Bringing Agility To Finance At Envato

Sigal Pilli

One of the hallmarks of digital businesses is the rapid pace at which they operate. But while speed is essential to meeting market requirements, it can pose problems for their finance function, which finds itself tasked with delivering a wide range of responsibilities in a rapid-fire timeframe.

At the Melbourne-based digital marketplace operator Envato, the finance function’s requirement to keep pace with the company’s speed of operation has meant adopting principles from the leading edge of finance innovation, as well as some from the company’s own development team.

Envato operates numerous online marketplaces and related services, creating ecommerce sites where people can buy and sell electronic content such as music, animation, and education courseware.

Sigal Pilli joined Envato as CFO in 2011, having migrated to Australia from Israel seven years earlier with undergraduate degrees in accounting and economics, and an executive MBA. Speaking ahead of her appearance at the inaugural Finance Innovation & Tech Fest, taking place in Sydney on September 11 and 12, 2017, she described the changes she has made as Envato has grown from just 35 employees to more than 250 now.

“I was the second person in the finance team, and we are about 30 today,” Pilli says. “Because it was a small business, they made do with whatever they had. But today we are covering huge ground compared to what finance used to do back then.”

Beyond traditional finance responsibilities

That coverage includes many tasks that would normally be foreign to a finance function, such as fraud detection and system analysis within its marketplaces. For Envato, as an ecommerce business, Pilli says there is also a large amount of software code within the marketplaces which is of interest to the finance function.

“I want to make sure that software code is compliant and adhering to accounting principles,” Pilli says. “It was decided that any work that is related to the finance code should be done by a team that understands the finance requirement. So we currently have a team of four systems analysts who are creating the requirements for the software development team that is working on the finance code.”

For Pilli, one advantage is her Israeli heritage and initial experience in working for high-tech software startups there. It was this experience that gave her the insight to quickly move Envato’s reporting onto a rolling forecast.

“It is a very fast-changing company, and to do a budget at the beginning of the year is almost a joke,” Pilli says. “You have to constantly review it and move and change with it, because plans keep changing. So we implemented a rolling forecast, which was a big process for a company that was quite young at the time. The whole concept was foreign to them, and you are taking time from them to give you information – time they feel they should invest in the business. We had to demonstrate value, we had to show them there was something in it for them.”

Going agile

Another innovation Pilli has brought into the finance function is the so-called agile methodology. This is often used in software development teams, and promotes the use of short, iterative development cycles (called sprints) rather than large-scale, waterfall-based development processes. Agile also encourages the use of cross-functional teams, regular group meetings (often held standing up), and the use of visual communications tools (such as Kanban boards) to keep team members on track.

While agile is used extensively in Envato’s software development teams, it has also spread across other functions, including HR, legal, and finance. “I have six direct reports, and each one of them can decide to adopt it at different times and in different methods,” Pilli says. “It’s horses for courses – we don’t force all of them to use it in the same way.”

“The analytics teams and the systems teams are fully agile, so they are working with streams and the stand-ups and boards – the whole thing. My corporate treasury and M&A is a one-person team, and there is no day-to-day interaction with the rest of the team, so he is the least agile of everybody. And that is OK. As long as teams find a way to use it in the best way that suits them, then I’m happy with that.”

Bridging the skills gap

While such methods are not uncommon among digital companies such as Envato, they are still far from the norm when it comes to how finance functions operate generally. These unusual requirements, coupled with the fast growth of the company, create issues for Pilli when looking for appropriate skills.

“The growth and the speed of change require you to hire ahead of the curve,” Pilli says, “But it is a highly complicated business, and the complexity makes it hard. And we have a very high bar for hiring. Finance people are conservative, and you don’t want to hire unless you have to. But because the company is moving so quickly, we sometimes can wait a bit too long and underestimate the difficulty of hiring.”

At times, this has led to positions being left open for six months or more. “We tend to hire people with experience, but even with the experience, we feel that we need to train them a lot,” Pilli says. “There is such a huge gap between what they learn in university and what they need to do on a daily basis, on every angle.”

Hence, she says when hiring she will tend to focus more on capabilities rather than specific experience. “If someone is capable of learning and then applying wisdom and intelligence to a problem, I prefer that to someone that has specific experience in finance or an ecommerce company,” Pilli says. “The ability to understand what you are doing and why you are doing things, and the consequences of doing that differently, is key.

“There is a high proportion of introverts in finance, and there is a tendency to sit at a desk and crunch the numbers. That doesn’t work anymore. People need to get out and understand the business and understand the commercial side if they want to be able to have a conversation with a GM where they provide value.”

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About Sigal Pilli

Sigal Pilli is CFO at Envato. She has been instrumental in building a highly effective finance function covering areas like reporting, budgeting and planning, tax, corporate finance, systems and cyber fraud. Sigal is also a member of the senior executive team and a sounding board to the CEO.