 Live from Las Vegas, it's theCUBE. Covering Edge 2016, brought to you by IBM. Now, here are your hosts, Dave Vellante and Stu Miniman. Welcome back to IBM Edge, everybody, hashtag IBM Edge. This is theCUBE, the worldwide leader in live tech coverage. Jacqueline Woods is here. She's the global vice president and CMO of the IBM Global Financing Division. Jacqueline, good to see you again. Good to see you. Thank you. So, another edge, so let's talk about financing. Another edge. How to leverage financing for growth, right? It's critical, I mean, money is relatively cheap, IBM throws off a lot of cash, and you use that in ways to help customers grow, right? We do. What we find is that a number of customers are, for example, asking for deferred payments, or they're really looking for longer payment terms. So we do have a number of offers out there today, 12 months, same as cash. We have a number of 90-day deferral programs that are out there as well. And what I like to say about financing is an enabler, it's the how to get something done. What we're finding is that customers often don't have enough budget for their projects, particularly if you're thinking about analytics. They're also looking for higher returns. And over time, if you finance, you're going to find that your internal reader returns are going to be better off if you use financing. So, let's talk about this. You said something off camera, which struck me. You said, money's not free. Money's not free. But then you said, we got a lot of zero percent fine. I mean, it sounds free. What's the state of sort of money and the money supply these days? It's pretty good, right, still. It's, interest rates are still fairly low. So now is still a very good time to use financing to leverage it, to procure technology. And I think that's the most important takeaway. That you can, you know, why spend your own cash when you can leverage someone else's cash for growth. Yeah, so I mean, you work with CFOs and you know CFOs aversion to, you know, CapEx, most CFOs, some CFOs, not so much. Right. Right, because they got a bunch of cash and they want to put it to use. They have a bunch of cash. But most CFOs, when you hit them with the CapEx, you know, a request, they go, can't we wait? Can we do that? Can we wait? That's when you come in, right? Can we have longer payment terms? I mean, specifically, if you think about all clients today, they are asking for longer terms. And you know, you can't always just say pay me in a month, pay me in two months, three months, four months, five months. But with our deferred payment plans, we're able to give those types of terms that CFOs are actually requesting. Okay, so take us through sort of an example or a couple of examples. So you mentioned analytics. Analytics is somewhat risky because people, it's unknown to a lot of people. It's unknown. Particularly the CFO, I'm sure he or she is afraid to dive in too much. That's correct. They run a business case, they look at their cash flows, look at the IRRs, they probably put a higher hurdle rate on it, because it's riskier. Exactly. How can you help? I think it's in a couple of ways. First of all, it's not just financing the software, it's also financing services. So we do terms around services as well as our software products. The second thing that I would also note is that we also do what's called project financing. Where we're looking at, when do you expect to get a return on the investment that you're making? And so we have programs that allow you to align your payment structure to your expected returns. Now that's key because obviously you both know that with analytics projects, they often, one, take a long time. And two, what you also find that, you're not going to be seeing necessarily your returns on those immediately. So if you can align your payments with your expected returns, it's very beneficial to you, particularly as it relates to you reporting back to your boards. You know, this is the project that we implemented. Here are returns. You then begin to start using insights. And you know the importance of insights. Insights help you drive more growth. So a couple of things there. So one is you finance services. We do. So you're financing the IT labor component of a project. That's correct. It's huge, right? Because that's often times the biggest expense. The other, I have a question for you. I heard Rosamilia this morning, Tom Rosamilia, Senior Vice President of the Systems and Storage Division, this big conference topic. He talked about plenty of fish. And he played a video and the guy from plenty of fish said, our ROI was two months. And I said, oh, all ROI should be like that. But that's not the case, right? What are you seeing for sort of break-evens and timeframes to get positive cash flow these days? In tech, it used to be 18 months, 24 months. But CFOs want shorter timeframes. CFOs want shorter timeframes, yes. But the pressure of that shorter timeframe has meant they can't do strategic projects. So are you seeing your activity more involved in transformational and strategic projects that maybe have a longer break-even? We still see a lot of strategic and transformational projects. Those are really core. But what we also see are people taking and breaking up their projects into digestible chunks. So people eating a happy meal instead of a Bronisaurus burger. I mean, you know, really understanding what can I consume today right now? I need to show early success so that I can basically grow these projects inside of my organization. And I think that's the number one requirement for everyone today. Can you show early success, which is a proof point so that you can then begin to leverage that early success to then build the case for you to do further projects inside your organizations? And I think what we found out over time, as you know, is when you've had long, lengthy projects with a very long rate of ROI is so far out that by the time it comes, the person who might have even started the project has moved on to another role inside the organization. So having people understand when they're going to basically start seeing returns on their investments, it needs to be sooner as compared to later. And is there an opportunity to help them accelerate that transformation? So Jacqueline, I'm curious about the impact of cloud, because IBM, of course, has SoftLayer. You have customers that are buying things within OPEX, and then you've got infrastructure where you've got various financial tools. How do you bring those together, kind of the OPEX world and the OPEX world and work on transformation? Well, we actually do both, because even with your SoftLayer and other what I'm going to call SaaS services, you still have to pay annual in advance. And so we will also finance that stream of payments as well. And generally it's at a discounted rate too. So you're still often better off using financing even if you're buying software as a service. One of the concerns some people have is they don't want to scare their CFO and say, well, I'm buying something as a service, I don't want to be surprised as to, I burst it up and all of a sudden, oh wait, I hadn't budgets for that. Do you see that some? How do you give the financial side confidence that they know what they're getting when they're getting it? We see some of that, but what we also do is we will also, I mean, we have programs where we can look at what happens if you're going to be over, right? So there's not the, I don't know what's going on. It's working closely with the client to see how do we best make sure that their cash flows are fairly consistent. And I think that's what most of our clients are actually looking for. What's the scope of your financing services? What's the requirement that has to be all blue? Can you talk about that a little bit? I would say no. Particularly if you're financing through a partner. We do do financing through our partners. We also finance our partner's services and solutions as well. So that would mean by its very nature that it doesn't have to be a completely blue solution. And so we're looking at enabling our business partners just as much as we look at enabling our own client side as well. So we work extensively with business partners to ensure that they can offer these same terms and conditions to their clients that we offer direct to our clients as well. And several questions then. And from the standpoint of size of companies, is this only for large companies? No. I would say it's for, we do small, medium, large, extra large, the full gamut, the full gamut. And then you mentioned, so you work with the CFOs, that persona, you're a CMO yourself. There's that stat, I think it was a Gartner stat, but out that CMOs are going to spend more than CIOs over the next 10 years and analytics. If that's true, but it's a good stat, it's fun. It's a fun statistic. And it's true that CMOs are getting much more involved in technology projects, right? Yes, I would say that's true. And it's probably also true that most CMOs really aren't qualified to run technology projects. So they need to bring the CIO in. So you have to play, presumably sort of broker, to bring these different constituencies together. Do you play that role? I would say it a little bit differently. When I look at the C... My words. When I look at the C-suite today, the C-suite is really an amalgamation of different people who have to come together to make decisions on behalf of their company. And those decisions are not monolithic decisions anymore. They're not the decision of solely the CIO or solely the CMO or solely the CFO. It really is a group of people and a group of decision makers, which I think is very different from years past. When I think about the CFO, and one of the reasons why we work so closely with CFOs is their role today is more of a business value architect. That's how I like to describe them. They really are tasked with helping to drive growth. They're tasked with balancing the priorities of the organization. And it's not the same kind of general accounting path that they have traditionally taken. Their roles have changed inordinately. And then there was also an article in CFO.com last week where they were reporting that about 40 to 70% of CIOs actually report to CFOs. So not only are they intricate to the decision making process, often in many companies they have responsibility for the bottom line of that organization. So when you talk about transformation, getting a company from point A to point B, it really is the CFO who is not just sitting on the sidelines. That person is actively engaged into these decisions. And second only to the CFO, I mean, sorry, second only to the CEO is the CFO in terms of approving, deciding. Well, the CFO has kind of gotten a bad rap over the years as you know, the term bean counter, right? I think that's true. But the CFO has transformed, right? Don't you think? I mean the CFO role, CFOs are business people, they want to drive growth. That's 100% true. And so the CIO reporting to the CFO is not a bad thing. That's correct. It maybe was in 2002, right? But as we've come out of this, you know, into this new tech renaissance, it's actually quite a positive. The entire C-suite has evolved into a growth scale. You know, we're seeing that today, aren't we? With cloud. We're seeing that with cloud, with analytics, with digitization, even with marketing. When you think about how marketing has transformed, marketing is based on technology today. It is not based on, you know, kind of this mystical thing that happens and how do we create, you know, generate demand. It is very specific. It is very technical. It relies heavily on technology in order to execute demand generation activities. So all of those roles I see have changed over time. And I will tell you that my best relationship in my own organization is with the CFO. I consider him to be a business partner. Anything that I do, I talked to him about it before, you know, kind of here's what we're thinking about. And so the partnership between these C-level executives is critical. And so, and it can only get better over time, but as far as CFOs understanding the need for growth, I think it's their first priority. Well, you're a CMO, at least part of your role as CMO, and you have to run more technology-oriented projects. How do you do it? I mean, you mentioned you have a tight relationship with the CFO. Where do you get your technology prowess? Do you possess that? Do you work closely with your CIO groups? Do you outsource it? You know, right? IT oftentimes is too slow for CMOs. How do you manage all that? I think I do all of the above. I've been in technology for over 20 years. And so in fact, in my last role, I had technologists reporting to me as part of my job. I had distinguished engineers, as well as solutionists reporting to me. So for me, it's always been part of something that I have leaned into specifically. I think you also have to have a strong relationship with the technology people in your organization so they can understand what your personal goals are, particularly as it relates to anything around analytics and how do you drive greater velocity around analytics in your organization to use those insights to be better informed, to drive real-time decisions that are going to help drive real-time growth. So let's get beyond the sort of bromide of... I want to get to success factors. For CMO, running technology projects, let's get beyond that you got to understand the business problem. We all know that. You got to have executive sponsorship and collaboration, all those things that we understand and know well. What I want to get to is some of the other sort of not so well understood and maybe not so historical modes of operation. You mentioned before, breaking things into smaller chunks, working very closely with the CFO, using financing as a lever for growth. What are some of the other tricks that you would advise CMO colleagues? I think the biggest thing for me, and this is going to sound corny and it really isn't corny, the biggest thing for success for any of these projects is the relationship that you built inside the organization. Because it's those relationships that you have to lean into to be able to get things done. So I think it's the most misunderstood component of trying to have success with any of these projects because saying that everyone is going to be on board, everyone can say that. Making sure that everyone is on board fills value in what you're doing also has a vested interest in senior success. Those things can't be valued in terms of how quantified, but those things are for sure the things that are going to make you either successful or not. So as people, it's shared vision. It's shared vision. It's incentives. Now it's getting really tricky because you're crossing lines, right? You don't necessarily have all the knobs to turn. So how do you? You don't have all the knobs to turn. So it's just hard work and sleepless nights? No, it's a lot of, also it's influence, right? So how have you built influence inside your organization and outside of your organization? Because in today's world, most people don't have this kind of hierarchical pyramid line role anymore. Those roles don't exist. What exists is a matrix and within the matrix, you have to figure out how to work within the matrix to ensure your success. And I think that's not an IBM statement. I think that's all companies. So street cred? Yeah. It's adding value to your colleagues. Right. You know, in different ways. In different ways. Not necessarily expecting anything in return. Not expecting anything in return. At least not this year. Building up equity. Hey. Yeah, you need to build up some equity so then you can go and cash in your favors later. That's great. All right, Jacqueline. We'll give you the last word on edge. I know it's early in the conference, but anything you're excited about that you've seen so far or things you're hoping to learn? I think as always, it's a great and exciting conference. We're leaning into developers, making sure that we are really building our developer network here. And we're just really excited to be here. So make sure, you know, go IBM Global Financing and we're here to help you. Love the topic. Always love the topic of money. Thanks very much Jacqueline for coming to the queue. It was great to see you again. Thank you. Nice seeing you both. All right, keep it right there. Everybody, Stu and I will be back with our next guest. This is theCUBE. We're live from IBM Edge in Vegas, right back. Thank you.