The sales world is growing increasingly competitive at a lightning fast pace—and it's not slowing down soon. With only 69% of companies hitting their revenue goals, according to CSO Insights, it's not merely a matter of keeping up with the competition. Rather, organizations must find ways to plan and forecast more accurately, maximize efficiencies, and grow the bottom line as fast as possible.
Technology is becoming more and more important in corporate businesses as both an enabler for competitive advantage and a means to successfully reach sales goals and drive growth. In turn, this has increased executives’ roles in the technology adoption process, specifically CFOs.
The Trouble With Spreadsheets
Here's where a problem arises: According to CFO.com, more than 90% of CFOs say that being able to plan dynamically "in the moment" in order to compete in the fast-changing business landscape. However, 73% of organizations continue to use spreadsheets to manage vital data. The biggest issue? 80% of spreadsheets contain errors.
Accuracy is critical when it comes to forecasting and driving bottom-line growth—so why do CFOs continue to rely on this outdated, burdensome (and error-prone) technology? It's almost the equivalent to using a slide rule to add up your balance sheet—archaic and definitely not as reliable as a calculator.
The real reason is that 80% of CFOs recognize that investing in technology will help increase efficiencies and ROI, but they remain deterred by the perceived cost and complexity of new systems. But as any smart CFO knows—a good investment may have higher costs up front, but the payoff is worth it in the long run.
The same is true for technology. In fact, according to McKinsey & Company, more than 40% of CFOs spend the majority of their time on non-traditional finance responsibilities. This means they don't have time—and honestly shouldn't have to even worry—about their data integrity and if their spreadsheets' formulas are accurate or not.
The Need for CFOs to Adopt Technology
Xactly CFO Elizabeth Salomon is not new to the need for technology. In fact, in her 25+ years of working in the finance industry, she has become an advocate for technology in the business space. In a recent CFO Alliance Roundtable series breakfast event, Salomon shared her industry insight and 10 key reasons CFOs cannot continue to drive growth without adopting technology.
1. For effective insight, CFOs must understand their company’s key metrics/leading indicators.
In a sales-driven organization, data is extremely important. CFOs need detailed, accurate data to fully understand their company’s current health and accurately forecast future growth and obstacles. Technology creates a single source of truth. This ensures CFOs, other executives, and leadership teams are all accessing the same data and can align more effectively.
Using this key data, CFOs and finance leaders can evaluate the company’s progress towards sales goals and work with sales leadership to adjust plans and course correct in real time.
2. “It’s all about the data. Technology is just the enabler.”
CFOs help determine the data needed to successfully analyze and forecast for their company. In the roundtable, Salomon said that her focus is on obtaining the right data upstream and distributing it all the way through the ERP system. With a single source of truth, technology enables her to move that data more efficiently and ensure everyone is looking at the same set of numbers.
3. Most “software” problems are truly data/analysis problems.
More often than not, when teams can't get the data the need, they incorrectly believe software needs to be replaced because metrics aren’t looking promising–“I need this software/tool to solve this problem.” When a CFO and their team are not looking at the right data and metrics, poor performance can often be blamed on the software.
In reality, Salomon says, it is not really a software problem, but a data/analytics problem that technology solves and ultimately, enables the team to conduct more efficient analysis. A good solution for this? Adding data analysts to your team. Over the past year, Salomon has added a team of financial analysts to help her more gain better insight from company data.
4. Is more data better? Only as long as it’s the right data.
With the right technology, the data possibilities can seem limitless. However, there’s a big difference between a surplus of data and the right data. Technology makes it much easier to gather data, but it’s important that you’re getting the data that gives insight into sales and product performance, marketing ROI, and other measures of progress towards company objectives and goals.
Use your data tools wisely to create reports that show insight and analytics of the big picture, but also provide enough detail to complete the entire data story.
5. Data doesn’t solve problems–action does.
While the term “analysis paralysis” might not be a common one, it should be one you remember and actively work to avoid. Analysis paralysis happens when companies compile insightful data and analytics, uncover issues and obstacles in their path to growth, but fail to take action to remedy poor performance.
It’s important to understand that data will help uncover problems because you can pull data to measure almost anything. However, that data will not solve those problems–only people can. Once you’ve uncovered problems, it’s company leaders’ responsibility to develop action plans and provide the means necessary to make changes and improve performance.
6. The role of main technology buyer is shifting from CIO to CFO.
Traditionally, CIOs were the buying authority for all new technology. Today, the CFO role is evolving as they are becoming the main technology buyer, especially data and analytics tools, in companies because of the their high involvement in data analysis and sales forecasting and planning.
As CFOs and finance leaders become more involved in technology adoption, it’s important to remember to step back and consider the tools you are implementing and the effects they can have on your business. Leaders should also take advantage of the benefits of involving technology users in the buying process. Input from individuals who will be using the technology can be the difference between buying the right and wrong technology tool.
7. Gathering data is one thing. Communicating data effectively is another.
Because analysis paralysis (see above) can be a big problem for companies, it’s important to focus on communicating what the data tells you and the action plan moving forward. Ultimately, the data should indicate if your incentive and territory plans are creating equal opportunities for sales reps and if they are driving the right behaviors to achieve sales objectives.
Using AI tools will help automated the data collection process. The time saved using technology should then be invested into effectively communicating metrics and next step plans, so that sales leaders and their reporting reps fully understand what is expected of them and their role in the success of the company.
8. The future of finance is data analytics and artificial intelligence.
Finance relies heavily on data and analytics to accurately forecast each year. Having the data at your fingertips will only make this job easier. The introduction of machine learning predictive analytics will help companies predict possible outcomes and make well-informed decisions based on their forecasting data.
9. Recruiting finance talent starts with the right mindset.
Recruiting for any role can prove to be a difficult task–first finding talent, then retaining them. Finance is no exception. For Xactly CFO Elizabeth Salomon, finding top finance talent isn’t always a challenge when you don’t look purely at candidates’ resumes, but rather their mindset.
Salomon said the mindset starts with her and is something she looks for in every person she hires to her team–being a business person first and a finance person second. With a business-first mindset, individuals will be driven to learn, take the analytics, and find solutions to challenge the status quo and drive for change.
10. Culture is the most important part of retaining talent.
Alongside the right attitude and mindset, culture fit is one of the most important aspects of attracting and retaining top talent in any field. Even star talent recruits will struggle to succeed in a position if they aren’t a good culture fit for your company. It’s important to find a good mix between talent, drive to learn, and culture fit when recruiting top talent in any field.
Want to learn more ways CFOs can drive growth using technology? Download the guide, "3 Key Opportunities for the Modern CFO."