that area it’s helping strategize, it’s helping figure out. I think Jim and Mike you do too because it’s all we’re really trying to do is provide clarity to you of these are the recommended next steps. I would love to assist you to kind of execute these to the next steps but at a minimum I’ve given you great advice based on my perspective. When we do that, and I think Jim and Mike you could say the same thing, a lot of times there’s these aha moments with the clients, with the prospects because we’re presenting something to them that they haven’t thought about in a specific way.

So, by providing, shining a light on something, it almost triggers something they’re aware. I can flash back, we were advising a client out of Boston. It was a very significant, very large not-for-profit, they were growing and doing very well. Yet when you looked at some of their processes and what they were doing about 75% of their time related to something was very minimal immaterial dollar value things they were doing. When you broke it down, they really had basically three full-time equivalents doing this very non-value add type thing. When we shared that information – and I’ll try not to go into much detail here – when we shared that information with the CFO and his entire team, everyone was basically why are we doing this, and the answer was because that’s the way they’d always done it and that’s the way they were taught. But when you shine the light on this, you can choose not to do certain things that don’t add value and when we did that, they changed it.

That was an easy fix, and they reallocated those people to do other things, and everyone lived happily ever after, and you know wildest dreams came true and we all wouldn’t watch Ricky Bobby. There’s a lot of those types of moments, which is why it’s so rewarding when you can provide good perspective to others to make good decisions. Accounting is not necessarily fun, I’m not going to lie, but those types of things are fun because then you’re having a real impact on people, on processes, and businesses.

[Mike Trpkosh] One thing I’ll add, Kevin, to what you’re saying. When you talk about cost, you talk about hiring. Say for example in myspace a cyber executive. You may not need that person full time and that’s what you were pointing out. Instead bring in a fractional or virtual cyber leader. Have him outline what needs to be done and then you can contract that to another team that can do it but then you don’t have the continued cost of that cyber leader. Let them come back and check your status or check on your progress or make course corrections if they’re necessary or take a bigger bite out of your strategic map if you’re just killing it and knocking these things out. That’s the whole value of that in addition to the knowledge and the experience. You’re only paying for what you’re using, you don’t pay for someone to be there full time when they might only contribute 10 or 15 hours a month.

[Kevin Stewart] Yeah, I think with that Mike. When you have a team that team may be very good at executing the plan. They may be good at the transaction. They may be good at those functions, those tasks. But when it gets off the rails that’s not the same team to fix it. That’s why you need that level of experience at executive level the advisor to say all right it’s off track and here’s how we fix. It’s either going to be a system fix or a people fix, it’s usually one of those two things. But the people who are doing it gets off the tracks they’re still turning along, they’re trying to keep up and do but the process is broken at that point. The control is broken it needs to be fixed so you need you need somebody at a fractional level or at a full-time level whatever to kind of assess that.

[Ilse Rew] We have a question from a panelist and before I ask each of your input on it, it’s about the cost involved for the assessment and then assuming that I’m going to support costs based on services needed. I think that each of you have succinctly put it that there is that initial assessment and as an operations person who benefit from those assessments. I wanted to just jump in and say you do get that asset and I do see it as an operational asset when I get that assessment and I’m perhaps not able to deal with any of it or perhaps just one thing right now, but I own it and that’s the outcome of that assessment.

So, Jim I’m going to start with you but the discussion about cost is always ongoing and I know and we’re all clear on this webinar that you don’t engage us for an assessment, and it comes with a year-long commitment to work with us. I just wanted for each of you, and we have some free app resources available as well that Ashley put in the chat for us. But I do want to just quickly have each of you explain. Jim, I think you’re the one that hasn’t yet just how you start and then what the ongoing looks like after that.

[Jim Hermann] Yeah, so we did one just recently where it basically starts with an interview process. So, when we do an assessment it’s a setup, normally a spreadsheet or we’ll use the software to interview certain key folks within the business. We’ll do it within IT, we could do it within you know finance, we could do with an audit. We’ll work through those folks, we’ll capture all the answers that we get. A lot of it is really more engaging in conversation and understanding how they’re operating today and what that looks like. Then at the same time on the tail end of that conversation we engage very deeply about what they want to be in the future, where they want to be when they grow up and what is their nirvana look like if they could ever get there. Then what we do is we go back to our teams internally here at the firm and we kind of hash through all that. We’ll look at all these services and all these folks that we’ve talked about on this call and everybody chimes in and we all talk about it. That’s one of the things that when you’re dealing with fractional services as opposed to contractors, like mike had talked about earlier, there is no walls around the pool of talent and the pool of experience that are involved in assessments like this. We all pitch in, we all take a look at it and then we all flesh out what our recommendations might be and then we also look to help prioritize what those recommendations. Your average assessment would be done in under a two week period of time. Normally it’ll cost you under ten thousand dollars to do it. You said something that triggered in my mind Ilsa, the report or this assessment that we actually do in the outcomes of this assessment is an asset to you. So as a client that we’re working with and we provide this output, which is a lengthy report and then obviously a lot of conversation around that report and revisiting with the folks that you interviewed with to explain your findings and what your recommendations are we look for it to become a living document. It really helps you build your roadmap as far as even branding it to your company, we don’t need to have our brand on it. Our hope is that you’ll look to us as you move forward to help keep that document alive and revisit it every year as you work on projects that are maybe highlighted within that assessment when revisiting it. A key to fractional services and if a firm is doing it, say you were to hire me fractionally as a CIO to come in and talk to you about strategy, do this assessment, talk about your project portfolio. You get me, so it’s no different than fractional ownership in real estate basically if you look at it where you’re not getting 25 guys that look or sound like me but that are not me and every time you sit down with them they have to relearn all over again what your organization is about. No, I might be at a CIO conference and be sitting at a table and I could be there with you side by side representing you and talking and thinking about things that you’re working on as an organization because that’s the piece that I am there fractionally to support you and represent you. I’ve got a lot of folks that I’ve worked with through the years that do this kind of service as well and they have become very embedded in the companies that they do fractional services with to the point where they truly are a trusted confidant. They are considered one of the executives in the team because they are there through and through, they understand the ins and outs of the business, they understand the processes, they understand the objectives and what the road maps look like. 99 percent of the time they’ve helped create all of that. They’re just not there on a full-time basis but they are there and then they’re there for the long term. So start with the assessment, work through that, flesh out what your priorities might be and then the hope is we’ll continue to work and then dig into that and execute projects accordingly as they fit you best.

[Ilsa Rew] For sure, that asset is worthwhile. Mike you have a free benchmark survey.

[Mike Trpkosh] We do yeah, so one of the things that we did last year, Ashley and our managing partner Noel Kersh. We sat down and we decided, you know it’s hard to go to companies coming out of the pandemic and say I’m going to charge you a lot of money just to tell you where you need to spend additional money. So what we came up with was a 10,000 foot cyber security benchmark survey and that’s complementary for anyone. You don’t have to be a client, it could be for anybody and actually I think put the link in the notes there. You take that and you get instant feedback there’s value that comes to you immediately. Then what I do is I get notified of everyone that has taken the survey and I write them a personal email and I give my perspective the survey results, talk about your responses for each question. Then I come in and look at it and say okay if you answered no to question one and no question three individually it’s not that bad but if you combine those two now you have a huge security gap. So I put my perspective in there and then we have a second layer and then a third layer. So we gradually ramp people up and it’s kind of like take small bites, the way to eat an elephant is one bite at a time. That’s the way we approach it and Jim made some very good points about the survey. The survey that we do, the risk survey, cyber is really when you break it down to its basic components it’s about the IT controls you have in place and how to protect your digital assets. That’s why Jim and I work very closely together when we talk to clients is because Jim talks about the IT environment and I talk about how to protect it. Then we have controls that are in place to ensure that that transition does take place. So depending on the number, our assessment is based on the number of interviews but like Jim said less than ten thousand dollars and we can do the majority of them for that because we’re good at what we do and we know how to do this. We’ve done it several times.

[Ilsa Rew] Yeah and Kevin I think that business continuity on the accounting side has never been more highlighted than through covert especially as companies had to really think through the fixed cost that they have in those departments. I would love for you to talk through that because having the benefit of a fractional CFO considering the constant need to reduce cost in those departments is really beneficial.

[Kevin Stewart] Yeah I guess from addressing that and the other as well from an assessment perspective and depending it really depends on the size and complexity of the organization depending on how big it is. I would say for a lot of organizations in that smallish space we can get in and out for quickly for five thousand dollars you but somewhere between five and ten in most instances. But as it relates to continuity one of the benefits of fractional services from an accounting side is there’s always someone there. So, we have a pretty good sized team and so as questions come in if someone’s on vacation or someone’s away or sick or doing whatever they need to do there’s someone else there to pick up the ball just like you would have in a normal accounting team. But on the fractional side businesses have been packed in different ways. Some businesses have actually exploded and done exceptionally well, and they’ve grown, and it’s changed the need. It’s changed from a mom and pop to all right we’re a more mature serious business in the sense that there’s more complexity, there’s more transactions, there’s more issues, the systems we have are bus busting at the seams and maybe we have the right people, or we need to add somebody else in. Do we have hire somebody full time to do that and I’d say the answer is probably not, not initially. So then it’s a matter of engaging someone like us to then help advise through that process. When that medical practice first reached out to us it was with the intent of can you help me find somebody to replace me and when we talked I said you know why don’t we not jump to that just yet. We can offer this assessment, we can get in and out for this price I’m pretty sure and we were we’re within that price at the end of the day but why don’t we kind of figure out what you have first so that we know who should replace you. When we ended that process what needed to happen was more than just an individual. That individual needed to be about process improvement, he needed to be a strong leader, they needed to be somebody that they could follow and it wasn’t necessarily that somebody needed 10 to 15 years of experience but they definitely need a type of personality in that role to really help drive improvement that people would get behind and do it well. So as that practice was growing and looking to exit we gave them some very good advice and we helped him to identify this is the type of individual to need and this is the type of scope of whatever else we need as well. Whether it be Jim or Mike or myself or any other fractional services in the firm. I do think it’s critical that business owners do reach out because that money spent, if it’s ten thousand dollars and yet we’ve saved you fifty thousand in a head count. That ten thousand is worth it you wouldn’t have got that otherwise and I think there’s a lot more value there than needed. Even on the accounting side a fair amount of what we do sometimes is making people aware of their spending. This is where you’re spending money, are you getting value for what you’re spending the money there. Our goal is to give you value for what you spend on us but kind of rambled there a little bit Ilsa but that’s kind of why they do sometimes.

[Ilsa Rew] We’re not just a contractor we become a business partner and our goal is to make your business better and be a trusted advisor and provide reporting and assets that you didn’t have before and work with you on that roadmap. But ultimately we understand that if we’re not a good fit, we’re not a good fit and that is important. Okay so we have two minutes left. I didn’t see any other questions, any last minute illuminating piece of advice from each of you?

[Kevin Stewart] Whether it be us or somebody else I would encourage you to seek advice. Good advice isn’t always free but even if it’s a minimal fee of a couple thousand dollars I think it is important for you to get a good bias. Frankly that advice can come from your banker, it can come through your attorney, it can come through your tax account or your auditor. But really seek out that advice from the professionals and advisors who are serving you because they probably have a lot more value to add than maybe what you’ve engaged them to do. It’s more than just a practitioner function. Because they have an insight to your business and so it’s just a matter of seeking it and I think what that does two things. It gives you advice you didn’t have before but also enhances that relationship because that advisor will feel valued by you. They’re more apt to speak up and provide more insights. As that relationship evolves and builds you just get a much better insight into your business. You can do with what you want, you can make the decision what you want but unless you’re getting the insight there may be some things you’re missing out on.

[Ilsa Rew] If we don’t get to your answers during the webinar we will send out a form with answers after the. We are running out of time so Jim, Mike I’m going to give you the opportunity to give a piece of advice as well if you have it.

[Jim Hermann] Yeah that last piece for me is always the same which is take the word and seek that Kevin just mentioned and seek to understand. Understand better what it looks like, what’s available out there. We use the word partner a lot and to me that’s super important I don’t look for vendors, I don’t look for contractors, I look for partners. I was on the phone the night before last about an exchange server exploit that’s blowing up all around the world with a current client of ours, that is not an IT advisory services or cyber services or even accounting services client right now, probably till 11 pm at night walking him through certain steps to take and what he could do to get around some bugs he was seeing.

That’s us right, that’s what we do, we’re a partner. I wasn’t billing him that was a situation where he was truly in need of help and he was capitalizing on the fact that he was partnered with a firm that has a deep bench of talent where he said I can’t have a tax person help me I’m going to have an IT person help me and we would gladly help. The hope for me is I could step in further in the future and help him with other things. To me that’s the most important piece of it is partnership.

[Mike Trpkosh] Yeah so I guess just to sum it up, I mean Kevin and Jim have both summed it up very well. I think that you don’t know what you don’t know and in order to find that out the fractional service is the try before you buy mentality. I think it goes a long way and I think you’re going to see that becomes more normal in the future. I would hope that folks would reach out to us like Jim said it we’re not looking to be your vendor we want to be your partner.

[Ilsa Rew] Well thanks everybody as always I enjoy these conversations. I get to benefit from them a lot more than everybody else on this webinar because I have access to the three of your expertise around the clock. I’m probably to your dismay at some time on some points I appreciate it. There were questions in the chat that we will send out answers to after the fact. I believe this is recorded and I don’t know if Ashley plans on making it available to everybody. Thanks for joining us and as always great conversation. Thanks.