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| Home - CEO Spotlight - Sep 06 Issue |
CEO Spotlight: Burton Goldfield, Ketera Technologies, Inc.
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Angel Mehta: ‘Spend Management’ as a category is a relatively established one. What is Ketera doing in this space that makes it different?
Burton Goldfield: The overall ‘spend management’ category and the business promise associated with it is to define and implement systems and processes around efficiency – i.e. driving spend within an organization on a global basis. The outcome of that process needs to be significant savings for the companies that are able to deliver on these best practices. So in the end, Ketera is able to go in and operationalize the whole spend management category, which is the procure-to-pay cycle integrated with their internal systems, to allow tremendous savings as a result. Those savings come substantially in how they procure the products. We’re seeing somewhere in the 10% to 20% savings range – just on the procurement aspect alone, not including efficiencies related to the people and process
I believe that as CFOs drive towards increasing EPS, the opportunity for us will increase. We have yet to find a company that was unable to achieve major savings by deploying our application – you simply can’t afford not to look into this issue.
Angel Mehta: One of the debates we have often at Sterling-Hoffman is whether or not early stage application vendors stand a chance as the market consolidates. Is there a particular player you would love to fall off the face of the earth? What one competitor do you wish would suddenly go belly up?
Burton Goldfield: That’s a very interesting question. Although I don’t have any concerns about the current functionality of an Oracle or an SAP, I am concerned about the future promises they make. When push comes to shove, are you going to buy a solution that interfaces well with your ERP system, or are you going to cross your fingers and hope that SAP or whoever will come up with something…. someday? As you know, customers do get influenced by the FUD factor... So, the silver bullet would be to remove the fear, uncertainty, and doubt around promises from the big ERP vendors, which would facilitate customers making the right decisions today.
Angel Mehta: So how do you handle that problem? You came from a situation at Hyperion where you were pretty much the gorilla, squashing small start-ups in the business intelligence space… so you know how the gorillas play. What advice would you have for CEOs at smaller software companies about how to fight the gorillas, and how is Ketera doing it today?
Burton Goldfield: First of all, in as much as Hyperion grew to be a dominant player, it wasn’t always so. We had identical problems at Hyperion – trying to sell financial consolidation systems to companies that had spent $100m on SAP or Oracle implementations. Hyperion was tiny compared to those giants, and like any small company, we had to refine the way we approached these customers in order to get them to make big commitments. In most cases, customers had already bought offerings from SAP or Oracle, so it was a case of FREE vs. a few million dollars on a Hyperion implementation.
Now from a strategic standpoint, I believe it gets down to the issue of the customers believing that you can solve the business problem. You need to abstract out everything else and focus the customer purely on how severe the business problem is, RIGHT NOW, and the opportunity cost of waiting to address it. What makes it easier with Ketera is that with very minimal upfront costs, we can show results. It’s nice to be able to go up against a large ERP vendor and say to the customer, “We’ll implement our solution and prove it works. If you don’t like it, you can kick us out and we’ve categorized your spend, posted your catalogues, given you the processes, laid the tracks for spend analysis – basically given you a head start.” It’s a near-zero risk proposition for the customer, and you know what… we haven’t lost a single customer to a large ERP vendor after they’ve implemented.
Angel Mehta: Let me go back into your history a little bit. Relative to Ketera you worked at reasonably large companies…
Burton Goldfield: Oh, absolutely…
Angel Mehta: Let’s talk about Rational and specifically the experience of integrating into IBM after the last acquisition. What happened to Rational as a company after being swallowed by IBM? Did it make things better or worse?
Burton Goldfield: The hierarchical structure necessary in a large company challenges free thought, without question. Rational was an amazing company. I got in when it was about $20m and stayed with them until they got acquired with revenues of approximately $800m. I have a deep attachment to the people from that period in my life... but most of that team felt negatively impacted by the merger and are no longer with IBM.
Angel Mehta: In what way?
Burton Goldfield: My belief is that you need to let the best ideas win. The people who have the best ideas are the ones with the primary data, that is, those closest to the customers, the market, and the action. But as you go up the chain of command, trying to get ideas approved… things get filtered out. So getting the best ideas out of the people, or getting your ideas to the people who have the authority to act on them… was very challenging at IBM. Don’t get me wrong, IBM has exceptionally smart senior managers… but it is very difficult for them to get the primary data they need to make the right decisions. I believe it frustrates them as much as it does the guys in the trenches.
Angel Mehta: So what should or could big companies do differently to address this problem?
Burton Goldfield: Your only option is to allow those decisions to be made at much lower levels by empowering people. My experience with the senior management team at IBM, including their Chairman, Sam Palmisano and senior executives such as Steve Mills, was great. They really believed in building the greatest company in the world and I learned a lot from their spirit. But Rational, as a whole, had to give up its culture. We stopped looking at the customer experience and it was more about how to parcel out the company to different structures, organizations, and divisions within IBM. I don’t say that in a negative way… I’m not sure we could have done anything differently. IBM was buying us, after all – so we weren’t Rational anymore. Any company that gets acquired needs to understand that they are going to give up some of their identity – that’s what an acquisition is about.
Angel Mehta: You said that the senior managers at IBM were exceptional… tell me about what you learned to do differently from the senior managers at IBM that took your game to the next level as a leader.
Burton Goldfield: IBM’ers always look at the big picture of every engagement in and around how to drive value from every angle into an account. I took a lot from IBM to Hyperion in terms of how to optimize around services, support, new license revenue, the cross-sell, the up-sell, etc. IBM is just amazing at that.
Angel Mehta: You’ve come up through the sales function and I get calls from a lot of VP of Sales that want to move into a CEO role. In your experience, what separates sales executives that make the leap into a CEO position from the ones that don’t?
Burton Goldfield: If a sales executive wants to move into a CEO or even an SVP role, he/she has to take on operational responsibility for a significant portion of the business. I had the opportunity at Rational to take on different roles during my 14-year tenure there – an infrastructure job, managing the CRM implementation and I even owned the internal audit function at one point. Many of these were not a ‘promotion’ per se – they were lateral moves. But lateral moves are MANDATORY to get perspective on how to run a business. Once you’ve tried to implement a large system at a $700 million company, you get a very different perspective on what it takes to build great infrastructure. As a field person, you always try to understand why it takes so long or why it’s so hard to do this or why this process is in place or why this process worked or didn’t work. Most sales executives never get it – they are just too narrow in their experience to understand the whole business.
Angel Mehta: If you could make all your sales executives do one thing differently starting tomorrow, what would it be?
Burton Goldfield: It’s simple: spend more time with customers. Every sales executive should be externally-focused because that’s where their value is to the company. I just came from one of our key customers over in the East Bay. I’m out with customers all the time and I will never change that.
Burton M. Goldfield is Chief Executive Officer of Ketera Technologies, Inc., the leading provider of On Demand Spend Management solutions. He is responsible for the overall company strategy, organization and operations for the leading on demand spend management provider. With more than 25 years in sales operational leadership and technology management positions, Burton has extensive experience successfully growing emerging businesses. For interview feedback, contact Burton at bgoldfield@ketera.com
Angel Mehta is Managing Director of Sterling-Hoffman, a retained executive search firm focused on VP Sales, VP Marketing, and CEO searches for enterprise software companies and lead investor in http://www.softwaresalesjobs.com, the # 1 site for software sales jobs. Angel can be reached for feedback at amehta@sterlinghoffman.net
 
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