A CFO’s Strategy: Verticals Within Verticals

Lawson Software's Rob Schriesheim keeps the focus on six customer markets, allocating capital where growth prospects are strongest, and slashing costs with aggressive offshoring.

How does the market you’re in, the ERP software market, shape what you do as a CFO every day?
As in any technology business, you are constantly focused on how changing technology alters the way people use your products and thus the way you need to allocate your capital. Because the pace of change is so rapid, you have to be very careful about continuing to appropriately invest and reinvest in your product.

Can you give an example of a capital allocation change that you made in response to changing customer behavior?
People don’t fall in love with technology for the sake of technology anymore. They want technology that is easy to implement and use. Now, to say that any ERP system is easy is an oversimplification, but we have invested heavily in making our technology architecture flexible. For example, we rolled a new product called QuickStep that shortens the implementation time. That required investment in people and programming.

How has your career background shaped your views of the CFO’s role?
I spent 20 years in technology, mostly in software, telecommunications, and semiconductors. I spent a lot of my career working with large institutional investors at private-equity firms in highly stressed environments where we took companies through [prepackaged bankruptcies] and restructured their balance sheets. There were complicated Rubik’s Cube–type restructurings that involved a lot of constituencies.

I also have sat on a fair number of publicly traded technology boards. One of them, Dobson Communications, we sold to AT&T for $5 billion. It was a 19-to-1 return on equity.

So as I moved to a prior CFO role in a billion-dollar publicly traded company that went through a complex restructuring, GlobalTel Systems, I brought the lens of an investor and a director as much as that of an operator. When I look at businesses, I like to develop an analytical framework that allows me to understand how we should optimally allocate capital. You have to be able to understand the business strategically to understand where you’re going to generate the highest investment returns.

I’ll also tell you that Intentia was a really distressed business. It was a highly decentralized operation that had grown by acquisition. When they put the two companies together and I walked in the door as CFO, I found out we had a material weakness. We had to spend two years remediating that. That included cash management, offshoring, shared-services centers, and a more efficient tax structure, as well as taking a much more strategic approach to the business.

How did it come about that you took the job?
The merger agreement stipulated a reconstituted board that included two independent directors who didn’t have any prior affiliation with either Intentia or Lawson. I was Lawson’s pick. Harry Debes, who had been brought in as CEO concurrently with the announcement of the merger, decided with the board that we needed to bring in a different type of CFO. I was asked to lead the search committee.

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