Tory Bauman, Vice President, FP&A at Zayo Group joins new host Glenn Hopper. In this fascinating episode they go deep on FP&A metrics and processes at one of the most exciting companies in telecoms. Tory leads an FP&A team underpinning business decisions at Zayo whose network stretches over 16.8 million fiber miles and spans 141,000 route miles. With telecoms long at the forefront of technology, Tory explains her cutting edge philosophy around FP&A realizing “ leadership’s strategy and their goals” “closing gaps” and making necessary “pivots”.
In this episode Tory reveals:
- Her move from accountant to finance and why she made the switch
- How FP&A at Zayo is set up and the main metrics tracked including the importance of being good stewards of billions of dollars in capital investments
- Measures for forecasting churn
- Alignment as crucial to business partnering
- Early warning signs and predictive analytics
- FP&A and cost per event on telecoms network
- Using external data and macro side on the pricing decisions
- How Zayo is profiting by providing connectivity and bandwidth in the AI revolution
- How I am trying to develop my experience in capital markets and mentorship
- Why I am not shy about letting people know I want to be a CFO
- Her golf career and the impact it has made on her finance goals
Full blog post and transcript
Glenn Hopper:
Hello and welcome to FP&A Today, brought to you by Data Rails. I am Glenn Hopper and I’m excited to be your new host. Today we’re joined by Tory Bauman. Tory is a CPA who serves as the Vice President of FP&A at Zayo a global telecom and internet backbone provider. Anytime you’ve sent a message or made a phone call, it likely involves Zayo network. There are 6.8 million miles of fiber spans an impressive 141,000 route miles. Tory started her career as an auditor at KPMG. Actually, Tori, it’s probably better if I if I let you tell your story than me reading your bio here. Can you walk us through your career and, and, and tell us how you got to your current role?
Tory Bauman:
I’m accountant by education. I graduated from the University of Denver and went to work at KPMG as an auditor in the Denver office. I spent only a couple years there in their TMT sector, so telecom, media and tech. I worked on some clients that a lot of people may recognize stars. The TV show producing company, Liberty Global Liberty Media, Zayo was also kind of an up and coming large client of Zayo, and I saw that they were doing a lot of exciting things there. You know, they were highly in acquisitive back in the two thousands and 2010s. So that means, you know, a lot of debt raise raises. The auditors are very involved in those with the requirements and the reporting. So I actually requested to be on that team. You know, a place like Stars, the audits can get pretty mundane.
You know, you have your number of subscribers and your cost per subscriber that they’re paying for the service, and that equals your revenue. So the audit was not super complex, but I thought Zayo, you know, may be a good experience for me. I, at the time, I thought I wanted to go into transaction advisory at either a big four or one of the big large advisory firms, and I thought it’d be a good segway. I was on the ZAO audit, went through their initial IPO actually in 2014 as an auditor. And then about a year later I jumped ship and went to work for Zayo. So a little bit of a change in what I thought I would be doing after my short career in audit, but glad I made that move.
Glenn Hopper:
Yeah, so that’s you and I have that in common. My first finance job was at A-C-L-E-C back in the early two thousands. And like Zayo, we were highly acquisitive. I think in the four years or so that I worked in finance there. I think we did seven transactions and they were all kind of mergers of equals, and it was really that just the M and A became a a, a full-time job coming out of the audit background and going straight into M and a as as you were there, did you find, were you involved in the due diligence early on? Were you involved in the M and A process?
Tory Bauman:
My first role with, with, Zayo was a manager of SEC reporting. As part of that, we worked closely with technical accounting on the valuations post close, the purchase accounting valuations. And so I wasn’t necessarily involved in the front end the right of way while I was at Zayo. You know, once, once the deal was signed, figuring out, you know, how are we gonna account for this transaction? What’s the person purchase accounting valuation, what do we need to report to the SEC? So I got a lot of experience there. I mean, Zayo is a really exciting company to be at and to follow. It’s a amalgamation of 47 acquisitions pre go private. And so it’s really special, you know, taking 47 essentially fiber network companies and putting them all together is no small feat and it’s not something that can be replicated today.
There’s not 47 fiber companies out there that could be rolled up to create this network. So it’s, it’s been a pretty unique story and it’s been fun to be a part of. After I was in SEC reporting and a little bit in in technical accounting, I actually moved into an operational accounting role. I was the assistant controller of one of our business segments. You know, that comes with the monthly close and analysis there on the accounting side, but also every time we do an acquisition, figuring out how we’re gonna integrate that new company’s data into ours, you know, how are we gonna get their AP into our AP system and, and things like that. So I’ve gotten to see that acquisition piece kind of from all angles between accounting and finance, which has been nice. Moving into onto the finance team, you know, it’s definitely getting involved a little bit more on the front end before acquisition close, you know, does this make sense? How much do we think we should be paying for this acquisition? Looking at their contracts and things like that, trying to figure out what synergies we can achieve once they come on board is a big component kind of on, on the finance side. That was a little bit different than what I had started in over in accounting.
Glenn Hopper:
Absolutely. And that’s my first real exposure in my career journey to really identifying metrics and understanding maybe on a deeper level, what they mean is when you’re trying to integrate the metrics, because it, different companies may measure the same thing a different way. So really learning what those metrics are. And that kind of leads me to my next question, which is, you know, here at FP&A Today we’re very practical. So we always wanna know like how your FP&A team is set up, what your main KPIs are that you’re tracking, and kind of what are the metrics that your CFO wants to know on a, on a daily basis. Can you tell us a little bit about that?
Tory Bauman:
Yeah, definitely. I mean, this is not unique to many organizations, but we’ve been through a lot of reorganization within our business. Not only with, you know, the way that our business units are structured, but also the way our finance team is structured just to try to reach an optimal state. How efficient can we be and how can we be best supporting the rest of the business? So today we are organized largely by business unit. We have four major business units and there’s leaders for each of those business units.
And so we measure them from kind of top line KPIs all the way down through contribution margin. And then we’ve got our kind of other half of the FP&A team is focused on headcount and sg a by cost center. So they’re aligned to each cost center. Each executive leader here at Zayo, you know, has a cost center budget.
And so our analysts work with them on how they’re gonna achieve that, what that should look like. And I think from a KPI standpoint, and we’re really focused on driving top line growth. And so we have a couple key leading indicators that tell us how well we’re doing and how, what we should expect from a revenue growth standpoint. And we operate in a recurring revenue model, right? Which means when we sign on a customer, we get recurring monthly revenues from them until they cancel service. And so we really focus on our sales bookings, which tells us how much is our monthly recurring revenue going to increase what new revenue is under contract, essentially, that now is in our pipeline to go install. So once we have our booking, it sits in our service activation pipeline, and then we measure our installs. So that would be the day we turn on service and we can start billing the customer.
So those are super important for growing that top line revenue. And then we also monitor our churn really closely. So how well are we doing from a revenue retention standpoint? We’ll report churn as soon as a customer says, Hey, I wanna disconnect. A lot of times there’s a 30 or 60 day notice period in there for them to let us know, Hey, I want, I want my service turned off. We live and breathe those every day. We’re sending weekly forecast updates on, on those metrics to our investors, our our owners. Some other important metrics include cash flow. So how are we doing from a cashflow standpoint on a weekly basis? You know, the cost of capital has increased over the last several years, and cashflow and liquidity is definitely top of mind for a lot of companies, especially in telecommunications. It’s a really highly capital intensive business. We need to spend a lot of money to maintain and build new assets in order to grow top line revenue. So cashflow is super important, and capital allocation is really important. So are we being good stewards of our capital? Are we earning an appropriate return on that capital? You know, what’s our return on on invested capital is a huge metric that we look at to make sure that we are deploying capital in the right places. I mean, we spend almost a billion dollars a year on capital investments in our network.
Glenn Hopper:
You’re giving me flashbacks to my days in telecom, and I’m thinking some of the earliest more complicated models I built in my career were on trying to predict churn. Could you maybe talk a little bit about, because that is an important part of the business, what’s your approach to forecasting churn and and how, how complex is that modeling?
Tory Bauman:
It’s something that we spend a lot of time and energy on because it is so important and we want, you know, our customer retention to be as high as possible. It costs a lot more to sign up a new customer and turn on their service than it does to just retain our existing customer base. We actually have a whole team that’s dedicated just to churn management, and they run a predictive model that they’ve built with the help of it that kinda shows, you know, what products and services are most at risk, what customers are at risk. It looks at the customer health index. Sales team helps manage to figure out, you know, are we at market pricing When their contract comes up, are we gonna see a re-rate where we have to give them a discount on the service? Are they gonna leave and go somewhere else that maybe has a lower rate?
If the customer’s really focused on price, that’s something that, you know, they’re monitoring on a daily basis. A lot of different factors and inputs go into that model. So price is obviously one of them. The type of product they’re on, the customer vertical that they’re in, the market they’re in. So it is something we spend a ton of time on and, and something that we’ve tried to automate as well. So that predictive churn model is really an, it’s an AI based model based on a lot of different data feeds to try to predict where we’re gonna see our churn coming from.
Glenn Hopper:
Because you’re using AI and because you’re constantly updating models and are and forecasts, I want to talk about how you do your budgeting and forecasting, but before that, gimme an overview of your team setup within FP&A and a. Yeah,
Tory Bauman:
So we have a middle management layer, essentially a director layer that sits over the business units and the cost centers, and then we have analysts layer one, two, and three that kind of support that. So typically we’d like to have an analyst dedicated per business unit or per cost center. So the owner of that spin kind of has one person to interface with that person can really understand that business unit and get really deep into, you know, what, what are the relevant KPIs for that business unit? Is it a growing product or is it a maybe a declining product? We’ve got dark fiber and waves. Those are huge growth products for us, whereas maybe ethernet, you know, has seen a lot of price compression. We still think we can grow the volume, but we’re competing on price a lot of the times. And so as the price works down, you know, we may to need to exceed our sales from a volume standpoint to maintain that revenue.
And so it’s really important for us to align the analysts in a way that they can get super familiar with the business that they’re responsible for doing the planning and analysis for, and really get ingrained in the business. It also helps from a retention standpoint and a development standpoint, we’ve found, we’ve been in a model before where we’ve been aligned by P&L bucket. So, you know, we’ve had revenue analysts and expense analysts. It’s really hard for them to grasp the concept of how the business is working and why we’re doing what we’re doing. And they tend to get really stuck on kind of just the few times queue reporting the weather, versus really digging down into what’s driving the variance. I think it’s a lot more exciting for an analyst to kind of get into a business unit, really understand how it operates, growth from a revenue and a cost standpoint, and do doing the analysis that way to help them understand, you know really what the drivers are. And it makes for a better analysis and a happier team.
Glenn Hopper:
That’s been my experience completely by embedding your team members within the certain groups. It really drives the business partnering, but it also, you know, whether it’s it’s BI or FP&A or, or data science teams having, so they’ve got the central report that they go up to and they, they report to a domain expert in finance and accounting, but they really understand the team better. And that, that model, I mean, it sounds like you’ve seen the exact same thing where having them embedded in the team really helps with with business partnering, with that business partnering and with the embedding and seeing that the, the level of understanding that your, that your team gets by being embedded in there. What would you say is your best secret to finance business partnering? Like, what are you saying they’re embedded in there and, and, and what else are you saying that really enhances that partnership?
Tory Bauman:
I think if you asked me a few years ago, I would say communication, but I think what it really actually is, is alignment. And what I mean by that is, you know, you could be communicating well and often, you know, have a good relationship with your business partner, but we found that sometimes you can be saying the same thing, but mean something totally different. And so making sure that you’re getting to the point of alignment where both parties are interpreting the mandate or the ask the same way, aligning on it and then moving forward. You don’t always have to agree on it. And a lot of times you’re not gonna get agreement between finance and the business units, but you have to get alignment on it before you can go try to execute it. Anyone in finance or anyone in business who works with a finance team has been pushed on targets and has said that I can’t hit that target.
You know, that’s a, that’s a stretch for me. That’s, I don’t wanna put that in my budget. And at the end of the day, whether it’s your owners or your CEO, your CFO, a lot of times teams will get stretched and that that additional target will go into your budget. And so making sure that you’re aligned on what the target is, maybe you don’t agree on what it is, but at least you, both teams know that this is the target. And then, okay, what are we gonna go do to, to hit that target? How can finance support the business unit in that to move forward and execute?
Glenn Hopper:
Walk me through annual budget process and how frequently you’re redoing forecasts and, and sort of how you go about doing that with, and I would imagine with the business partnering, it’s a lot of bottoms up kind of stuff. Walk me through that process.
Tory Bauman:
From an annual budgeting standpoint. You know, we start that kind of early in the fourth quarter. We work with the business unit leaders, the cost center owners, what’s the strategy for next year? Where do we think the business should be going? What resources do we think we need to support that growth? And then doing a bottoms up to figure out where the gaps are, if there are any. That process does take, basically the whole quarter towards the end of the quarter, we go to our equity sponsors and our board for budget approval. Sometimes there’s back and forth what the target should be, or we’ll get stretched on some of the targets, which I think is very common, especially if you’re in a private equity backed company. And then from a forecast per perspective, we do a forecast refresh once a quarter. So once we close the books on a quarter, we’ll look at, hey, what are our gaps to our budget?
Where do we need, you know, what initiatives do we have in place to close those gaps? Is there any pivot and strategy that’s based on maybe macro tailwinds that we need to consider to update the forecast? And we look at an 18 month rolling view. So every time we’re updating that forecast we’re going out 18 months. And so by the second quarter of any given year, you already have a full annual view of the following year, which sets you up well, when you get to that fourth quarter, you know, you’ve already been paying attention to the, to the next year. People aren’t surprised, you know, by, by what the targets are. They already have kind of a sense based on our long, long-term plan, what they’re gonna be expected to do the following year and, and what the trajectory of the business is. So I think outside of just the annual budgeting and the forecasting process, it’s been really important for us to work on that kind of five year strategic plan with our investors and our board to make sure, you know, we’re aligned on what the strategy is and we’re aligned on maybe what the exit target is five years from now, where do they expect us to be from a revenue standpoint, how much capital do we have available to spend to kind of drive that growth and fit all those pieces together to make sure that, you know, we’re doing the right things today to achieve that five years down the road.
Glenn Hopper:
Mike Tyson said, you know, that you, everybody has a plan till they get punched in the mouth. You know, you’ve got your 18 month view of where you want to go, and then, you know, as you know, reality meets the model and, and you’ll have your, your puts and takes with the forecast refresh every quarter. Do you talk a lot about the levers that you need to pull to change things if you’re off? How much is FP&A involved in those conversations?
Tory Bauman:
We are very involved in those conversations. We lead a lot of those conversations with our business unit leaders, our executive leadership team, anyone who really is responsible for spend at Zayo, a goal of ours is to grow our top line organically, right? If we don’t achieve some of those growth targets, it definitely puts a squeeze on how much we can then go spend. And so we meet on a weekly basis with, you know, our CFO, our CTO, our chief sales officer, our president on just, you know, what are our big deals in the funnel and what’s kind of our capital envelope that’s available? What returns are we expecting? And so as we get deeper into the year and we’re, you know, comparing our top line growth to the budget, our capital spend, to the budget, our, you know, expenses versus budget, what is EBITDA looking like?
We’re having those conversations during those, those meetings to say, Hey, if we sign on this customer, we’re committing to spend another a hundred million dollars over the next 18 months on this project. Is that something that fits, fits into the plan or doesn’t? Do we need to adjust our pricing? Do we need to walk away from some deals that maybe aren’t the best return? You know, we either price ourselves out on purpose or we just back away from the deal because it’s, it’s not the right fit for Zayo at the time, and we’re lucky enough to have the opportunity to do that. We do that today and we’re still able to grow our top line. So I think, you know, there’s enough addressable market out there for us to go get and telecom today. A lot of our competitors face challenges that Zayo doesn’t necessarily have.
We don’t have declining revenue streams like legacy MPLS services or voice products that people don’t necessarily use today. So I think we’re set up in a position to be able to do that and, and make those tough choices and pull those levers. And, and we’ve had to do that in the past. You know, things don’t always go according to plan. They almost never go according to plan. And so kind of knowing what those levers are knowing that we’ll have to pull them is something that we talk to the business about a lot. You know, we give them signaling ahead of time to say, Hey, you know, if this happens or, or we don’t hit this metric, this is the lever that we’re gonna have to pull. So they understand, you know, what the mandate is from a growth standpoint and kind of what the consequences really if we don’t hit that, what that cascades to for the rest of the business. So no one is surprised when we get to that point.
Glenn Hopper:
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A unique thing about Zayo is formerly public taken private, so I’m sure different budget demands and requirements, whether it’s from the PE sponsors or public markets. But I would imagine having seen both sides of that at the same company, that you’ve probably had quite a few challenging, I guess, for lack of a better word, budget experiences. Is there one that really stands out to you as the most painful, the most that you learned the most from? That was really tough to get through.
Tory Bauman:
Just a couple years ago. We were at a point where our CFO had actually resigned. Our senior vice president and finance had resigned and it was, you know, November, December timeframe, peak of annual budgeting. And, you know, all the numbers are starting to come together. We’re starting to look for approval from our board and our investors. And you know, as we’re getting the bottoms up budgets from a lot of our business units and cost centers, and we’re looking at our cash flows, we really we’re in a spot 18 months in the future where we didn’t wanna be from a liquidity standpoint. And so there was a lot of work where we had to go back and figure out if we continue at our current course and speed, we will not like where we are at 18 months from now. So first messaging that to the leadership team and the board and the investors can be tough.
You know, you don’t wanna be the person with your hair on fire, you know, getting everybody excited about something that needs a little bit more work. But it did kick off a lot of work streams in terms of evaluating how much capital are we really spending and what are those returns looking like, and where can we cut back on that capital spend while still growing revenue. We also looked at kind of our operating expense buckets, you know, where can we optimize our expenses? Can we group our network to get out of some five releases from an SG&A standpoint, not everyone is going into the office anymore. We work in a hybrid environment. Can we sublease some of our space? And then the final lever for us a lot of times is headcount. I think that’s true for most companies. And so we did a pretty extensive benchmarking analysis within our industry to see where are we at from a headcount perspective versus some of our peers, and what does that look like, even just versus the 50th percentile of our benchmark, not even best in class.
And we found that we were definitely behind benchmark. We had more headcount costs than a lot of our peers, and a lot of that has to do with lack of automation. I think when you pull together, you know,
And so that’s something we took a hard look at and said, okay, well if we’re gonna get to these benchmark targets, we’re gonna need to make some investments in our systems and really upgrade, you know, add automation and so we can get there. And so I think, you know, going through budgeting processes like that where you’re pulling together a forecast and you don’t get an answer you like, and you kind of have to go back to the business and say, Hey, we need to pivot.
We really need to hone in on, you know, these three things. It’s challenging. And then it’s even more challenging when you get to that last headcount lever. You know, no one wants to do it. It’s always hard conversations, but a lot of businesses have pulled that lever in the last 12 months. We’ve seen a lot of layoffs in tech and even other industries. And so ultimately we did end up doing some small headcount actions as part of getting to our budget that year and setting us up to be in a place of good liquidity and, you know, going concern a place where we have enough capital to invest for growth and things like that. Yeah,
Glenn Hopper:
I I think a lot of our audience is locked in and they can a hundred percent relate to what you’re talking about here, and it’s making me think about, so you started out in audit and then operational accounting and thinking about what you dealt with there versus coming to FP&A and what you’re looking at here, you know, a lot of it sounds like it could be very stressful and certainly audit and, and accounting can as well. What was it about FP&A that made you drawn to the finance side and, and how would you describe it to someone who didn’t know what FP&A is.
Tory Bauman:
On the accounting side? You know, it was a really great foundation for my career, career and career for, for any career in finance. You know, learning how to read financial statements, how they all relate together, learning kind of the ins and outs of the business from an operational standpoint. Understanding how decisions you make, you know, what, what is the actual impact on your financial statements, how does that hit the P&L or the balance sheet, or your cash flow. I think what was exciting for me to move into to finance was you kind of get to be more forward looking a lot of times accounting, you’re, you’re accounting for things that ha have already happened, right?
My favorite part about being in finance is be able, being able to kind of look at what’s coming next and advise the business on what you’re seeing, being able to communicate with the leadership team, understanding what they wanna do strategically versus what you think financially the business will look like a year or two years from now.
Kind of working together on better decision making for the business today to set ourselves up well for the future. That’s definitely what drew me into finance was kind of the more forward looking aspect of it. I think if I was gonna explain an FP&A role to someone who didn’t know what that was, I would kind of lean that way and say, yeah, we, we work with business leaders to predict what the financials of the business will look like, and this really the success of the business will look like based on leadership’s strategy and their goals. And we, we set financial targets for them based on what that strategy and those goals are, and we’ll measure them on a monthly, quarterly, annual basis and let them know, you know, how they’re doing against those targets. How close are they getting to, you know, what they’ve defined as success. And if there’s gaps, we help them close those gaps. If there’s a shift in the strategy because of something that happened internally or, or externally. And the market has shifted, you know, what pivots do the, does the business need to make in order to set new targets or new goals. And really just aligning the financial targets to to really what the business wants to achieve.
Glenn Hopper:
Thinking about and hearing you describe the way your, your team is set up and thinking about the, the data that you have and that you’re already using predictive analytics telecom companies are generally gonna be a little more advanced than a a a lot of other companies. I think it’s just because of the, the tech nature of it. Maybe backing up and, and as you talk to industry peers, and maybe these are as they relate to you, but I think about where we are right now with kind of at the cusp of whatever’s gonna come next with generative ai, but even, you know, you know, AI in general has been used for years in, in machine learning and you know, predictive analytics and and BI and all that. We’re kind of on the cusp of another shift. Looking at whether it’s there or in general, what’s your sense of what the biggest challenges are right now for just FP&A as a field? Maybe the biggest challenges and opportunities as we’re sitting at this, right on the brink of, I mean obviously we’ve had all kinds of tools that have increased automation over the years, been able to do more and more with data, but it feels like that’s about to shift even more. What are you seeing and what are your thoughts about where we are today and where FP&A may be headed in the near future?
Tory Bauman:
Yeah, that’s a really good question. I think right now it’s a little bit hard to tell, but we definitely are trying to keep our thumb on the pulse. We’ve kicked off initiatives with our internal IT team to help us from a finance perspective, predictive warning signs or, you know, early warning signs from a finance perspective. So understanding, you know, what some of our price times quantity drivers are, like what really drives the outcomes of our business? What drives expense or revenue and understanding earlier in the month, you know, ahead of accounting close or anything else, what can we expect our costs to be? One example of that, it’s an account for us, it’s hard to forecast its emergency repair on our network that’s driven by, you know, if there’s a lot of construction, which there’s been a ton of investment in government funding for infrastructure around the US and when there’s crews, you know, repairing roads or digging up sidewalks, a lot of times they’ll inadvertently cut our network and we have to go out and repair it.
And that’s expensive. Sometimes we can go after the person who cut it, but a lot of times it could even be like a squirrel chew on the telephone pole. And so we measure that by number of events versus cost per event. And in the winter months it tends to be slower because there’s less construction, there’s less cuts on the network, and the summer it tends to spike. And it’s a big deal for us. And so something we’re trying to do is implement, you know, how many events have we had on the network, what do we think the cost per event is? Some can be more expensive than others. It’s, it’s a really wide range, but getting insight into that, you know, on a daily or weekly basis versus waiting for after accounting close to understand what that expense looks like, it’s really helpful for us.
The sooner we can identify that, the sooner we can implement initiatives to mitigate that spend. Like one would be internally locating our network for companies. So, you know, people usually you’re supposed to call before you dig, you know, tell them where our network is so they don’t hit it. That’s just one very specific small example. But going really deep into our financials and understanding what the drivers are so we can work with IT and say, Hey, can you implement a model for us that will pull from these three data sources and then tell us what we can expect from a finance standpoint whenever we want, you know, pull up a dashboard and see where we’re at.
Glenn Hopper:
And all these data sources you’re talking about, there are internal data?
Tory Bauman:
Yeah, primarily internal data network downtime. All of our network stats is in a different system than maybe our, the system where people are putting in PRs or reporting events things like that. So
Glenn Hopper:
I always think about external factors. You can track your historical information and you know, things like construction and seasonality around that. And I, I think of as machine learning models are able to process a lot more than what we used to do in Excel. Do you ever look at factoring in external data, whether it’s new, new construction or macroeconomic factors? Do you try to incorporate any of that into any, any of your models?
Tory Bauman:
That’s definitely something we do more on the pricing side right now anyways. We do look at some of those macro factors on the expense side. There’s no specific data source that we’ve been using to pull from, it’s an assumption that we make internally, but AI is really interesting. Not only are businesses trying to figure out how to use and harness that, but it’s actually a huge opportunity for Zayo. If you think about ai, you know, you’ve, you’ve seen the proof points in Nvidia, the chips, you know, their results have just skyrocketed. And then, well, you need a data center to house those chips, right? And so you see all the hyperscalers building these huge data center campuses across the United States, but if you build a data center and it’s not connected to a network, it’s just a box with a bunch of stuff in it.
And so that’s where Zayo comes in to provide that network connectivity and the bandwidth for those hyperscalers to actually transmit the data between their data center campuses or corporate headquarters. And the amount of data that’s used to run these AI models and machine learning models isn’t all housed in one data center, one data center campus, right? So data is going between multiple data center campuses, multiple sources, and so all of that rides on a fiber network essentially. And so we’re actually trying to figure out how do we capture these kind of macro tailwinds of AI from a top line standpoint at zeo, you know, how do we, how do we capture that demand? And we’re definitely seeing it in discussions that we’re having with some of the hyperscalers. If you think about a fiber network, you, you have fiber strands and maybe back in the day a customer wanted one fiber pair or, or four fiber pairs. Now some of these customers who move tons of data around, they want 144 fiber pairs. It’s just insane how much that’s grown, how much more data people are transmitting and where they, it’s just an indicator of where they think this is gonna go and how much data they think they’re gonna need to be moving between data centers and, and campuses. Yeah,
Glenn Hopper:
It’s funny, as you say that I’m picturing like the Moore’s law, the scale of, of you know, the, the growth and compute power. And I picture as you’re talking about the increased network traffic around AI in these data centers, I feel like you’re actually seeing a chart that is showing the growth of, of AI with that and thinking about, you know, everything you’ve said about what Zayo is doing and knowing telecom tends to be technology leaders in their, in their reporting and what they’re doing in the back office. ’cause Certainly they’ve been using machine learning for years for traffic routing and all that, and that sort of can bleed over into the other departments into, into financial modeling and all that. So I imagine you guys are probably talking a lot about gen AI as I guess we all are, but how are you guys approaching, and maybe, maybe I won’t li limit it to just generative AI, but you know, we talked a little bit, a little bit about machine learning earlier, but how are you guys in finance using AI today? And are you doing any sort of experimentation? How are you looking at generative AI and how it may change what you do in FP&A, it’s
Tory Bauman:
Something we’re definitely looking at, you know, how can we get more accurate, how can we be faster in our reporting? I think, you know, we have analysts that do work that a machine could learn how to do, or we could, you know, build an AI model and teach you how to do that. And that’s something that we wanna do. I mean as an analyst, it gives you actually a lot more opportunities to figure out what’s really going on in the business. Anything where an analyst is, you know, just collecting data, massaging the data, and then basically reporting the weather. We would rather have a machine doing that and use that, that analyst to actually look at what’s happening. You know, go talk to the business and figure out how to make the business better. How can we do something better? How can we price these services better? How can we mitigate churn? How can we eliminate our costs, shrink our technical space in this market? There’s a lot that we can do to kind of use ML and AI to give us the weather reporting. We spend so much time doing that manually. How can we teach a model to do that so that we can go take what we learned from it and actually implement changes in the business to make us more efficient.
Glenn Hopper:
We do like to share a little bit about personal side with our guests and as FP&A professionals talk about what our interests are and kind of what we’re doing. I’d like to spend the last few minutes talking a bit about changes that are going on right now and seeing how you’ve moved from audit to the operational accounting now to FP&A. What’s top of mind for you right now for your career? What are you trying to learn or master at this point? ,
Tory Bauman:
That’s a good question. I think right now, something that’s very top of mind for me and something that I haven’t had a ton of experience in historically is capital markets. Here at Zayo, we have $9 billion of public debt and some of that, you know, matures in the next several years. And so we’re starting to look at refinancing strategies. There’s been a couple fiber companies, primarily fiber, the home companies that have gone out and done an asset backed securitization in order to raise debt, which is kind of newer in our industry. Companies like Zayo, you know, we’re not fiber to the home, but haven’t really done it yet. So, so we’re figuring out, you know, can we go raise ABS debt to replace or, or pay down some of our traditional high yield debt? Can we refinance some of our capital stack doing that? And so I think that’s been a good experience for me, talking to banks, kind of learning about that side of finance.
It’s a little bit different than traditional FP&A has been really exciting. And I think the other thing too is just being in the position that I’m in now, kind of taking on mentors honestly, and working with younger professionals in their career who have questions about, you know, what can their trajectory look like, what experiences should they be getting in order to be successful or, or meet their goals. And I think being a female in, in a finance leadership position is, you know, a little bit unique. But I think being here, being a role model, mentoring young women in finance and young men in finance, you know, who, who wanna get to the next level is definitely something that’s top of mind for me as well.
Glenn Hopper:
Great. And I know also you’re, you’re quite explicit as many of our listen listeners are about wanting to be a CFO. What is your approach to realizing this goal and that you talked about the mentoring and about learning more. What else are you doing in in this vein?
Tory Bauman:
I’m definitely not shy about it. When I started my career, you know, when people would ask you, what do you wanna be in five or 10 years? You know, what’s your, what are your career goals? I would always just say CFO, you know, I’d kind of throw it out there. It’s a, obviously a big goal and early in my career I, I didn’t have a ton of experience, but it was something to help guide me through each role that I took on. I know a lot of CFOs started out in public accounting and so, you know, I thought what a good place to start. And I think just letting people know that there was a goal out there kept me kind of in the back of their mind as roles start to open up, you know, I took that operational accounting role, but at the time I told my CFO who was my boss, I said, yeah, I’ll do this role, but I actually wanna be in finance.
You know, I don’t wanna be in accounting forever. And sure enough, about a year later, something opened up in finance and he said, oh, I already know Tory wants to do this. I’m gonna ask her if she wants this role. And so just having that out there keeps you top of mind for, for other people and for advocates or other people in the business who are making those decisions. You know, if I would’ve never said that and I kind of held it close to the chest, that finance role would’ve opened and maybe he would’ve never thought of me because he didn’t know I wanted to be in, in finance. And so I think it’s really important, even if it, the goal seems, you know, so far out there and maybe un even unattainable at the time, you don’t need to be shy about it.
If you don’t get there in the end, that’s okay too if you change your mind along the way. But I think what’s important for me now is working with my leadership team or other mentors that I have to figure out where are the gaps in my experience and what do I need to kind of get to that next level or get to the, the CFO level. And I think, you know, for me six months ago it was that capital market markets experience. And so now that, you know, it’s fortuitous that Zayo is coming up, we need to start thinking about refinancing our debt maturities and I’m now getting the opportunity to work on that project and, and get some experience on the capital market side. So I think definitely voice, you know, what your goals are, ask people, you know, where are my weak spots? And have them help you fill in those gaps too. Say, Hey, I wanna be on this project when this comes up, and really advocate for yourself to get there.
Glenn Hopper:
Yeah, and it sounds like, I mean, you’ve got, you’ve got a clear plan and you, you see the path and you’re able to advocate very well for yourself. And I, I know you, you mentioned that you’d mentioned to a former boss about wanting to move into finance. Is there someone, is it, is it that person? Is there someone in your career? I don’t, it could be a, a person or a, a, a training program or a book or something that has really ha had the biggest influence on your finance career.
Tory Bauman:
Yeah, I would say that Boss has has probably been one of my biggest mentors and advocates. It definitely helps to have someone within your organization that you can relate to, you know, that you work well with who’s in the room when you know bigger decisions are being made and can help get you some of those bigger opportunities. I’ve been part of other mentorship programs where I was assigned a mentor and those were, were beneficial for me, but I would say those people actually weren’t, they didn’t have the biggest impact on my career. I think a lot of times those mentorship relationships, the ones that come naturally are the ones that work the best. It’s kind of hard just to, you know, assign two people together at a company and go through the motions versus finding someone that can really be your advocate. And it’s a two-way street, right? You know, you gotta work hard and keep the relationship going and help the mentor understand, you know, what you wanna do and how they can help you versus expecting someone to kind of just step into that role without really, you know, understanding what you wanna do and where you wanna go. It’s definitely a two-way street there to kind of build those men mentorship relationships and have advocates for you throughout your career.
Glenn Hopper:
This is always my favorite question, whether I’m a, a hosting or a guest on a podcast. Because you, you hear some interesting things along the way. What is something that maybe not many people know about you? Something that we can’t easily find online or that not on your LinkedIn page?
Tory Bauman:
Yeah, I actually am a, a big golfer today. I am a one handicap. I actually played at the University of Denver. I love playing golf. I, I play most weekends when the weather’s nice. When I was younger actually, I went to a tournament, it’s called the Women’s Western Junior for anyone who follows women’s golf. A lot of the big names on LPGA had won that at some point in their career. It’s a match play tournament. And I was invited to the tournament, I went, it’s a play and a 36 hole play, and then you get seated into a bracket, it’s match play from there on out. And I actually, you know, I, I thought I would get out of the 36 hole play and I did, I made it into the bracket system, but I didn’t think I was gonna go very far.
If you keep winning, it’s two matches a day and the tournament, if you get to the last match, it ends up being like a six or seven day tournament. Well, I only brought enough clothes to get to like the fourth day and I kept winning my matches. And so, you know, I got to the end and I, I won my last match. My dad was with me, it was like in the middle of nowhere in Indiana, we had to drive like 40 minutes to the nearest sporting goods store so I could get more clothes because it was like a hundred degrees out. And all my clothes I had worn were sweaty and gross and, you know, they asked me at the end of the tournament, like, so and so who’s on the LPGA tour? She, she comes into every tournament expecting to win. Was that your mindset this week?
And I said, actually no, it wasn’t. I didn’t bring enough clothes to make it to the championship round. SoI actually think you know, golf has helped me a ton of in my career. And that specifically that moment in my junior golf career really was a mindset shift for me that the sky’s the limit and it really blew the lid off, like in all aspects of my life. I think my golf game got a little better, but also my grades in school got better. The goals that I set, set for myself were just a little bit higher. That was a real turning point for me. And I think it’s, you know, my, my new goal of CFO someday, it’s helped me just as kind of a guidepost and a, and a mindset really. Keep working towards that and knowing that the sky’s the limit.
Glenn Hopper:
Okay, Tori, now is the question we ask everyone. I think I know what the answer’s gonna be just based on how many people I’ve heard it answer this, but you may surprise me. What is your favorite Excel function and why?
Tory Bauman:
Well, I don’t know if you’ve forgotten this one before, but I would say my favorite Excel function is actually not an Excel function at all. It’s how do we get it out of Excel and automate it into a system? That would be my favorite outcome. But I think if we need to go with an Excel function we have kind of an inside joke here on the, on the Zayo finance team with the index match match. If anyone wants to get into the Zayo group March Madness brackets or any other kind of login games, the password will be index match, match
Glenn Hopper:
For
Tory Bauman:
All of those. <Laugh>,
Glenn Hopper:
You know what I loved your answer because I’m constantly preaching about automation and, and getting data into the places where we can do the most with it. So I actually really like your first answer a whole lot better. But the reality is I feel like it’ll be 50 years from now and we’ll still be using Excel. You know, it’ll be, because it’s just, yeah, I think you’re right. It’s, it’s sort of the base foundation of all of it, but as much as you can move out of it and yeah, so Index match and VLOOKUP is the other really popular one. And actually when I was a guest on this show last year or whenever it was, I, I couldn’t get beyond vlookup. It’s just I thought about what I, but I, I guess if you’re doing index match too, that’s
Tory Bauman:
Yeah,
Glenn Hopper:
Pretty similar. But I was just thinking about what am I most frequently doing in Excel <laugh>.
Tory Bauman:
Absolutely. Yep. Yeah, that’s the one.
Glenn Hopper:
Well, Tori, this has been great. I’ve really appreciated you sharing your time and being on, and wish you the best of luck and thank you for being on FBNA today. Yeah,
Tory Bauman:
Thank you for having me. It’s been a, a great conversation.