512: Delivering on Solar’s Promise | Ronen Faier, CFO, SolarEdge Technologies

Listen to the Episode Below (00:41:47)

As Ronen Faier recalls the career-building ups-and-downs of being an entrepreneurial CFO, few memories appear to be more vivid than that of a meeting with Guy Sella, a seasoned Israeli entrepreneur, who invited Faier to lead the finance team of his solar start-up. Not yet a midsize firm, SolarEdge Technologies had only about $9 million in annual sales, with roughly 100 employees, when Faier received Sella’s invitation.

Having already experienced firsthand the heartache and financial repercussions of climbing aboard a struggling start-up, Faier says that he was confident that this time things would be different.

“I saw this amazing entrepreneur with a very deep technological understanding of the field as well as a deep understanding of business, and I knew that you seldom find these in one individual,” explains Faier, who accepted Sella’s invitation in 2011.

Eight years later, SolarEdge has close to 2,000 employees and last year reported sales of $937 million. Faier says that the company’s impressive growth is perhaps most visible inside the U.S.’s residential realm, where use of SolarEdge’s offerings has jumped from a market share of less than 1 percent in 2012 to nearly 56 percent today. “Our CEO understood that if we could get our cost point to where we were selling at a price almost equivalent to that of our competitors and at the same time offer superior technology, we would experience rapid growth,” says Faier, who has sought to outfit SolarEdge with a finance function that prioritizes cost visibility as it manages rapid growth. –Jack Sweeney

CFOTL: When it comes to reporting or visibility into the business, what have you done to increase that visibility?

Faier: About two and a half years after I arrived, the information systems under my management implemented a BI system that allows the company to have a very clear understanding of where the business is at any given point in time. Actually, this is something that changed dramatically the way that we, as management, work. I can tell you that prior to having the BI system, each one of the managers used to have their own version of the truth. If you looked, for example, at what a shipment to a customer was, I could tell you that to our VP of operations, from his point of view, a shipment to a customer was anything that left the factory. To the VP of sales, a shipment to a customer was anything that arrived at the customer. So, when you looked at them and asked about these shipments, they used to give you different answers. What the BI system allowed us to do was, first of all, to create one language in which all of us as management can talk.
The second thing that it did–and this is the beautiful thing about information systems and BI systems in particular–was enable us to get online data. I can tell you that the first thing that we did was to create a dashboard in which we could see at any given point in time and at intervals of one hour the status of our shipments, our backlog of work orders that we needed to fulfill, and the gross margins on those invoices that we issued.

This resulted in two things. First of all, now we had only one version of the truth. The second thing is that each and every management can in its free time go into the BI and see exactly what is going on. I would say that over the few years since we implemented this system with only one dashboard and only one set of what I would call parameters that we’re looking at, SolarEdge already has developed tens if not hundreds of models of BI that are taking almost every piece of information that exists and giving back real-time data. So, whatever I’m looking at may not be the same thing as what the VP of operations is looking at or the VP of R&D, but the systems allow each and every management member to get any online, real-time data that they need for their day-to-day work. jb