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Expert Advice for Medium and Midsize Businesses

How to Harness Finance in the Cloud for Growth

Di Seghposs
Senior Director, Product Marketing

My colleagues over at The Modern Finance Leader have a mantra: “Finance is the new guidance system for the enterprise.” It means that the traditional role of the finance team is shifting, from accounting and cost oversight, to analyzing business performance and identifying new opportunities.

This is just as true for small and medium business as it is for bigger companies—as demonstrated by the CFO Alliance 2017 CFO Sentiment Study.

More than 500 senior finance leaders responded to the annual survey, and nearly three-quarters of those companies have less than $250 million in annual revenues. According to the study, four factors will determine SMB success in 2017:

  1. Expanding relationships with existing customers
  2. Marketing execution
  3. Operational efficiency
  4. Adding the right talent and upgrading existing talent across the organization

Moving finance to the cloud can positively influence each one of these factors. Let’s examine how.

1. Expanding Relationships with Existing Customers

More than 40% of study respondents said if they were given an additional $1 million in budget, they would allocate funds to hire sales and marketing professionals. While CFOs understand the importance of sales and marketing, they also know it costs less to expand their current customer base than it does to attract new clients. They’re taking a more holistic view of the cost of customer acquisition. They’re not just looking at the cost per lead or cost per click.

This is because business models are changing in the digital economy—and customer loyalties are changing with them. Digital business models are often built on renewable subscriptions (software-as-a-service) and repeat business (AirBnB). Companies need to ensure a great experience in order to keep customers coming back—month after month, year after year.

With cloud solutions, you gain better insights into customer behaviors and revenue drivers. For example, you can access real-time data that shows which customers are buying additional products and which ones aren’t, so you can react quickly with the appropriate follow-up response.

On-premises solutions don’t provide the real-time access you need to save customers who may be on the verge of leaving, or offer more goods and services to customers who are more active. 

2. Aligning Sales and Marketing with Finance

Does your sales and marketing team truly understand which products and tactics are successful? This is another example of how finance professionals can bring key insights into their organization’s marketing strategy. CFOs recognize the importance of marketing data. If they were given $500,000 to allocate toward marketing, 44% of CFOs said they would spend the money on market research to improve the company’s understanding of addressable markets.

With the right skills and tools, finance can help marketing understand which products are selling the best, which products are the most profitable, and whether they should focus on higher-margin items.

Cloud solutions—especially a unified cloud solution that provides insight across lines of business (finance, customer experience and HR) can help ensure that marketing and finance are aligned on brand awareness. For example, marketing can use data from social channels to gain insight on customer sentiment and help determine intangible KPIs, such as brand value.

3. Increasing Operational Efficiency

Today’s demand-driven economy forces companies to be more agile than ever. To accomplish this, you need systems that drive as much automation as possible—so that your team has sufficient time to devote to analysis and strategy. Finance leaders express worries about the lack of automation capabilities in their current IT systems.

According to the survey, 39% of respondents said they were concerned with their company’s information, data, and communications systems. Meanwhile, business agility is critical, with one-third of the respondents indicating a shift in their top financial, risk, and operations issues.

The cloud brings more agility to organizations because it’s more operationally efficient than on-premises systems. It enables faster implementation of updates enabling users to consume innovation at a much faster pace than on-premise upgrades.. And it provides the visibility companies need to make faster decisions—such as changing business models to keep up with new competitors, or shedding businesses that no longer meet growth or ROI standards.

4. Adding the Right Talent and Upgrading Existing Talent

The workforce is transforming. As Baby Boomers retire, Millennials fill the void with different skills and expectations. Why is this important? Consider the following CFO study results:

  • 66% of finance leaders characterized human capital acquisition and retention as of concern or great concern in 2017
  • 90% said they would invest in acquiring and/or upgrading finance talent in 2017
  • 76% identified the ability to motivate and challenge Millennials as a concern in 2017

While the workforce transforms, so too does the role of the finance organization. New hires need more than the ability to report on the data. They also need strong analytical, communications, and influencing skills so they can serve as a true partner to the business.

The cloud drives the need for many of these skills. Finance leaders must be able to process the new types of analytics and Big Data made possible through cloud solutions.

The Future of Finance: Next Steps

Finance leaders who want to positively impact their organizations should take the following steps:

  • Be more engaged in customer relationships
  • Understand what marketing needs to optimize execution (and help them get it)
  • Review business systems to ensure they enhance strategic agility across the enterprise
  • Own the optimization of human capital in the office of the CFO

All of this will help you earn the role of “chief trusted advisor” and become a true guidance system for your SMB.

You can learn more in our online center for SMBs, or download the complete survey results.

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