The CFO’s Guide to the Services Economy

by FEI Daily Staff

From the top down, there needs to be more involvement through the customer lifecycle, considering the influence customer experience has on driving long-term growth, increasing customer retention rates and profitability in this emerging business model.


The connected consumer, modern cloud and mobile technologies have changed the way businesses operate, with many shifting from product and single transaction sales, to services and subscription models. In fact, new research FinancialForce will be publishing this month has found that 70 percent of CFOs say services (professional services, subscription-based services, service-level agreements, managed services and usage-based contracts) are the source of more than half of their revenue. Further, nearly a third (28 percent) of CFO respondents specified that all of their companies’ revenues are services related.

However, most billing and ERP systems are not up to par and fail to support these modern business models and customer expectations. Instead, they rely on third-party integrations to fill the void, and remain disconnected from CRM solutions. This gap in the system can hold back new product initiatives or limit the range of business models supported, particularly new subscription-based models. What is most concerning,  though, is the impact on customer experience when the right arm of finance can’t see what the left hand of sales and engagement is doing.

This should be top of mind for CFOs, considering the influence customer experience and customer renewals have on driving long-term growth, increasing customer retention rates and profitability in this emerging business model.

From the top down, it’s become apparent that there needs to be more involvement through the customer lifecycle. About one-third (34 percent) of CFOs believe they should be more involved in customer satisfaction, retention and renewals as well as in product and service development (36 percent). As such, there needs to be a cohesive connection between the back office and the front office to ensure key wires are not being crossed in the new service-driven business model.

Here’s how an organization can do it effectively:

Starting From the Top

More than just managing financials, the role of the CFO has grown into that of a business enabler. The CFO’s job is ensuring the success of varying business functions within an organization. This means not just challenging every single move for the sake of keeping to budget, but maximizing the use of assets. Finding the balance is tricky. Ultimately the CFO needs to be an enabler of success while optimizing the use of resources.

The CFO must take more actions directly connected to the customer, and take factors outside the immediate organization into consideration to ensure he or she can help in a balanced way. This requires listening to different departments in a given organization and coalescing that insight with customer feedback, needs and pain points. The CFO role has become the intersection of the information highway that now cuts through organizations. Sales, marketing, delivery and support should all be taken into account at the inception of any decision—it doesn’t suffice to view the numbers after the fact.

The Right Tools for the Job

In light of these responsibilities, CFOs should seek solutions that keep pace with the customer, enabling them to iterate and move with agility as a result of real-time customer feedback. As Salesforce revolutionized the frontend of customer engagement, the backend must also be transformed. CFOs need to be able to control multiple revenue streams while managing them in a closed-looped billing process. Only with a single source of truth and the tools to execute on the insights that single truth offers, can CFOs be truly effective.

This can only be done with a unified cloud platform strategy that allows for a comprehensive approach to managing sales, services, customer support and success. One that helps and is accessible to the varying levels of an organization. A single cloud strategy provides a complete picture, from the initial opportunity to renewal, of the customer lifecycle.

If effectively deployed, cloud-based tools can help organizations consolidate billing sources across multiple contract types, support tier- and volume-based pricing, and make available real-time revenue reports or customer analytics. In contrast to systems that have been cobbled together, using a single platform for multiple business apps enables instant access to a single set of data so businesses can rapidly visualize the entire customer lifecycle, run full audits and control revenue sources from one place.

The services economy has been growing at an unbridled pace and “Everything-as-a-Service” has begun to disrupt all industries, from healthcare to finance. Still, many cloud business systems don’t reflect the trend and costly integrations with third-party solutions are required. Often times billing apps and accounting solutions are bolted on to CRM systems as a quick-yet-problematic fix. The result is a complex web of disjointed solutions that often replicate data and cause headaches for the sales, support and finance teams. It’s time to step away from this model in favor of a single cloud strategy that facilitates subscription and usage-based billing, and places the customer at the center of revenue management.

John Bonney is the CFO of FinancialForce.