Why a finance course helped software executive Nick Shah
Being able to discuss balance sheets with confidence is letting Nick Shah speak the same language as his customers.
Three years ago, the Director of Networking and Security at cloud computing company VMware started to notice a shift in the way his enterprise customers talked about digital transformation.
"Earlier, the objectives were very simple," Nick says. "The customer would go: 'Hey, what's the cost of that piece of software?' And then they would build it into their business case.
"These days, we are asked questions about how it's going to impact their P&L. How is a new asset going to impact the balance sheets? So, the maturity of conversation is now a lot more financial versus pure technology."
Realising that finance was beginning to play an important role in how his clients measured success, Nick decided to enrol in the four-week Finance for Non-Financial Managers (online course) at Melbourne Business School.
"The way our customers were measuring success has shifted from 30 per cent finance and 70 per cent technology, into 70 per cent finance and 30 per cent technology," he says.
"It was coming up so often in conversations that I had to get myself on top of that."
During the course, Nick – who also has a master's degree in IT network and security – learned how to convey the benefits of his company's products to clients in their own terminology, despite having never studied finance before.
"There were a number of us who came in from entirely non-financial backgrounds and didn't have any formal financial training," he says.
"Newbies like me were genuinely surprised how after the first six weeks of the course we became financially literate."
Nick recalls one case study about a now-defunct firm that impressed upon him the importance of being able to decipher accounting statements.
"There was a forensic case study about how a company looks healthy on the balance sheet," he says.
"But unless you look at the three elements — the balance sheet, the cash flow statement and the P&L statement — you won't realise that the company's inventory was not moving at a rapid pace and the company doesn't have sufficient cash to service their obligations."
Nick says familiarity with financial statements has become useful, because more and more clients want to know how technology can drive profitability.
"When technology's new, there is that euphoria factor. There is a 'hey, this is going to change the culture'. Then management starts getting questions from their shareholders, forcing them to really look at what returns the company is delivering.
"How is this going to impact our balance sheet? Is cash flow going to improve? Those questions start getting asked when companies make multimillion dollar investments in such technologies."
Nick says the reflections, discussions as well as the pace and quality of assessments all contributed to his learning so much on the Finance for Non-Financial Managers (online course) – and one year one, he can still remember most of it.
"The important elements I probably would never forget," he says.
"My conversations with customers have improved a lot more. I can speak in their language in my personal life. If I'm making an investment or make any changes, I'm able to assess the financial health of those companies. So that's kind of a personal benefit, and again in my job.
"For people who want to get promoted, it will make you financially intelligent. And everybody loves financially intelligent people."