The role of the CFO has changed dramatically in the past 20 years. Budget cycles have gotten shorter, margins of error tighter, and the need to automate the budgeting, planning and analysis processes is exponentially greater.

The business world is accelerating and CFOs must be more proactive and forward thinking to keep their companies ahead of the curve.

Host Analytics CFO Ian Charles is in a unique position to witness these changes. His job as the head of finance and corporate development for a SaaS provider of financial performance management software gives a first-hand view of the challenges that CFOs face—not only from his own experiences; but also, those faced by Host Analytics CFO customers. With 25 years of experience in corporate finance, Ian has spent the last four years overseeing Host Analytics rapid growth, including a doubling of the employee base and a jump in revenues of 500 percent.

In a recent podcast interview on CFO Thought Leader, Ian shared his insights into how the role of the CFO has changed over the past few years, and what today’s CFOs must do in order to ensure their companies’ future success.

Perhaps the greatest shift in the role of a CFO, he believes, is the change of focus from the past to the present and future. Traditionally, the finance department generated reports on the historical performance of the company. But now, that historical focus has been replaced by an urgent need for strategic analysis of current and future growth prospects. As part of that new perspective, CFOs today must take a more holistic look at their companies’ overall business operations and market development.

“It’s evolving to be more operational, more in tune with the needs and requirements of the customer base,” he said. “CFOs are looking at the customer more closely, looking at metrics like the lifetime value of a customer vs the cost of acquiring that customer, and why customers chose the product and why others reject it. It’s deep diving into the question of how to reduce the reasons why customers churn and increasing the value they get from it.”

A good measure of company’s success with pleasing customers is the lifetime customer value metric which, Ian noted, is also a prime indicator of the company’s future financial health.

Another increasingly important benchmark of long-term success is that of annual recurring revenue (ARR). ARR is especially critical for SaaS companies, of course, because they depend on subscription renewals as the main source of income. But it’s a valuable measure of financial health for other companies as well.

“The most important driver of future shareholder value and future growth is the growth of annual recurring revenues,” said Ian. “Every company has a different level of churn, but at the end of the day, if there’s more water falling out of the bottom of the bucket than is being put into it, you’re not going to survive very long.”

A successful CFO will also promote a progressive and transparent culture, one that emphasizes collaboration and information sharing.

“Some finance organizations are content with looking off the back of the ship and reporting historical results, while others are very proactive in understanding the operations, the nuts and bolts of the revenue base, or why customers chose the company,” he said, adding that a culture of information and analysis is critical for finance executives today.

Transparency and visibility are also important qualities in the office of finance, according to Ian. Everyone involved in budgeting and planning should have access to the appropriate level of data.

Otherwise, “when you’ve got departments calculating projections on spreadsheets that finance either doesn’t have access to or isn’t connected to the overall company plan, you wind up with surprises.” And they’re rarely good surprises.

Regardless of how decisions get made in a company – bottom up, or top down – the people making those decisions should communicate and work with the same set of data.

At Host Analytics, the finance department assigns financial analysts to serve as liaisons between finance and other parts of the business. These liaisons facilitate collaboration between finance and the rest of the organization, and help department managers navigate financial issues – such as understanding compensation trends or how to budget for growth. That ensures that everyone is working with the same data, processes and standards.

“Communicating is critically important. Often what’s being said isn’t what’s being heard,” he explained. “Clarifying the message and openly communicating is something that is core to my success.”

Download the episode below and listen to Ian as he explains how effective communications and measuring the customer experience are now central to CFO success.

Listen to Podcast

23 responses to “The Progressive CFO: Planning for the Future vs Looking at the Past”

  1. Nicole says:

    I did not know how drastically the role of CFO has changed in today’s business times. Their presence in the workplace is an important one and nice to see involvement in the operational growth and success of a company.

  2. Chris Knight says:

    The transition from looking at historical to looking forward may seem easy, however is extraordinarily hard for organization. While I personally trive with change, I see a fast amount of financial professional very hesitant with change, I think what drives this is how long a company takes to close the books. If you spend two weeks working on the close, one week cleaning up loose ends there is no time to pick your head up and see that there is a better way. Host Analytics is a part of the solution at our company.

  3. andrea says:

    It makes sense that organizations want to focus on present and future rather than the past. Investors care about annual recurring revenue because it indicates predictability and stability in a tumultuous market.

  4. Janet says:

    I hope our CFO will start forward thinking, he is always too concerned about the upcoming audit of past financial results to shift his perspective to the future.

  5. Jea Dane says:

    You have to look ahead in order to be proactive. Any good CFO creates several future looks and than can be proactive about having a plan to address situations that come up. Using key Metrics to assist in analyzing company health is important. Not easy is defining those key metrics.

  6. Edward Mitchell says:

    Our has had a nice blend of using historical analytics with an eye to the future.

  7. Nikola says:

    Operating a global business in a fast-changing world, you need to have both a great experienced leader and a strong analytical and data-driven finance team. Its a must!

  8. Tina says:

    Understanding the future revenue stream and how the company makes and maintains that revenue is an important concept that needs to be focused on and reviewed on a consistent basis.

  9. Han Shih says:

    Quickly pull together forecast and easy comparison to historical trending is a good combination of information in the decision making process for either finance or operations. Host Analytics if one of the applications to provide that kind of environment.

  10. Han Shih says:

    Quickly pull together forecast and easy comparison to historical trending is a good combination of information in the decision making process for either finance or operations. Host Analytics if one of the applications to provide that kind of environment.

  11. Lauren Mazzone says:

    Well said and I couldn’t agree more!

  12. Jeremy Zhao says:

    This article is very accurate on the changing focus of the CFO/finance team. It’s hard to steer a car looking at the rearview mirror. It’s important that everyone on the finance organization is focused on future growth and Host allows team members to collaborate more efficiently

  13. Samia Blande says:

    The role of CFO in the workplace has changed in today’s business times, He is playing an important role in the operational growth and success of a company. He is always concerned about the upcoming financial results to shift his perspective of the future.

  14. Kate says:

    Customer retention and keeping employees are always a must for the company

  15. Lanny Baldwin says:

    I couldn’t agree more. Since our CFO started a few years ago, I’ve noticed his shift in a more forward thinking approach.

  16. Megan says:

    “A successful CFO will also promote a progressive and transparent culture, one that emphasizes collaboration and information sharing.” I believe this is absolutely essential to a successful organization!

  17. Jamie says:

    Agree with Andrea – It makes sense for teams want to focus on forward looking results vs reporting on history

  18. David Cannon says:

    Forward looking results is important because business are always changing.

  19. Matt Laucks says:

    Based on the rapid growth as mentioned in the article , the way of reporting based on historical performance will be irrelevant. It is necessary to have methods that can provide strategic analysis of current and forecast for future growth prospects.

  20. Monica Erin says:

    Having accurate forward looking financials is vital to business planning

  21. Nikita Javeri says:

    Forecast accuracy is key to business planning

  22. Zach says:

    Also agree, more accurate forecasting models is vital to business success.

  23. Hunter Scrivner says:

    Agree that timely, accurate financials are key to business planning.

Cecile Gregoire is the director of public relations at Host Analytics where she plays a key role in raising awareness of Host Analytics as a thought leader and market leader in cloud EPM. Cecile has more than 15 years of B2B and B2C PR experience with a deep understanding of the high-tech industry landscape. She is passionate about growing and promoting brands; and holds a bachelor of arts degree in communications from San Diego State University.

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