Under the hood: How to build your finance data strategy | Robbie Osborne, Head of Finance at Humaans

In this episode of the Money at Work podcast, we are joined by Robbie Osborne who is the Head of Finance at Humaans. Coming from a consulting background Robbie joined Humaans as their first finance hire to build the function from scratch and develop reporting and data infrastructure that runs the organisation.

Tell us a little bit about Humaans, your background and your role.

I joined Humaans, a Series A startup, as their first finance hire. Prior to Humaans, my background was more focused on data and analytics. As a B2B SaaS company, Humaans provides a people management software called HRIS (Human Resources Information System). I often compare it to accounting software for finance, as it serves as the source of all people-related data and helps manage processes and generate valuable insights.

Your background is part data science, part finance - how has this skill set shaped your role in finance?

It’s fair to say that I have a solid background in the ETL (Extract, Transform, Load) space and data architecture setup. I'm comfortable working with tools like SQL and Python, thanks to my consulting background.

One advantage of working in consulting is being exposed to various clients and customers, each with different levels of sophistication and unique needs. Some may prefer quick and simple solutions, while others seek best-in-class approaches. There's no right or wrong answer; everyone is different. So, when it comes to my technical skill set, I would describe myself as being comfortable with ambiguity, adaptable to learning new tools, and focused on helping organisations make progress, starting from ground zero. It's fair to say that I have a technical inclination.

How would you define finance architecture and how has it evolved over the last few years?

The increasing digitisation of finance is something that excites me, particularly in terms of how it allows me to focus on activities that truly drive business growth. In my role, a significant portion of my time is devoted to two key dimensions - understanding various aspects of the business, such as channels, sales, costs, and investments. This involves running experiments, formulating hypotheses, analysing historical data, and mapping out potential outcomes. The goal is to make informed decisions based on these insights, even though the dynamic nature of business means that conditions may change rapidly.

The intersection of finance reporting and digital technology is where the magic happens. As finance professionals, we possess valuable insights across the entire organisation. We have visibility into costs and can support other departments like sales, marketing, advertising, and even product and customer success. This aspect of the role is truly exciting.

However, to fully embrace this strategic role, it's crucial to address the time constraints we all face. Automating tasks that are cumbersome or time-consuming is essential. Alternatively, investing time upfront to build a robust infrastructure can save valuable time in the long run. 

These two principles—the focus on value-driving activities and the automation or improvement of time-consuming tasks—are fundamental pillars that shape my daily, weekly, and monthly routines. It's about striking a balance between taking care of immediate needs and investing in infrastructure that empowers efficiency and future growth.

How do you navigate work and processes that are fast to execute but are not scalable? 

It's important to recognise that it's not a binary process, and there's never a point where you can say, "I'm done." As you invest in an architecture, new opportunities for improvement become apparent, and it requires discipline to strike a balance between investing time in enhancements and avoiding over-engineering or over-optimising a solution that is already good enough.

One principle I follow is understanding that the difference between having no architecture in place and having something decent is significant.

On the other hand, the difference between something that is decent and something that is truly excellent might not be as substantial. So, it's important to assess the various components and determine which ones require immediate attention and which ones can be addressed at a later stage. Sometimes there are urgent matters or "fires" that need immediate attention, while other aspects can be prioritised and addressed later.

If you had to set up a finance function all over again for Humaans what would you do differently and why?

I'm reasonably happy with the overall data architecture we've built, based on solid principles and an overall structure that I don't anticipate changing significantly.

Our architecture has three main layers: 
1) input systems where raw data resides (CRM, billing, accounting, etc.) 
2) a middle layer where I pull data from those input systems into our aggregated data warehouse
3) an output layer of tools/dashboards for us to consume and analyse the aggregated data.

Key principles we followed include clear data ownership, having a single source of truth, and aggregating data across sources into one comprehensive view. Areas I want to improve include better process documentation, since much institutional knowledge currently "lives in our heads", as well as better data definitions and documentation within our data warehouse. 

As the finance team, we have our own separate data warehouse that acts as a sort of sandbox for us to work with and analyse data outside of the core product data warehouse owned by engineering. While they control and secure access to the product/customer data warehouse - which makes total sense from a data security standpoint - we're able to pull in whatever supplementary data we need into our own warehouse environment.

This separate finance data warehouse is really our playground to structure, combine, and analyse data at whatever level of granularity we require, without having to directly interact with or risk exposing sensitive product/customer information. 

What are the key KPIs finance teams should be tracking for their business?

At an early-stage, high-growth company, my role is about much more than just traditional finance activities. While core responsibilities like payroll, cash forecasting, compliance are still hugely important, I need to stay laser-focused on what actually moves the needle for the business.

Our north star metric is ARR growth - new ARR, expansion, churn. So everything I do, every analysis or initiative, needs to tie back to how it impacts that key metric. It's not about getting bogged down in nuanced financial measures like EBITDA or margins, at least early on.

The equation is simple - either an activity drives our ARR growth trajectory or it doesn't.

My job is to provide that financial literacy and perspective to help the wider team understand the financial implications and make better decisions. But I have to balance elevating that knowledge with avoiding a narrow, overly finance-centric viewpoint that loses sight of our growth objectives.

Data and insights are also critical, but we have to be thoughtful about how we actually operationalise and act on those insights. Building dashboards is easy, but ensuring we set up processes to properly analyse, draw conclusions and take informed action based on the data - that's the hard part.

What does a good forecasting and cash management process look like based on your experience?

For me, having the right level of granularity in the data is crucial for building trustworthy forecasts. Being able to break down high-level numbers into their components - whether by segment, source, individual customer, etc. - allows me to really understand and have faith in what the forecast is showing.

It's also vital that my forecasting tools are flexible enough to facilitate real-time discussions and scenario planning. When leadership asks "what if" questions or wants to adjust assumptions, I need to be able to easily model out those changes in the moment. Rigid, inflexible forecasts make those conversations extremely difficult.

My forecasts are a direct reflection of how I think our business operates and the key drivers we use to model it. For example, we view ARR through the lens of new expansion, churn, etc. So I structure my forecast to map to that core mental model, and then validate if it holds up against actual performance.

Speaking of actuals, having a solid historical view is critical for grounding my forecast assumptions in reality. If I'm forecasting the next year, my starting assumptions should be anchored in our performance over the past comparable period. That baseline is key rather than just finger-in-the-air guessing.

There's also nuance around whether a forecast represents a target, a likely outcome, a worst-case scenario, etc. A top-down target-driven forecast might start with an overall revenue goal. A bottom-up forecast might build up from detailed assumptions like rep quotas and attainment. The objectives and questions I'm trying to answer dictate the appropriate forecasting approach.

Ultimately, flexible, granular forecasting tools that integrate historical context are table stakes. The hardest part is defining the right structure, assumptions, and philosophies upfront to ensure my forecasts are decision-useful and stand up to scrutiny.

How does your cash management process looks like at Humaans? 

In the current business climate, a keen focus on cash, liquidity, and forecasting has become paramount for many companies, myself included. Priorities have shifted in several ways:

Some previously growth-at-all-costs companies are now emphasising profitability and efficiency. Others are squarely focused on preserving and extending their cash runway. While some companies with healthy cash positions are still thinking about prolonging that runway given uncertain fundraising markets ahead.

Though the specific scenarios differ, accurate cash forecasting is critical across the board - both for longer-term planning/runway projections and shorter-term operational cash management. Having great visibility into expected cash inflows and obligations over the next weeks and months is table stakes.

Treasury management is also an important consideration for us. How much cash does the business need liquid versus what can be invested longer-term? How do we optimise the timing of cash flows? The better I can forecast our future cash needs, the more effectively we can manage that timing and allocation.

At the end of the day, cash is the lifeblood of any finance function - whether deploying it for growth, preserving it for runway, or simply ensuring sufficient liquidity. Companies need to apply an appropriate level of rigour to cash forecasting and liquidity planning based on their specific context and priorities. For some, it's quite literally the top priority to deeply understand real cash obligations given their situation.

What is the best advice you received in your career?

Throughout my career, I've been very fortunate to be surrounded by excellent people who have mentored and elevated me. The best advice I can offer is to purposefully put yourself in environments with people you can learn from and who will challenge you.

It's not just about finding expertise in your specific domain, but also seeking out individuals across functions who inspire and energise you. Ask yourself - am I going to enjoy working alongside these people? Will they motivate me when times get tough? Are they the calibre of people I want in my corner?

Ultimately, you are only as good as the people around you. A small but highly motivated, capable, and aligned team can achieve so much more than a larger group lacking focus and cohesion. People are everything in a work context.

To maximise this, I try to be extremely collaborative both personally and with my colleagues. I look for opportunities to help others with their priorities and understand their stressors. Embracing this spirit of partnership allows you to learn from each other and elevate the whole team.

The key is being very intentional about surrounding yourself with individuals you respect and can grow from. Don't underestimate the profound impact the right people can have on your career trajectory and sense of fulfilment. Identifying and aligning yourself with inspiring teams is perhaps the most valuable career advice I can pass along.

What are your priorities for this year at Humaans? 

Looking back, the landscape in the startup world has been fascinating to watch evolve over 2021, 2022 and 2023. It will be really interesting to see how 2024 shapes up in terms of trends and opportunities. The sheer number of new innovative tools and solutions hitting the market is incredibly energising. There are so many exciting possibilities out there - almost too many to fully take advantage of, which in itself breeds a buzz of potential.

While the last few years have certainly had their challenges, I'm feeling recharged and optimistic about this year. Between the momentum at Humaans and the innovations happening across the startup ecosystem, there's a lot to look forward to. I'm eager to see how it all unfolds.