Storytelling About Factorial With Jordi Romero

William Tincup: [00:00:00] This is William Tincup and you’re listening to the Use Case Podcast. Today we have Jordi on from Factorial and we’ll be learning about the business case or the use case for wise prospects and customers pick Factorial. So Jordi, would you do us a favor and introduce both yourself and Factorial?

Jordi Romero: Sure. Thank you for the invitation, William. Sure. So my name is Jordi. I’m one of the founders and CEO at Factorial. And Factorial, basically what it does is it helps small and mid sized companies all over the world to automate all of their HR processes. And the goal is very simple. [00:01:00] HR teams are usually understaffed and they don’t have enough resources.

So what they end up doing is a lot of manual work themselves. So we help HR admins automate a lot of the processes by actually offloading a lot of the work to their teams. Employees, so to the managers and employees in a company, everything from hiding to onboarding employees, managing the payroll process, evaluating employee performance, and even beyond the typical HR processes included in expense management, for example.

William Tincup: Jordi, what are you displacing? Do they do they have nothing? Do they have something proprietary? Is it Microsoft Word or Excel? What do you find that Factorio is displacing?

Jordi Romero: Unfortunately, most of the companies we talk to don’t use any software or any dedicated software for these processes.

They’re doing a lot of ad hoc processes with random tools such as Dropbox, Microsoft Word, and, some cloud providers that are general, but they’re not specific to HR. We see that mid sized and large companies tend to have HCM, like human capital management [00:02:00] solutions. And that’s a completely different world in the SME, which is where we operate.

Right.

William Tincup: And so the SME or SMB in the States. So what is there any particular kind of group of SMBs that you’re that you work on? Like certain types of industries, or is it I guess you’re based in Spain? Yeah.

Jordi Romero: Yeah. So the company is based in Spain and we operate all over Europe and most of America.

And actually, funny you ask, because one of the things that make us special. It’s because we don’t come from Silicon Valley, like many other software companies, right? We never pay too much attention to tech companies or startups, because there’s not that many tech companies or startups outside of the Bay Area.

So we started working with what I call real businesses in manufacturing, in hospitality, in in retail. And we focus a lot on these types of companies that are typically abandoned by the early adopters of the company.

William Tincup: I love it on so many levels. Let’s do it. Let’s take the audience into some of these processes that we need [00:03:00] to that need to be automated.

So when you work first, when your team first works with a company, they obviously have identified that they have a problem, but maybe they don’t know exactly where to get started, etc. So what’s what are some of the processes that we that we both take on and then automate?

Jordi Romero: So I think one of the biggest eye openers when we start talking to a prospect is just asking questions about their own business.

How many employees do you have? Is it enough? How much do they make? It gets tricky. Nobody has this information centralized and they sometimes need to go outside of the organization and ask their payroll provider. Then you ask who’s working today? How many hours, extra hours did they accrue this month already?

Like very simple questions we start asking and they realize they have no way of answering In the moment, they need to go ask somebody or go look at a bunch of documents or ask the managers throughout the organization. So basically, these are the type of questions that people realize they should be able to answer in real time and that we help with with the software.

So very simple use [00:04:00] case is running your payroll cycle. Each time you need to pay your employees, there are a lot of questions that need to be answered. How many hours did my team work? Did I change somebody’s salary? Did I hire somebody new? Did somebody leave the company? Has somebody been sick or did they get a payroll advance or something that needs to be taken into account when I calculate the payroll?

All of these questions are not solved by the traditional payroll providers and it’s basically a lot of time wasted and a lot of errors because many times the answer that the payroll provider gets is the wrong one and then they need to redo the work and maybe creating problems for the employee or for the company.

William Tincup: And a couple of other processes. I love that in the example, by the way any, anything else that kind of comes to mind, you mentioned hiring and onboarding, but any any processes where you’ve, you find okay, there either isn’t a process or it’s so busted or broken that you really have to redo the process.

Jordi Romero: It’s all over the place, but I think hiding is a very good one where everybody hires once in a while employees. [00:05:00] And, again, large companies tend to standardize processes, but small companies don’t hire enough people to invest the time and resources in standardizing the process, and they end up doing completely manual, which leads to bad hires.

And bad hires are extremely expensive, both for the person that you hired, as well as for the organization and the rest of the team. So a typical process would be, there is a set of steps. in the interview process usually there are multiple people that will evaluate a person and there are sets of predefined questions that everybody involved in the process needs to answer so in a very easy way out of the box tool allows you to quote unquote standardize a process that only large corporations can afford but for any company from 10 50 70 employees all the way up to a thousand I

William Tincup: love it.

So when I say who owns Factorio, what I mean by that is inside the organization, who’s most in Factorio? What type of position is that? So

Jordi Romero: The person that brings Factorio into an organization is almost [00:06:00] always HR managers, chief HR officer, if the company is fancy, but it’s usually like an HR administrator or a personal administrator.

But if we’re successful, actually, it’s the managers that spend most time using the platform. Because one of the things that HR people realize is that they can offload a lot of their day to day tasks to the managers if they have one platform that everybody’s using and that all the data gets centralized while the processes and the work gets decentralized.

William Tincup: Does does anything else have you found working with SMEs, FSMBs, that other things need to be integrated into Factorio or data from Factorio needs to be pushed somewhere else?

Jordi Romero: Yeah, that’s definitely a challenge for SMEs because they don’t have they don’t usually have data warehouses, SBI, business intelligence solutions, where all the data from all the platforms are centralized.

So our responsibility as a vendor. is to aggregate as much data as we can. There is one touch point that is very important, which is finance. There is usually some sort of ERP [00:07:00] or software that manages all of the expenses and all of the revenues of a business. And then we need to integrate with that for both the payroll process, as well as to be able to answer comprehensive questions that it’s not just a vertical piece of data that needs to integrate multiple pieces of

William Tincup: data.

So AI, is that is that something now that Factorio is using in the background to help out or do you see it more in the future? What’s your stance on

Jordi Romero: AI? Absolutely. Actually we started the company seven years ago and it’s funny because we had this blurry roadmap and now with the new technology available in the area of AI it’s accelerating so much a roadmap.

So we started by saying, first, let’s understand what the HR team usually does. And then let’s give a system so that they can distribute this work and just, conduct the information and the workflows forward. Now the second step has always been, now let’s automate this work. Not that they delegate it, but it gets automated completely by technology.

And workflows that are easy to automate, like calculations, [00:08:00] but there are others that are harder to automate, like analysis. And for example, some of the things that we’re doing now is when you’re screening candidates for a recruitment process, or when you’re doing a company wide… Performance evaluation, for example, we are using already today AI.

To find common trends and patterns and highlight areas of the organization that are going to be most important. For example, for me, as a CEO of a company with more than 1, 000 employees, I cannot read 1, 000 performance reviews. But I’m very interested in what it says. So what I do now is I go to our AI tool.

And I ask, what’s most important? What are the changes in the content of these reviews? What teams should I focus on? And this is massive. In just a few months, we’ve introduced a couple of very powerful tools, one around recruitment and the other one around performance, but we’re working on many other, essentially all the areas of the product.

We introduced AI to basically automate Creative work that HR teams can do so that they can do it faster and they can focus on, taking care of the people and developing them or finding more talent [00:09:00] without wasting time on tasks that can be automated by software.

William Tincup: Dumb question. Why do people say no?

Like when you, when your team goes in and talks about factorial, shows them the demo, et cetera, shows them a new world, basically. Why would why would anyone say no?

Jordi Romero: I would say people rarely say no, what they might say is not today, because they don’t think they’re ready or, most, most frustratingly, they might think they don’t deserve it.

I think there is a mindset of SMEs where they’re not supposed to use fancy technology to be able to compete with large enterprises. They accept that the role is to do things manually in an artisanal way. And I think there is a, there’s a responsibility that we have. Educating the market in showing you also deserve great technology and somebody needs to make it affordable and easy to understand and easy to adopt.

Because I think that’s the most frustrating reason why somebody wouldn’t adopt or would say not today because they think I need to be bigger. I need to have more money to be able to afford it or to [00:10:00] deserve it. And it’s not true. It’s very accessible. Any company from five employees, ten employees, can be benefiting from technology like ours.

William Tincup: You can also see some of the change, whether or not they say it, or it’s just hidden. That may be the change management piece, of this is the way we’ve been doing it for ten years. Versus doing it in a more eloquent data driven way, I could see some folks… At least being scared, maybe not, maybe you can get over that pretty easily.

But I could see some people hiding behind change management as well.

Jordi Romero: Totally. And one of the biggest opportunities that we see is when there is change in the management. So for example, when a new HR manager comes into an organization, they will be very open. to explore what technology is being used and what could be used.

And this also happens in smaller companies when the ownership of a business is transferred, for example, generationally, right? The younger generation will come in and say, okay, there is no reason why we could keep doing things the same way we did 50 years ago, 40 years ago when, the other [00:11:00] generation started this business.

Unfortunately, this is a slow replacement, but it’s happening. And, a competitive force is pushing companies to do it sooner rather than later. That’s

William Tincup: right. That’s right. You mentioned doing work all over Europe. I want to not assume that you’re the the technology is multilingual.

So if not do you get asked about it? But basically the question is about factorial and y’all’s approach to being multilingual.

Jordi Romero: Yeah, so one, look, we were born in Spain, both personally and as a business, and Spain is a relatively small country compared to the global economy. And that was actually a huge advantage for us because it forced us from the very early days to be multinational.

And then we started localizing the product, both in language, but also in compliance, right? There’s different laws and different concepts in different countries, even inside the same country, different areas. Like in the States, for example, state by state, there, there are big changes in how HR needs to be processed.

So because we come from a relatively small country, we started making a platform that was very [00:12:00] modular and customizable to different local laws, regulations, and obviously language as well. And today we offer a solution that is huge local to a lot of different locations.

William Tincup: Okay. Let’s, let me ask you a couple of by side questions.

Your favorite part of the demo. So when you get to, on the occasion that you get to show factorial to somebody that never seen it before, what’s your favorite part of that demo or that experience for them? My

Jordi Romero: favorite part is when I show an HR manager, what the managers or the individual contributors in their company will be able to access.

Themselves and they immediately think of all the questions they will not need to answer because people will answer these questions on their own. And you see immediately the relief of thinking, oh my God, all of these people coming to me every day, every week, every month with this exact same questions will suddenly be selfer.

And that is a huge impact. The other [00:13:00] one is when we show a more complex workflow. For example, a process that involves different stakeholders like filing an expense report when an employee needs to file the report and then a manager needs to approve it. Then the payroll team or the HR team needs to take it into consideration for the payroll process, as well as the finance team, which needs to account for the expense.

Then you show a software that has the exact same piece of data. But in different versions visualized differently for the different stakeholders and people realize immediately they click and they say, wow, this is so much time saved. This is incredible.

William Tincup: I love that. I love it. It’s what’s interesting is at that point they can see themselves in it.

It’s wait a minute, there’s the old way. Once you know, once it’s like anything else, right? Once you’ve seen something, It’s like, how can you go back to the way you were doing it?

Jordi Romero: Correct, correct. And actually, to your question, you said the demo, right? I think the demo is the most important.

Once they see it with their eyes, such as theory, they visualize it, and, if [00:14:00] we have the time to configure a personalized demo, they see their own logos, maybe they see their own face in the org chart, and they understand how these workflows are going to work with their exact company. They immediately think, what have I been doing?

William Tincup: How have I been doing it wrong for so long? Also, they see themselves in it. Yeah, that’s always the way it’s like anything else. Whenever you see new technology, you automatically like, how can I believe that I’ve been doing it? This is the wrong way this whole time.

But at the same time, it’s enlightening because it’s like, yeah, I can’t go backwards. So now I just got to figure out how to pay for it, done, check. So for folks that this is their let’s say one of their first HR technology purchases. What are the, if you could script the questions for your sales team, what would you like prospects to ask your sales team?

What are the questions that you would, you’d feel like, okay we’re in a good place because they’re asking the right questions.

Jordi Romero: So when they start asking about. [00:15:00] Time related processes. For example, how many hours did the team work? What do I do when they need too many hours or not enough hours?

How do I process this? Do I compensate it with money? Do I compensate it with a pool of hours that they can use in the future? Like we start seeing that they understood the pain of managing their employees time and that is a sign that we’re gonna be able to help them a lot and that they will start Seeing the value really quickly.

We like to focus on one problem. So for example, when a client has all the problems in the world, it’s hard to prioritize. So the best is if they identified one clear acute problem, and then progressively we onboard them with that part of our product because our product is very horizontal, and then we’ll start showing them other parts of the product as they grow and progress inside Factorio, not necessarily on the moment of buying.

Jordi, that’s the first

William Tincup: time I’ve heard someone say that and I really like that because you identify the, out of the mountain of problems, what’s the [00:16:00] number one, what’s the biggest problem or the top problem, et cetera. Let’s go solve that. And then once they see success, and again, so using the technology, they’re being trained to all that stuff then it’s a matter of going, okay, now let’s go to the second thing.

Yeah,

Jordi Romero: absolutely. One step at a time. Prioritizing is one of the hardest things in business. So we do it ourselves and we try to help our prospects do it themselves as well.

William Tincup: You’d be amazing. That’s it. How rare that really is, because a lot of people, they want to boil the ocean. So it’s I’ll give you all your problems.

Okay we got all the problems in it. And it it’s a bit overwhelming.

Jordi Romero: But the truth, William, is it’s really hard to prioritize. I acknowledge that. It’s actually one of the most difficult things to do. So that’s why people avoid it

William Tincup: sometimes. Yeah. First of the approach. I think it’s good for clients.

I also think it’s good for your internal team, whoever’s managing CX. Because then they can say, okay, this is the problem. We all focus on that problem. Get that done. Everyone feels good about that. Check. Great. Second [00:17:00] problem, so I actually think it’s helpful for everybody involved. The last thing I wanted to talk with you about is success stories and these without brands or company names or any of that type of stuff, but just you, where maybe someone was skeptical or cynical.

about the change to Factorio and all of a sudden you can’t, they can’t imagine doing business without Factorio.

Jordi Romero: Yeah, I think, that happens, obviously some people are afraid, many people are afraid of change. And I would say, for example, some of our success stories in the hospitality business, there is a centralized buyer.

And then there’s going to be a lot of locations, right? If it’s a large chain, for example of restaurants or something like that. Usually at the local level, at the store level, there will be friction. And one of the things that we focus on the most when we do this onboarding is okay, HR, we got you.

You signed the contract. Now, please let me spend time with a few of your, most challenging stores. And we’ll make sure we solve their problem. And it’s important when we do that to set up the [00:18:00] account in a way that each store has. Relative independence, where they can manage their universe and at the same time, because everybody’s using the same platform, headquarters has a centralized view of everything that’s going on.

And they can run reports where they can see, comparative performance and comparative working hours and costs and everything that they’re working on with Factorio. But everybody feels like they have their own solution and that is configured just for them. And I think, in the case of hospitality and retail, which are two big industries for us.

This has been very successful, but it’s not always easy to get started with this change management at the store level.

William Tincup: I can see that. I can see that. Let me ask you about growth real quick. Obviously you’ve been building the business for a while. You’re all over Europe. You’ve, I believe you either got a headquarters, co headquarters, you’re coming to the United States, et cetera.

Yeah. We have

Jordi Romero: an office in

William Tincup: Miami. If we were having this call a year from now, what’s success in terms of growth?

Jordi Romero: So our business has been tripling for the last [00:19:00] three and a half years, four years, actually. And we want to keep tripling the organization and we’re tripling the number of customers, the revenue and the team where right now a little bit more than 1000 people in the organization.

And we were just under 100 years ago. So if you can see how compounding. Triple year on year works.

William Tincup: That’s fantastic, Jordi. This has been a, first of all, I just love what you built for the industries that you built for the small business, small enterprise. I think it’s just great because it’s a hard place to start.

Everyone rushes up market and goes to the enterprise or the multinational, but I just love what you build. Thank you so much for coming on the show.

Jordi Romero: Thank you so much, William. I’m obviously passionate about what we’re doing and I’m very glad that you invited us to come here and share it with your audience.

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William Tincup: and thanks everyone for listening. Until next time. [00:20:00]