Top 4 CFO imperatives for 2018 [iStart]
Editor’s note: This article originally appeared on iStart, March 2018. Read the full post here.
Amidst the continued pressure to deliver innovative, services-driven business models and continued growth, financial leaders are playing an important, evolving role. Already the most important interface with investors, the CFO now also needs to become a key force in supporting business strategy and growth.
iStart caught up recently with David Krauss, cloud evangelist for San Francisco-based ERP provider FinancialForce, in a wide ranging discussion on why the landscape for CFOs is shifting – and found it is the software business that has a lot to blame for the changing sands.
It is tied to a perceptible shift from ‘product’ to ‘service’, and adding lifetime value to customers.
“For the CFO of yesteryear, it was about cost containment and pure operational efficiency. Now, it’s about how the back office can deliver top-line growth to the organisation – and that means blending and evolving the responsibility for the CFO to facilitate growth, while cutting the cost of maximising lifetime customer value,” explained Krauss.
In short, it’s a shift from ‘cost’ to ‘revenue’. “That’s in the context of a services economy; it’s easiest to think of that in terms of software as a service, but it applies to many more organizations, too. Think of the old days, when you sold software on a perpetual license. You couldn’t care less what the customer did with the software, whether they even used it or not, because the relationship ended right there.”
With SaaS (or anything ‘as-a-service’, for that matter), the vendor cares a lot about what the customer does with the goods. If they don’t use it, they stop paying for it. They stop paying for it and the CFO, the traditional bean counter, has fewer legumes to worry about. And that’s not a good thing.