The Ultimate FP&A Playbook For Cloud Spend Optimization with Tyler Cyphers

I think FPA has really become more of the sort of strategic decision making center within an organization. I think it actually accelerates the strategic nature of what we do now with generative AI and all the tools that are available to teams. I think that part becomes much more simplified. The pricing structures, especially as you get into generative AI and like per request, it's very complex. I can imagine if that's not something that is on your frame of reference, like it can be super hard, the basis of lots of relationships. And that's really what business partner is, you know, building that trust and ultimately doing what you say you're going to do. And so I think if you can do those things, like, yeah, you'll be super successful. Learning to set expectations is super.

Foreign. This week's title sponsor is Plan Buddies, the number one planning community for planning professionals. Check it out at Plan Buddies.com and join me in the community today. Hello everyone. Welcome to FPA Tomorrow where we delve into the world of financial planning and analysis, examining its current state and future prospects. I'm your host, Paul Barnhurst and I'll be guiding you through the evolving landscape of fpa. Each week we're joined by thought leaders, industry experts and practitioners who share their insights and experiences, helping us navigate today's complexities and tomorrow's uncertainties. This week, I'm thrilled to welcome to the show Tyler Ciphers. Tyler, welcome to the show.

Thanks Paul. Glad to be here, man.

Yeah, really excited to have you. So let me just give a brief introduction from Tyler, then we'll jump in. He comes to us from Franklin, Tennessee. He is the CEO and founder of Ops Cipher. He has a BS in Finance or business from US University of Central Florida and his MBA from Rollins College. So Tyler, we always like to start with this question before we get into a little more about your background.

Sure.

In your opinion, kind of from your experience, what is great FP and A. What does that look like to you?

Yeah, it's a great question. I think, you know, when I got into FPA, you know, 10, 12 plus years ago, I think FPA was largely considered a very sort of back of the house seen and to not be heard from strictly generate reports type of function. I think in the last, really in the last probably like seven or eight years and it's really accelerated in the last several years. But I think FPA has really become more of the sort of strategic decision making center within an organization. And so like what is. Yes, like what is good look like? I think it's one thing to take, you know, from a reporting perspective, your, your sort of, your financials, your cash flow forecast and so forth. But then the, the sort of, the magic is really then being able to provide that perspective and that visibility and that really, I guess, decision making, you know, from a business standpoint on what that means, from a profitability standpoint, what that means for our growth and so forth. So really that more forward looking aspect of guiding and driving the business. So that's sort of how I see it today.

That makes a lot of sense. It's really that guiding and driving. And I agree with you, you know, 10, 15 years ago, very much a back office function. I still remember we reviewed that way and we wanted to go to this conference. It was a microstrategy conference because we're implementing microstrategy and I work for a business travel organization.

Okay.

The company had enough people going that our tickets to the conference were free. I had to find free search from an airline since we were travel, we had to stay in the La Quinta off the strip with free certs. Everybody else was at the win for the conference. I think my total, you know, my boss did some of the meals. Most of the mills were covered.

Yeah.

I think my total reimbursement was less than a hundred bucks.

Wow.

You know, for like the four or five days.

Yeah.

Now my boss spent a little bit too, but I bet for the three of us, they spent less than $1,000. I was like, all right, we're back office for sure.

Yeah. Yeah. You don't get any of the, the fancy perks, that's for sure.

Yeah. And it was also, you know, 2009, 2010. So it wasn't a time that I think it was 2010 by this point, but it might have been late 2009. You know, companies weren't willing to spend a lot either.

Yeah.

So it's pretty funny. But that was my welcome to corporate world. Remember your back office.

It's not, not super glamorous.

No. And so the next question we like to ask people is you Describe what great FP&A is that decision making, that forward looking, informing the business.

Yeah.

How do you see FPA changing over the next five years with the generative AI and just everything that's gone on? Do you see it kind of still being the same or do you see the function really evolving?

Yeah, I, you know, there's a lot of talk of AI and what will it do to jobs and so forth. I think for FPA specifically, I think it actually accelerates the Strategic nature of what we do. I think right. If I look back, you know, kind of think back to like when I, when I started early on in my career and I was truly trying to, you know, you know, make my way right. It was around, you know, the typical things, taking those that day to day reporting and sort of the, the sort of the ins and outs, the blocking and tackling of the business, figuring out how do we fix things that are broken, optimize and streamline processes so that we can ultimately spend as much time as possible like on that back end, really understanding the business, working with business partners and really driving outcomes. So I think when I did it it was like a lot of heavy lifting. Now with generative AI and all the tools that are available to teams, I think that part becomes much more simplified and I think then the focus and the value add comes then on the back end. I just think it, I don't know that it necessarily is a massive landscape shift. I think it, it means that the, the tools and the skills that you know, good FPA people will have and own will slightly differ, be probably less technical, more analytically, you know, problem solving, sales oriented, frankly.

Yeah, no, I, I appreciate that. It's always interesting to hear how everybody thinks of it and I think that's generally one thing we see is there's that hope and belief that it will help with many of the mundane tasks, the data prep, the data cleansing as we continue to go on and allow us to be more strategic. I even heard one person who kind of shared that he thought it may, we may have to be more kind of data science technical in that area, less so in many of the things we do today. The data cleaning and.

Right.

And, and I thought that was kind of interesting, you know. Yeah, you don't understand the basics of an algorithm so it'll be fascinating to see how it kind of all plays out over the next several years and decades, frankly.

Yeah, no, I agree. I think like there's some interesting tools that automate a lot of the ETL process, extract, load, transit like and I think those will be very interesting to help again sort of automate bringing together a bunch of disparate data sources and sort of creating more that back end data warehouse for lack of a better term. But yeah, it's interesting and I'll be keen to see where, where things go from here for sure.

Agree. So we've talked a lot about just kind of general FP and A. Let's get to know you a little better before we jump into some More questions here. So can you tell our audience your background? You mentioned you've been FP and A, I think about 12 years. Yeah, you're running your own business, but maybe give us a little bit more of your story.

Yeah, yeah. So I, I grew up in Florida, you mentioned. I went to UCF and then did my, did my MBA at Rollins. You know, I started sort of got into finance there working for, for Disney at the time. I met my, my wife who she was working for Lockheed Martin on like a contract role. Ended up kind of following her. Ended up in California for like roughly 8, 9, 10 years. And then yeah, we, we kind of bailed there roughly two, three years ago. We have, you know, know, young twin daughters and so we moved to the Nashville area to be a little bit closer to my family and yeah, you know, professionally like you said. You know, I, I've kind of been in and around finance for 12 plus years. Started with Disney, spent the last probably 10, 10 or so years in, in sort of the cybersecurity sort of vertical with a couple of relatively large software companies there running FP&A. And yeah, you know, I, I left early part of this year like you mentioned and kind of set off on my own to build my own sort of consulting business doing sort of fractional CFO and fractional finops work. So it's been, it's been a kind of a heck of a journey.

I can imagine. So the first question I have, if I remember right, your specialization was marketing in college, is that right?

Yeah.

But how did you end up your first, from what I saw, your first role with Disney was finance. I think it was marketing. Finance? Yeah, finance based. How did that happen? How did you end up going from marketing, which is usually not viewed as that numbers finance type role, analytical role, even though there can be those people to hey, I'm the numbers guy, so to speak. How did that happen?

Yeah, honestly, I'm still not entirely sure. So I was in, I was going to school in the evening, so I was working full time for a small laser manufacturer and I was going to do my MBA at night in sort of a professional program and they had had somebody come in and basically just give us a presentation on sort of the internship program at Disney. So I one night I spent an hour and I did the application online and at the time, like I said, I was, I had a marketing under undergrad degree. And so I, I applied for the marketing internship and once you finish the application it says, oh, hey, there's these other internships you could also apply for. Right. And all you got to do is sort of just click the button. You don't have to reenter your information. It's already there. And so I was like, okay, cool. So like I, I kind of clicked the button on a few. I didn't get a single call about marketing or anything else. I got called back for finance and I, I, I went through the, the initial round of interviews and yeah, you know there's thousands of people apply for these things. They, I think they had 30 or 35 internships and I don't, yeah, Disney.

Gets a ton of applications.

Exactly. And so yeah, I, I got lucky enough I got hired on to like a six month internship in, in sort of resorts Finance. And then yeah, then I got hired after six months I got, I got brought on full time and I ran sort of our international sales marketing finance work. Did that. So yeah.

Yeah. Oh, thank you for sharing. It's kind of funny how those little things sometimes work out that you're like, I'll just click these buttons, odds are nothing will happen. But it doesn't take any time, you know?

Yeah, I, I, like I said I didn't think anything of it. I never intended to go into finance. I mean I've always been good with, with numbers but I've always sort of thought of myself as more of a, more on the, the social side than you know, what I think most people would think of as a traditional finance finance person, you know.

And I think that's starting to change. We're definitely seeing that. But I agree with you. There used to be the idea, right. The pencil pocket and hey, you get, you're pushed your glasses. You're the typical encounter accountant if you work anything in finance where now you're starting to see, you know, like you said, strategic center for fpa. Y really need to be able to manage business relationships, get out in front of people. So it's been, been great to watch because I like you. That's my favorite part of FP and A totally working with people. Yes. I love a good spreadsheet. I like my numbers. I can work my way around them.

Yeah.

But if you ask me what I enjoy the most, it's those relationships and the decision support helping move the business forward.

I'm right there with you.

And kind of speaking of that, I know at your last two companies before you started your own business, you were head of FP&A. So what's the number one thing you from your kind of vantage point that FP&A needs to do, to really be viewed as that strategic business partner to help make sure the business realize they're not just back office and you know, leave me alone. Go, go run your spreadsheets.

That's a good question. I, I think where I, the people that I've seen be very successful and sort of on the flip side, those that have struggled, the people that are the most successful have a genuine curiosity about the business. So it's, it's very hard to go into whether, whether you're supporting sales and marketing or the engineering teams or customer success, it's very hard to go into those teams and try to be that sort of extent analytical value add, extension and sort of thought partner if you can't one understand their challenges, what their business is. And really ultimately it comes down to sort of being able to sort of talk the talk. So like you have to be able to communicate on their level and understand your reports, your analysis, whatever in the context of the business and why it's important to them. And so I think that's the one thing where people, it sounds so simple but people don't do it. They're so in their silo of the spreadsheets and the numbers and it's like I got to get this report out. It's like if you would just take some time to understand why you're doing it in the first place and understanding the business impact and context, I think people would, would be a lot more successful over the long term.

I agree with you. So I'm going to have a follow up question here.

Yeah.

Any practical tips you can offer to do that? Like you know, let's say I'm new in a role. I've just come in, I'm head of FPA. I know you've been in those situations.

Yeah.

Maybe two or three things that you can do in those first 90 days to show the business that you want to be the partner, that you want to be strategic and really start to develop those relationships so that you're not in six months and then trying to figure out how do I crack down the door and get them to let me talk to them.

Yeah, it's a good question. I think. I don't know if I'll give you three or one or two but I think when you, when you first come in, you have to be intentional about finding time. Right. So whether that's setting up one on ones or talking to, you know, different, different people in the business, you have to get in front and face to face with people. Now I think traditionally Maybe a lot of finance, FP&A folks, that's not their bread and butter. And you can make people nervous. But ultimately, you know that like there's, there's no shortcut to like real life conversations. And in those conversations, I think, you know, really putting your sort of pride aside and like not being, being afraid to ask questions, like there's no harm in, in not knowing. Right. Like, you know, been admitting, like, hey, I don't know all of the answers. Like, I want to make sure that like I'm here to help. Can you tell me a little bit about your business? Like what are the key challenges that you're facing? Where are the pain points? And that'll really start to build a framework for you to maybe dig in a little bit more and figure out, okay, like where do, where do I fit in? Like, what, what is my role within the business and how can I support them to make their lives easier? And so really I think that sort of humility I think is a huge aspect of like not being afraid to ask questions and really learn that way.

So I like it. If I was to summarize that, I would almost say three things is one, be intentional.

Yep.

Two, make time. Three, check your ego at the door and learn.

Yeah, I love that.

Yeah, right? We all have that sometimes where you're like, well, I can figure this out after. I don't want to be the stupid one and ask that question. So let's move to the next question we have here. You write a weekly article.

Yeah.

You have a kind of a newsletter called Cash Flow for Coders.

Yeah.

And I know that's around helping coders, simplifying finance for non finance people.

Yeah.

First, how'd you come up with the name? Where did Cash Flow for Coders come from?

I mean, I can't lie to you. Like, I chat GPT. It's fantastic. So I honestly, I probably went through like hundreds of different names and iterations and I'm like, I like this. Don't do that. And then I came down to probably four or five that were in that realm of, you know, to your point, what's the word I'm looking for that.

You like that were in the realm of.

Yeah, Yeah, I guess it just in the realm of like teaching.

Yeah. They sounded like they were educational for people that weren't finance based.

Correct. Correct. Right. And so I think that's the, the, the intention of it. Yeah.

Hey there, it's your host, the FP and a guy. And today I'm thrilled to talk to you about Plan Buddies where professionals meet excellence. This isn't just any community. It is a community ran by and for planning professionals. At Plan Buddies we're all about fostering connections, sharing knowledge and providing mentorship among FP and A experts ready to elevate your career. Visit plan-beddies.com and become a member today. And here's a special treat. Use the promo code the FPNDaguy that is the FP and a guy for an exclusive 25% discount on your first year membership. Fun. I, I like that. And how, how has that gone so far for you? Maybe talk about that and just how important it is for non finance people to understand, you know, at least the basics of finance.

Yeah, yeah, I think it's you know, like for me like it stems early on in, in you know, in your career when you're, you're just an analyst and you may be supporting, you know, a marketing or a salesperson and you're trying to help them understand the difference between, you know, a cash versus an accrual and how that impacts their budget and the timing and so forth. And so like something that you know, for you or I or anybody else that's been in FP and a, or accounting or finance for a long time seems very straightforward. It's not for a lot of people. And so in advising a couple of early startups, you know, know a lot of these are technical, product minded, sales driven founders and frankly like the basics of how do I manage my cash, how do I forecast sales, how do I build a P, like really kind of simple stuff as you or I might think about it, you know, kind of overwhelms them to a degree and they don't really know where to start. And I think that's sort of why it came about. And frankly, you know, when you say how's it going? We've really only launched it maybe a few weeks ago, so it's still sort of in the early stages. But yeah, I'm enjoying it. I think it's a good outlet and hopefully people are finding value from it.

Good, I'm glad you're enjoying it and good luck building that. I know it can be a lot of fun to kind of ride. I know you've been building your brand out there on social media and things. Good luck with that. You know, I know today you're working as a consultant and one of your focuses is helping cloud first companies optimize cloud spend.

Yeah.

Why is it so important that companies have help managing cloud spend? Why are you out There being a consultant in this area.

Yeah, I think it's a fair question. First of all, I mean consultants is always, it's a dirty word. So I, I, I prefer like fractional leadership and it sounds a little more easy word but you know, it sounds better than consultant.

All right, well I'll call you a fractional leader.

I appreciate that, thank you. Let's, let's go ahead and edit all the prior stuff to that, that now. No, I think, listen, like if you think about like in a software business generally the two big business, biggest expenses are right people number one, one or two and then right, the cost of actually running the software. So the cost of the cloud services, whether it's Google or aws, Azure or whatever. If you talk about the people aspect, right there's entire industries departments literally dedicated to managing and maintaining that particular resource. But when you look at like the cloud itself, right outside of sort of recently and sort of the development of sort of the finops as a discipline, like there's like nobody is doing this. And so I think for me, like I, I've lived it firsthand like I've been in FP&A, and been in finance, owning cloud finance teams and really seeing that like even the most mature companies are really immature when it comes to a sort of a finops posture or a cloud cost management, however you want to describe it, but there's just not a lot of oversight there. And so I think you know, depending on where the companies are at from, from a, you know, a life cycle perspective, some of them may have their own internal finops teams, some, some companies may not be able to afford, afford a full on team and so hiring fractionally just like any other fractional role might be a good option. And then you know, some teams generally just don't know where to start. So having having somebody who's kind of seen the movie before and can help guide them on even the most basics of how to get started I think is, you know, super beneficial.

Yeah, I, I definitely would agree. You know, from the conversations I have, I hadn't had to deal with cloud spending. I worked with one company but that was all managed by the IT side. I focused on everything else in the business for the SaaS company I worked with. Yeah, second one I worked with, I wasn't, I was more in a kind of a sales coordination role. So I haven't had to deal with the cloud spend almost at all. Even though I've worked for two SaaS companies. Yeah, that's always an interesting area for Me and something you mentioned is, you know, you're starting to see this rise of finops and different things. So in your view, let's just talk large companies for a minute. You know, the big huge ones that have the huge cloud span, should they have a dedicated kind of finops team to manage that? Should that sit in fpa? Does it really matter as long as the person's qualified? I mean, what's your thoughts? How should people be thinking about it as they're ailing and growing? Because I think it's a area that a lot of people are just not sure what's best practice. How do I think about it?

Yeah, yeah. So I think there really for me when you say finops, there's really two things. There's finops as a culture in a discipline which is really about financial stewardship of the cloud and the dollars ensuring that you're getting the requisite business value.

Yep.

Then there is finops as a organizational structure. And so from the first part I think, right. It's inherent in the word financial operations. It's a finance financial stewardship driven culture in the first place. Now obviously the organizational aspect of it, to your point, more established companies, you know, building the visibility around it then optimizing the spend. Right. Like that is all definitely will be benefited by having a centralized team. And the reason really is, is like it's a full time job. Now whether that team sits within a finance organization, whether it sits under an engineering umbrella or an it, I don't think really matters. I, I've seen it in again in a, under the finance realm under my first company, under a more sort of a bifurcation almost under engineering in my second company. And so you know, regardless of where you put it, like I, it does make sense to have folks dedicated to the, the management understanding and really just providing that level of visibility into your cloud spend.

And do you think there's a point when you kind of should have that dedicated? Because I would imagine small companies, that first FPA person is going to do it, right?

Yeah.

Whoever that first hire is more than likely is going to manage the cloud spend.

Yeah.

With some help from the business. Y is there, what's that kind of pull point? Is it a couple hundred million dollars in revenue? Is it 50, is it a thousand employees? What do you generally think is when you start to say I really should have a dedicated team, the spend's big enough and the complexity is enough that I'll get value from it. Any thoughts on that? And I know it's going to vary. I know there's not a right answer to this question.

Yeah, as you say, I don't know that There is a, a 3 threshold of spend or anything like that that you can attribute. Hey, this is the point at which we need to make a organizational change or add another person to the team or whatever it might be. I think like anything, I forget who. I was watching a video yesterday and I'm talking about sort of the human action model and like the first point to get anybody to do anything is basically the presence of discovery discomfort. And so I think like, you know, for us like internally when we were building out these teams, like the, the very first thing that happened was we were realizing our forecast was getting blown out of the water every other month and we had no clue what was going on. So it was like, okay, like we gotta, we gotta reassess our focus. And then as you dig in there you're like, okay, well like now I need somebody to build and generate the reporting or do I outsource from a tooling perspective? Well, now we have to go manage and implement all of these long term commitments to help optimize our discounting and our rates and well, who on the engineering side is going to own all the usage optimization and finding the unattached volumes? And there's so much to it and it's intentionally complex but by the providers because like, like they benefit from frankly from it being that way. And so yeah, I think you know, it's going to vary largely but you know, in my experience it's anytime they start to experience the pain around it is what ultimately drives the change. So dependent. And you can be a really small company, really big company, it really just depends on, on that, that aspect to.

Me, once it becomes a big issue because you've missed a large forecast or what or because the contract doubled in cost, whatever it might be.

Yeah, you may be a super early stage business and your concern is cash burn and Runway and if that's your largest expense item. Right. It might make sense to focus a lot of time and effort in, in optimizing that. And so again it's going to be super, you know, subjective for to different themes.

And so yeah, it's like the idea of when do I get an FP and a tool.

Right.

Well, when the pain of being in Excel is enough that you'll trade off the loss of some flexibility for all the other benefits that come with it.

Exactly, yeah.

Right. The cloud spend is painful enough that I'll trade off the cost of another head to manage this process, it will be worth it in the long run. Just like anything comes down to a cost benefit analysis. Right. We can run those numbers, the optionality and say, yep, it makes sense.

Yeah.

So what advice would you offer to FPA professionals that are helping manage Cloud Span? You know, they just kind of inherited the task. They joined their first SaaS company and it's like, hey, you now own Cloud Span and they have no clue. Any advice you'd give to people out there that are trying to get their arms around it, like, where should they start?

Yeah, it's a great question. I think first and foremost, right, like you said, like they're inheriting this. Like you have to, you have to take ownership of it. It's easy to in cloud spend because the, it's so distributed in terms of, well, who turns on the environments and what engineer designed the product that's, that's running in the, in the product and who negotiated the vendor agreement. Like it's very easy to say, well, this isn't my problem, I'm ingesting the, you know, the actuals and I, you know, I can look at it and try to build my forecast from it, but whether it's right, wrong or indifferent, like it's very easy to sort of just obfuscate yourself from it and so I think take ownership of it, number one. I think two, again, like the biggest thing, again going back to what I was just saying is, is that the collaborative effort that is involved to do this really well, it's almost more than any other aspect of FP&A finance planning I've ever been in. Because again, it's so distributed across teams that it truly is sort of an organizational wide effort. And so as an FPA person, if you can take ownership of it, you know, there, whether It's a dedicated FinOps team, whether it's a cloud center of excellence, whether you meet once a month with different people, again, I think bringing all of those folks together in one environment to have like a cohesive conversation. And then if you can, again, one of the biggest challenges again is generally visibility. So if you can start to provide visibility to the individualized teams around their spend and their volume and so forth, you can then start to hold those teams accountable. That then starts to facilitate again more of this culture of financial stewardship. And then from there that's when you can really start to kind of get moving in terms of then starting to optimize and from a savings perspective and things of that nature.

Got it. And I appreciate that. And what resources are available if somebody wants to learn more about cloud spend, I totally agree with you. The idea of you just got to take ownership, don't let it be somebody else's problem because at the end of the day it's going to be your problem when the numbers get bad enough.

Yeah, yeah, exactly, yeah. And so what resources are available? I think they're like again it's, I would say it's still a relatively new discipline but the, there's a organization called, I think it's FinOps Foundation. FinOps.org I think is the, is the name of it. They do a great job of sort of laying out the basic frameworks of what goes into finops from again the, the overall operational aspects. Who are the key Personas, how should people operate, you know, within those Personas? How do like what are the different ways to optimize and sort of visualizing data? So that's a great sort of place to start and there's a huge community around that I think there's a couple. There's a new community that's upcoming from another from friend of mine named John Meyer starting it's kind of called Finops Nexus which again is a sort of this nexus of Finops and community. So I think that's a great option. And then frankly like the, you know the, the, the Googles and AWS's and of the world they do a decent job providing some documentation, you know, within their website. So depending on what you're using I would, I would start there first and really try to dig in as much as possible. Really understanding particularly like the pricing aspects I think are super important so that you then can start to tie. Well here's this dollar on my invoice. How did it get there relative to then what is the engineering team doing? That will go back to really understanding the business and the product architecture which again is not natural for most finance people. But when you can start to tie that I turn this thing on, it created a dollar of spend. How did that happen? Then you start to really kind of be able to put all the pieces together when it comes to forecasting for the cloud.

FP and a guy here today I want to talk to you about future finance. Future finance is the passion project of Glenn Hopper, cfo, AI expert and all around good guy and Paul Barnhurst. We're starting a podcast together. Why? Because we want to talk about technology, AI, where finance is going, what the future of finance looks like. So join us on your podcast platform of choice. Check us out on Apple Spotify and others. We look forward to you joining us for this new show. It's funny how often it always comes back to follow the flow of the transaction, follow the money through the process and understand the trigger points and how they impact whatever that amount is at the end. Yeah, it's not revenue, whatever it might be, just learn the flows. Yeah. And how the business impacts those flows.

Yeah, it's not. You don't have to over complicate it.

Let's say that it makes a lot of sense. And for those who are interested, I had Jeff Durski on. He helps companies for Amazon. He works for Amazon where cloud services, he helps companies manage their spend. So he's a consultant. Companies come to him trying to understand their contract. So he's often talking to Engineering and FinOp, FPA and he's written a few good articles. When you said Amazon has some resources, he's written a number of articles of kind of helping bridge the finance and technology. So if anyone's out there listening, I'd recommend, you know, checking them out. I had him on FPA today and we discussed some cloud spend things as, as another resource.

Fantastic.

Yeah, we're definitely all trying to learn if you're dealing with that because it's still fairly new like you said.

Yeah.

So I'm curious, I've seen a number of studies that says companies have a lot of waste in cloud spend. Yeah, there's lots of opportunities to reduce waste. What's been your experience there? What are you seeing?

Yeah, it's a great question. I, I think I've seen the same studies you do. So I mentioned that FinOps foundation, they do an annual study on cloud spend and they pulling a ton of different companies and there's a bunch of cloud cost management platforms that also release their own data. I think to your point, depending on what you're reading, it's anywhere between 20 and 50% waste. Cloud waste in an organization and. Right. And when you talk about 600 billion plus spent annually probably this year on cloud services, like it's not a small number.

Yeah, let's see. If I take 20%, we'll assume the low end is 120 billion. Yeah, I'll take that.

I mean it's a lot of money and frankly, like it starts, what I've seen, it really starts at the product development stage. Right. So there's not a great framework at that sort of early product inception, product development phase that, you know, at least, you know, five years ago, like that didn't really exist. Well, and so you're, you know, you're moving really fast. You're building these products without really any little understanding of what the, the cost impact is. And then once it's in production and customers are using it, you're adding on features. And the way that the customers interact with the platform may change the cost. And so like, there's just no perfect science around that aspect of it. And so in that environment, you get, could be right, sizing, meaning like you're using a machine type that is way oversized or overpowered for the task that you're doing. Right. And so like something as simple as that may mean that you are spending more than you relatively need, need to. Or when you like the way that, you know, compute works in a lot of these is you have to attach like a, like memory to them. Right. But a lot of times if you don't do it correctly, right, you can have these unattached memory volumes. And if they're not attached to anything, they're not doing anything. They're just sitting there in the background costing you money every month and you don't know about it. Or, you know, again, rate optimization. Right. If you're spending $100 every month. Well, and you know that for certain. Well, now you can go to Google or Amazon and say, hey, I'm. I'll commit a hundred dollars every month. And they'll say, well, we'll give you for just committing. We'll give you, you know, 30% off. Now you're spending $70 literally right away. And so like, there's a lot of this again, I don't think. And this is again, you asked earlier, like, why did I start? Like, I, I just don't think that there's a maturity level around this today. Until companies start to feel the pain, you know, that really like they're going to focus on these things. So that that inherent waste is sort of built into the system right now.

Yeah, it makes a lot of sense. As I'm listening to you talk and I'm just thinking about it, you know, kind of processing in my head, it sounds like the immaturity leads to a lot of suboptimal decisions. The frameworks, the learnings, those things from having, you know, 30 years of history aren't there.

Yeah.

And so you continually have different cases and different learning cases. All these companies where it's like, oh, if I did that again, I could have saved 40% or 20% or whatever. I do it differently. So it's a. Right now it really favors the vendors.

Yeah.

As you Learn because you're often paying more than you would in an optimized process fair.

And I think it comes down, it's a lot of foresight too. Right. So we talk.

Sure.

You're, you're, you know, building out a, you know, an early stage company, you're building out a CRM or you're going to, to your point earlier, like you're going to go implement an adaptive or an ANAP plan or some tool. Right. You build it for a purpose of today without like, what does this need to look like three years from now, five years from now? And then you. Right. You know, you've seen the, you sort of get these Frankenstein systems that are band aided on top of each other and different things. And then when it comes to trying to like unravel that and build something that's actually scalable and efficient, like it's super painful. And so I think that's where we're at is like there's a lot of just that, you know, happening on the cloud side for the last, you know, five, 10 years. And now we're getting to the point and that's sort of what I think Finops is today is like as a culture. It's like, well, let's put that sort of financial stewardship mindset at the beginning of the process. Ensure that there's business value as we're building the product so that we can then continue to monitor and analyze it moving forward. That's easier said than done, obviously.

I agree. And you just made me think so. First episode we had of FP&A tomorrow episode one, we did an episode all about product. We brought in two product people, one FP and a person.

Yeah.

You know, one of the product people, Dara, I actually supported her.

Yeah.

When I worked at Solera, she talked about how it's critical for FPA to be involved in the early days. And as I hear you talking, I couldn't help think, but this is one of those areas where if you're there from the early days and you're looking at things from the finance and all the different perspectives, you're more likely to catch things than oh, hey, we got six months into it, we're big enough now, let's bring in finance and you've kind of already made some architecture and different decisions that inherently are going to lead to some waste or cost to fix.

Yeah. And, and like I said, these, the, the pricing structures, especially as you get into generative AI and like per request, like it's very complex. And so I talked earlier about, like, why the cash flow for coders thing? And like some of the different little startups that I been advising, like, a lot of their questions in the early days aren't, aren't, can you create a P and L? It's like, hey, we want to use this database in our tool. Like, what does that do to the cost of the product? How do I actually model out what we're building? And like, it's, it's, it's not always very straightforward. And so like, even for a guy, you know, who is pretty good with numbers and kind of understands some of this, like, even for me it's, it's difficult at times. And so I can imagine if you're, if that's not something that is on your, your frame of reference, like it can be super hard.

FP&A guy here. If you enjoy FP&A tomorrow, I want to personally invite you to listen to the Financial Modelers Corner. This podcast is all about the art and science of financial modeling with distinguished financial modelers from around the globe.

Globe.

Check it out today on your podcast platform of choice, Apple, Spotify and all other major platforms. Listen as we talk to financial modelers and ask them what is their favorite shortcut, what skill helped them most in their career? Should we use circular references? Yes or no. And other controversial topics. Tune in today. I bet I could see where that could be a real challenge. Well, I've really enjoyed discussing the cloud. I think it's an area that people are dealing with the pain today or at some point in their career they're going to deal with. Yeah, right. The cloud isn't going anywhere.

Yeah.

What? 600 billion expected to get over a trillion by 2030, I believe, or even maybe earlier. I've seen different studies. Yeah, it's just a huge part of our spend. It's just like SaaS products, they're not going anywhere. And we probably all have some that we're wasting money on as a company and as individuals.

Yeah, yeah, no doubt.

We're going to move into our next section, which called kind of the rapid fire section.

Sure.

You get more than 30 seconds to answer. Ideally kind of 15, 20. And then at the end, if you want to elaborate on one, you can. So the first one, and I'm going to guess this will be a pretty easy one for you. But we'll see. What is the one software you can't live without as an FPA professional?

It's still Excel. It'll.

I figured that was gonna be. It'll always be Excel it's like the Energizer bunny. It just keeps going and going and going.

Yeah. When you say you can't live without it, like, I can. I can live without a different tool and do Excel. So like that. But without that, like really saying you.

Can'T live without a spreadsheet, you could go to Google Sheets, equals, or any of the 20 out there. So at the end of the day, the answer is probably a spreadsheet than a specific brand.

Fair. Yeah, let's do that.

Hey, we'll go with that. Are you currently using generative AI?

Yeah, I think I mentioned it earlier. I use it in my own personal business. Just because, again, like, you know, when you're running your own business, you're the marketing, you're the lead gen, you're the biz dev, you're the copywriter. And so, yeah, I do. I definitely use it from that perspective to, like, get ideas and know naming things. Obviously. I'm not sure.

I'm not sure.

For me, it's like at the point of using it in like a financial context, I just. I'm not sure that the products are mature enough, nor do I. I frankly trust them just yet. So. So yeah.

Okay, got it. Next one. What is the number one technical skill that FPA professionals should master?

I don't know. I'm gonna cheat because, like, I don't really ever hire for technical skills. I don't. I think. I think you can squint your eyes and maybe this is technical. I think copywriting, which traditionally is a, you know, a sales advertising skill. But I think if you think about all of your communications as an FPA professional, email presentations, text, slack channels, like, lots of it is over, you know, words on paper. And so I think, you know, that understanding how to sell and a lot of that is understanding, you know, people's behavior. And so I think, you know, as you grow and learn to sell your ideas and, you know, whether you're asking for a promotion or whatever it is, I think that's, you know, super important skill to have.

I like it. That's the first time we've had that one. I hadn't thought of it that way, but I can see what you're saying, so I appreciate that one. What's the number one soft or human skill? Need a master?

Yeah, I think I'll say. I mean, I don't want to just say broadly communication, but I think learning to set expectations is super important, especially in a business partner role. You're going to be pulled in a lot of different directions and asked a bunch of different stuff. And it's really up to you to be able to set the expectation with that business partner, client, whatever it is, as to, you know, you know, setting those boundaries and how you operate what you can and can't provide. And I think if you do that well, you really set yourself up for success. And if you do it poorly, you're. You're going to be looked down upon as someone who can't deliver, frankly.

Got it. All right, so this next section we're going to move into is the get to know you section. This is where we ask some personal questions to get to know you a little bit. What's your favorite hobby, passion that you have?

Yeah, I love golf.

Watching, playing, all the above.

My wife hates it when I watch. She'd rather take a nap. She thinks it's boring. But I don't mind. I like to watch it. I don't care if it's PGA Tour or live golf or whoever, I'll watch it. And yeah, I love to. I love to play it. That's also a big bonus of doing my own thing now is like, I can pretty much just go play whenever I want.

What is the. What is the one book you would recommend to our audience? If you could recommend a book? They should.

So the book that I give all of anybody that's ever worked for me, it's called Lincoln on Leadership. I got first introduced to it when I was in college. I think like a sales teacher, but really it's sort of like semi autobiographical about, you know, Lincoln and his life, but more so around, you know, how he approached, you know, team building and leadership and sort of delegation. And so I think for me, it's been super interesting. And I think it's always very insightful to give people as sort of a window into how I think about the world. So I'd say that and then, yeah, I'll stop there. But if I've already given one more, I'd say the Psychology of Money is very interesting. I read that one recently, so I think people would. Would get a kick out of that. Great.

I like both those. Lincoln. Anything on Lincoln, I love. So that's a good one. If you could travel one place in the world tomorrow, where are you going?

I would probably go to. Gosh, Spain. I could like Barcelona.

All right, so we're going to Barcelona.

Fun.

And then if you could have dinner with one person in the world alive today, who you going to dinner with?

My wife.

Smart man. You're not the first one to get that answer.

We don't get enough time. We have twin seven year olds. We don't get to go out enough. So.

That's a good point. Now, setting your wife aside, who would be that next pick?

Elon.

Elon would be a fascinating one. It'd be really interesting to have, especially if you could give him some truth serum and you knew you were getting what he really thinks on everything. Because sometimes I think he does a lot of things for shock factor. Not that he necessarily totally believes what he's saying.

Yeah, I think that's super fair. I think, I think there's definitely a bit of, you know, personal branding and marketing happening there, but I mean, you can't, you know, you can't ignore the success that the guy has and the way the way his brain works is just outrageous to me. So.

Totally agree with you. We're on the same page there. All right, we're going to go ahead and wrap up here, have one more question and then we'll give you an opportunity to just share if people want to learn more about you, you know, business, how they can contact you. The question I have is if you could give one piece of advice to our listeners to be a better FPA business partner, what's the one thing they should be doing?

Again, I would just say be. Be curious. Like we kind of talked about the beginning of this, right? Like just really under. Being curious and understanding the business and, and, you know, know, ultimately doing what you say you're gonna do. Right. That's sort of the basis of lots of relationships. And that's really what business partnering is, is, you know, building that trust and ultimately doing what you say you're gonna do. And so I think if you can do those things, like, yeah, you'd be super successful.

So, last question. People wanna learn more about you, get in touch with you. How should they do it?

Yeah, no, I appreciate that. So right now, super active on LinkedIn, you know, at Tyler Ciphers or at the Cloud CFO, one of those two. I don't actually know what it is anymore. In the. Still in the process of building out website for OP Cipher, you know, obviously finance guy, not, you know, building websites. So this, it's been a slow process.

But I remember that process.

You find me@opcypher.com when that's up and yeah, yeah, feel free to reach out to me, shoot me a dm and I'm happy to engage and have conversation.

Great. Well, we'll throw your LinkedIn information in the show notes for sure. And thank you for joining us. Tyler enjoyed chatting and you enjoy the rest of your day and we're excited to share it with our audience.

Awesome. Paul thanks man. I appreciate you having me on. This is awesome.

Thanks.

See you guys.

Thanks for listening to FPA tomorrow. If you enjoyed the show, please leave us a five star rating and a review on your podcast platform of choice. This allows us to continue to bring you great guests from around the globe. As a reminder, you can earn CPE credit by going to earmarkcpe.com, downloading the app, taking a short quiz, and getting your CPE certificate to earn continuing education credits for the FPAC certification. Take the quiz on Earmark and contact me, the show host for further details.