Podcast
November 24, 2022

10 SaaS spend management insights for modern CFOs with Chris Ortega

The CFO’s role has undergone a shift after the pandemic. SaaS spend management is no longer only about cutting costs but more agile thinking. Chris Ortega, the CEO of Fresh FP&A, in conversation with host Siddharth Sridharan, co-founder and CEO of Spendflo.

SaaS spends account for the top 3 - 5 costs to a company. As a result, Chief Finance Officers (CFOs) have a growing responsibility to get the most value from their SaaS purchases without affecting the company’s budget. These are the top highlights from Chris and Siddharth’s 40-minute conversation that can help CFOs understand the modern demands of their role.

Key Takeaways

Companies are finding it challenging to optimize growing SaaS subscription spend: 

  • SaaS costs are one of the fastest-growing expenses after payroll. The average company uses 120 tools. Each department spends hours on SaaS renewals per month.
  • During the pandemic, there was a need for people to be productive which led to a surge in SaaS buying. This decentralized SaaS buying has continued post-pandemic.
  • Since everybody has free rein with SaaS stack spending, it has brought in too many solutions for the same problems and created confusion about SaaS ownership.

SaaS spend per FTE has increased afr the pandemic:

  • If an organization’s SaaS spend for Full-Time Employees (FTE) was $4,000, after the pandemic, it has become $7,000.
  • Some 200-people organizations spend up to $5 million in SaaS spends. The number of SaaS tools is being consolidated and the quantum of spend is increasing, with SaaS companies showing nearly a 7% price hike.
  • The ratio for cloud spend to SaaS spend is 1:1. There’s a 2:1 ratio to SaaS spend if you are a B2B business and 3:1 if you are a B2C business.

The CFO role has evolved during the pandemic:

  • Before the pandemic, finance was considered the organization’s scorekeeper.
  • Due to the uncertainty of the pandemic, CFOs took the reins and became collaborators and communicators, drove clarity, and built communities in businesses.
  • Modern CFOs want to empower teams by providing the correct data and the right tools for people to make the right SaaS spend decisions.
  • Traditionally, the office of the CFO has dealt with supply. However, there is a gap now because businesses require CFOs to have many intangible skills. These modern requirements have transformed a CFOs role into that of a Chief Future Officer.

Balance accuracy and precision while budgeting:

  • Businesses spend 3-4 months on budgets that become worthless after a certain time. There are three things to keep in mind while setting a budget: 
  1. Be accurate and precise
  2. Be realistic 
  3. Be agile.
  • Accuracy involves a 60-75% confidence interval of the budget’s reach.
  • Precision involves an 85-95% confidence interval that the budget will be correct.
  • Be realistic while setting a budget and understand that clear communication will help set realistic goals.
  • Stop measuring costs minutely and set up a rolling forecast system for budgeting to save time and effort.

Understanding your AP landscape can help you benchmark your SaaS spend:

  • CFOs can optimize cash by taking a look at the landscape of their business
  • People first look at payroll to create better cash flow and gloss over software spend
  • When CFOs check their Accounts Payable (AP) statement, it can provide many leads to cut costs during budgeting season

Build partnerships within the business:

  • Partnering inside your business can help you understand its true value proposition, and it helps other stakeholders think critically and strategically about the business
  • Build trust and competency through monthly meetings with stakeholders
  • CFOs who understand how to help and support each team will learn to increase efficiency, get better revenue, grow customer experience, and build collaboration.
  • Companies should also invest their extra dollars in people, which can lead to a merit increase and professional development while attracting the right talent.

Hiring industry experts saves time:

  • Hiring and training team members to work on SaaS app renewals or procurement will waste time.
  • A great external partner can negotiate on your behalf, wrangle contracts, and take charge of data for better SaaS operations management.

Small suppliers are chosen more often than big suppliers:

  • Many businesses choose small or medium suppliers for their price flexibility.
  • They are viewed as partners instead of vendors.
  • Companies want to understand the product roadmap and how the SaaS company incorporates customer feedback.
  • Software adoption and implementation are tiring, and small suppliers can provide better value to businesses during this process.

SaaS volume and auto-renewal are hurting the bottom line:

  • 10-15% of employee spend is on SaaS subscriptions.
  • The auto-renewal feature also increases SaaS spend because the entire amount is paid in advance whether the software is used or not.

People should be the last place you look to when cutting costs:

  • The modern CFO needs to have an overview of SaaS spend, contract negotiation, renewals, and the software's value to each department.
  • Rather than looking to cut costs through workforce reduction, the finance team can learn how to make the best use of their SaaS spend.

There is a whole lot more to SaaS spend management that the modern CFO should know. To better understand the entire conversation between Chris and Siddharth, check out this transcript.

Download book "Strategic SaaS buying for CFOs"

Transcript

Siddharth:

Hey folks I'm Sid. I'm the co-founder and CEO of Spendflo. Quick introduction about Spendflo - we help high-growth companies by negotiating and renewing all of their SaaS and automating the entire procurement process for guaranteed savings on SaaS along the way. We're joined by Chris. I'll let him introduce himself. 

Chris:

I’m Chris Ortega, CEO of Fresh FP&A. We help businesses transform and scale their finance organization by providing factorial, CFO, FP&A, and finance support. So excited to be here. 

Finance teams are struggling to get SaaS spend visibility

Siddharth:

Let me get started with a quick overview of what's happening in the market today. SaaS spend has become one of the top 3 or 5 spends for a lot of companies today. It's one of the fastest-growing expenses on a company’s balance, apart from payroll. Payroll is always going to grow on a scale. 

The average company now uses 120 different SaaS tools. That implies that you're doing 10 - 12 renewals every month. And the facts are, it's not just you, it’s not just the finance team, but it’s the individual, the department head, someone from your IT team, legal, compliance, InfoSec, finance, and procurement. Then your procurement teams are also involved. And imagine these folks are spending hours every month doing about ten renewals.

For finance, getting visibility into all of this is becoming a challenge. How to budget for this going forward and how to optimize continuously is one of the biggest challenges that we hear about. We have CFOs tell us that at Spendflo. We see data on spends on a monthly basis.

Modern CFOs are point guards for businesses

Siddharth:

You'd think that SaaS spends are going down, but it's not. Instead, people are moving spends from one place to the other. 

“In general, we see SaaS spends being an average of 25% of everybody's balance sheets today, across our customer base and the market.”

That's just to set the context on where we are. So this problem has become finance's problem for some reason in the last couple of years. Primarily because the role of finance inside these organizations has evolved. The modern CFO is not a referee any more. They're more of a point guard. 

They want to provide the right data and the right tools to the right people to make the right decisions. They don't want to be the referee who's blowing the whistle at the end of the day; who's not signing the contract. So, we've seen this shift. 

The changing eras of the modern CFO

Siddharth:
Chris, I'm curious, what shift are you seeing in the modern CFO, and how has that role evolved in the last couple of years?

Chris:

Yeah, I think I’d like to distill it down into 3 different eras. Before the pandemic, finance was the scorekeeper. That was the value proposition that we brought to the business. We used to track how many widgets we will do in the budget. During the pandemic, the CROs, Chief Marketing Officers, and Chief Sales Officers found too much uncertainty and complexity. We didn’t know how to navigate through this. 

That's where the office of the modern CFO stepped up. We took the reins. We were great collaborators. We were great communicators. We helped connect the business. We helped drive clarity in a lot of chaos, and most importantly we built a community. With that second era, the business baseline is already established for the third era that we're walking into.

The business now expects the office of the CFO to have a lot of these intangible skills. They want the CFOs of the future to speak the business language, tell a story, collaborate, and help navigate through uncertainty. 

A change from CFO-No to CFO-Go

Chris:

Traditionally, the office of the CFO is the supply. We are not technology adopters. We're not the ones that are thinking about process automatization. We're not developing high partnerships. We're not looking at those six core pillars of transformation. Now we've got this gap. The business domain is here. The office of the CFO traditionally has this supply. 

“When demand is higher than supply, that is a premium. So now there's a premium being established for the office of the CFO and this is where we have an opportunity to leave a tremendous legacy. This is where the new baseline of what the office of the CFO is going to be.”

I just attended a conference in LA. It's no more about being the CFO-No it's about being the CFO-Go. We're not the Chief Financial Officers. We are the Chief Future Officers. The biggest change in the office of the CFO is that we need to bring clarity to operations. That is the new definition of the CFO. So those are the different evolutionary periods of the CFO. 

Siddharth:

Yeah, that makes sense. I love the idea of the Chief Future Officer. It's super powerful and the supply-demand is now available. People and businesses every day are looking for that CFO, VP of Finance, or Director of Finance who can take them one step further. What that implies is your sales is making better decisions, your marketing is making better decisions, and your customer success is making better decisions because of the platform that the office of the CFO can provide to all of them. That's fantastic. 

All stakeholders are finding it challenging to get visibility on SaaS spend

Siddharth:

We see a lot of CFOs or VPs of Finance struggling with data.  Or wondering how to get visibility into all of this. One of the biggest problems we see is because of the decentralized buying of SaaS. Everybody owns their SaaS tools but has no idea about renewal dates.

What are some tips and tricks that you've developed from your experience just to wrangle that data together and to get visibility for all stakeholders?

Chris:

Drawing back during the pandemic and post-pandemic, some organizations were already set. They had the infrastructure, the technology, and the empowerment to go remote. Some organizations were not prepared. When people went remote, they had to have Zoom, Peloton, and more.

The organization was empowered and enabled to get whatever tool and technology you needed. If you needed teams, if you needed project management tools, if you needed agile scrum software, everybody had free rein because at that time we still needed to be productive.

Now you're getting to an element where some people are fully back, some people are remote, and some people are hybrid. Now, you’ve these pockets of spend just sitting out in places. You've got marketing tools and technologies that do 5-6 different things.

Your AP statement is a goldmine

Chris:

You've got 10 Account Payable (AP) solutions and don’t even get me started on the Travel and Expense (T&E) side. As I've led high-growth SaaS businesses, this was always one of the first places I went to. This is where I think I challenge all finance leaders. Too many times when we think about how we need to optimize our cash, we go to the most valuable resource, we go to the people. But that is a whole other greenfield opportunity.

“It’s not about cutting the systems, it's about getting the landscape. The number one way that you can start managing your SaaS is by looking at your AP. Go download your AP file and send it over to Spendflo.”

That is a gold mine of analysis. You can look at so many different things. There are so many opportunities to get so many quick wins, but again, we don't have that information. Go partner inside the business, and look at SaaS spend which is a greenfield opportunity. 

Siddharth:

That's the first place we look when we speak to finance. Give us your AP statement and we'll benchmark your spend for you to give you an idea of how much you can save. The funny part is when you need to optimize for cash, everybody looks at payroll. Everybody looks at people and they don't look at software. 

Investing in people can generate a better ROI

Siddharth:

When you optimize SaaS spend, people take that money and put it into other Saas tools. Every CFO or department head that I speak to wants to spend that money on some other SaaS tool, which can give a higher ROI. 

Chris:

The CFO found this green opportunity for SaaS spend. If they are looking at where to place the next dollar for their team, put those extra dollars into your people. 

Give it to your people. Get that merit increase, get that professional development, get that opportunity for your people. That's another way that I think is challenging the CFO mindset. 

So many times we're being cost conservative and when it comes down to investing in the new ERP, upscaling our talent, or investing in being better finance business partners, we're a little bit reluctant to make that spend on us.

I am challenging that mindset. If you find that extra spend, don't give it back. Find a way to invest that in your teams, both directly and indirectly. 

Siddharth:

Most of the SaaS is not controlled by finance. The department heads control the spend. At the end of the day, if you go to your VP of sales and say, ‘I was able to save you $200 by using Spendflo, what are you going to do with it?’ The first thing that the VP of sales is going to do is buy something else. That’s typically going to be the answer. 

So it's very fascinating that you say you need to reinvest that in people. That's a very strong value proposition because it attracts the right talent to you. 

Understand the value of your SaaS spend by partnering inside the business

Chris:

When we talk about SaaS spend related to people, this is another place where the office of the CFO cannot partner outside the business. Here's another golden nugget for everybody to take away. If you want to get your arms around your SaaS spend, you have to build that relationship with your Chief Information Officer (CIO). Build that relationship with your technology officer. 

Don’t go to the business and say, ‘Hey, your SaaS spend is a million dollars over, I need you to reduce it by $70,000 or by 30%.’ 

Don't do that. Partner inside the business and maybe you'll eventually get to that point. You will get a lot further when you say, ‘Hey look, we're using these tools in our tech stack, what do you think makes the most sense to make the most effective use out of our business?’

“Seek first to understand the value of it. Then it’s not you making the cuts; it's having them critically and strategically think about their business.”

The right industry experts can revolutionize your SaaS spend

Siddharth:

The fascinating part is that there's a step above that where nobody wants to do renewals every month. No department wants to be talking to the vendors and doing renewals every month.

When you were running these organizations, at what point did you think about hiring a headcount to buy, procure, and manage all your SaaS tools? Did you ever think about it or should that headcount even exist? 

Chris:

I've grown up in SaaS and grown up in industries from seed startups to enterprise-level companies.

“The number one thing is that I kept a lean team. I never believed as a CFO to have people solve basic business problems. The thing about it is you do have a procurement team, but this is where the value of having a great partner like Spendflo comes in.”

When I was leading a SaaS organization, it was just 3 of us. It was myself, a controller, and a staff accountant. We wore all the different hats. We were legal, contract administrators, negotiators, procurement, finance, accounting, tax, you name it. The reason why we were able to be so effective is that we had great partners.

If you're looking at your team and you know there's an opportunity, but you can’t tackle it on the list of things as a CFO, find a partner to do that negotiating and wrangle up the contracts. Why would I want to sit there and figure out how to reach out to my network and see what the best price is when my license renewal is two months away?

“Outsource that, get it to an expert, get it to a partner with all that industry data. They've been there, they negotiate on your behalf, and you just reap the profits from that. I was always happy if a business came to me and said, ‘Chris, we can guarantee you half a million dollars, but of that half a million dollars, we want $60,000 from that.’ As a CFO, I'm going to save $500,000. That is a greenfield opportunity for CFOs to think about."

How do we bring in partners that have the expertise and the knowledge? If I was going to invest that in somebody, it would take 6 - 10 months. If you have a procurement team, they're not looking at all your contracts; they're looking at your top 5. 

So that, to me, is where you bring in that partnership to accelerate the impact on SaaS spend management. 

Follow the three rules of budgeting

  1. Be accurate and precise

Siddharth:

This leads me to my next question. When you're going through budgeting season and asking the head of marketing about investing for the next year, do you have any rule of thumb from a Financial Planning and Analysis (FP&A) perspective, specific to SaaS?

Chris:

I can't tell you how many budget cycles I've been through. I've been through very short ones and very small ones. I have 3 insights that people, while budgeting, need to think about. 

The first one is probably going to be the wildest -  Your budget is going to be wrong.

It's going to be wrong, just accept that. Why do I say that? It’s because too many organizations go through all these cycles, board reviews, VC reviews, and all this, and then get to the beginning of December. You've been working with this core set of numbers and then in February, those numbers that you just spent four months working on become worthless.

“Balance accuracy versus precision. Accuracy is a 60-75% of confidence interval that this is where it's going to be. Precision means being 85-95% confident that it's going to be right.”
  1. Be realistic

For finance organizations, regardless of what industry you're in, be realistic. That's the second one. Be real with yourself. You're going to be the most precise in what you do on your budget in those first 90 days.

First off, balance accuracy and precision. The second one is to make sure that you set the right communication. 

  1. Be agile

The third piece is to have agile budgeting. The number one thing that I see a lot of finance leaders do is measure too much. Realistically let’s say that you have 25 drivers in your budget; how are you going to get better over the next 12 months? That's not possible. Simplify your business. 

A lot of people take this mindset where the budget has been this 3-4 month process where everybody has meetings and conversations. The ROI of the 4-month annual budgeting process is going to be completely worthless. Get into a rolling forecast. That would be my gold standard. 

The 2 SaaS spend characteristics that can affect a budget

Siddharth:

Then do you have a rule of thumb for how you budget for SaaS spends and cloud spends inside an organization?

Chris:

So I always look at it in terms of employee volumes. Typically people are going to be 60-70% of your operational spend. SaaS in certain businesses could be somewhere between 10-15%.

The first place that I would look at is the resources that you have. There are a lot of good point solutions. The thing about point solutions is it's like a baton being passed. If you have a marketing team of 5 people, does it make sense that you have 15 different marketing solutions?

Sometimes I look at those ratios of SaaS spend, licenses, and solutions as a place of FTE volumes. That's a good proxy.

The second thing is contracting those SaaS spends. That's an uncovered gem because a lot of these SaaS companies set you in and say ‘Your renewal is up, it's annual in advance.’ Now you've paid this entire SaaS contract, and you haven't got time to look at the contract and get the most favorable terms.

“There's a lot of cash flow implementations to SaaS spend. Not just the expense side, look at the cash characteristics of that because that can hugely impact your business.”

Siddharth:

The worst sin is the auto-renewal clause that triggers 16 days before the renewal date. It's legal and, for some reason, companies don't let you take it out. That's a piece that's weird.

SaaS spend per FTE has grown significantly

Siddharth:

A rule I use as well because we see this data on a day-to-day basis is SaaS spend per FTE. What we've been seeing, pre-pandemic SaaS spend for FTE was about $4,000. Right now it's $7,000. So, in the last two years, it's increased by another $3,000.

It's incredible and we’ve seen spends of 200-person organizations go into $5 million. Clouds spend is a whole other beast altogether. The sum that I use for cloud spend is if your SaaS is a million, then your cloud's going to be another million. So that’s 1:1 if you’re a B2B business. 

If you're a B2C business, the rule of thumb for cloud spend is probably 3. So, your cloud spends are 3:1 to your SaaS spends. I thought it would be interesting for folks to use that in the budget.

Chris:

Hey Sid, we got a question from Adrian. He asks, ‘Why are SaaS expenses on the balance sheet?’ 

Exactly what I just mentioned, it's prepaid. So if you get an annualized contract, you pay for it right now, and you're going to be amortizing that prepaid for 12 months. So it will sit on the asset line under current assets. That will be the prepaid balance sheet impact and it has an impact on the cash too.

Siddharth:

I've seen people pay 3-year upfront payments on some of these.

Proactive SaaS spend management can have a positive cash flow impact

Chris:

This is the thing about the decentralization of decision-making. You got marketing people that are saying, ‘We need this technology and it's awesome.’ They're not even thinking that nobody's looking at the contract at all.

They're just thinking -  ‘Hey I know finance likes me to save money, and if I sign this three-year deal, we get 20% off.’ Well, the list price was already up 20%. So you're paying full price and you just locked the company in for a 3-year agreement.’ I think that is another aspect of the compliance, governance, and basic business inspection that finance will bring to that conversation.

A lot of times we don't know those until they've already passed. Until we look at our AP and say, ‘Man, we paid $250,000. I didn't put this in my cash forecast. What is this for? Oh, it's an auto-renewal for a one-year license that we paid for.’

Being proactive in those conversations can help make not only an expense impact but also a cash flow impact.

Siddharth:

You'd be surprised by how many contracts I've seen that this happens with. When you buy from these distributors and resellers, they factor those contracts as well on the back end.

Although SaaS tools are being consolidated, spend is still increasing

Siddharth:

So there's another question from Roy, - ‘Are we seeing less SaaS spend with the economic downturn?’ 

It's not true. What we're seeing is consolidation. As Chris said, those point solutions are getting consolidated into broader solutions. Spending more with the same vendor to get the same features. 

The number of tools might drop a little bit but the quantum of spend is not reducing by any way or form.

Even if you reduce your headcount, there's a lag between reducing headcount and your SaaS by a year because you've already signed up for those contracts. It's not just licenses, it's usage. A lot of businesses are still growing and if your business is growing, a lot of the usage-based contracts are still growing with you.

The funny part is the other reason why SaaS is increasing. This year, Slack, LinkedIn, and Salesforce increased prices. There are price increases across the board. So I don't think it's dropping, it's just going to keep increasing. But the number of tools might get a little bit more optimized, in my opinion. 

Chris:

I would second that. I don't think in the next 3-5 years we'll see any reduction in SaaS spend. If you look across a lot of different industries like the MarTech industry and the FP&A industry, you’ll start seeing a lot more consolidation. There's also a lot more value that software companies are bringing to organizations.

“Whether it's process automation, collaboration, or driving clarity, the prevalence of prescriptive and predictive analytics are giving a lot more value to companies now.”

The number of licenses is going to go, so we'll have a reduction in the quantity, but we'll see a trending increase in the spend cost element of it.

Big suppliers seem to be losing out

Siddharth: 

I think Roy had a follow-up question -  ‘Are people leaving smaller startups to spend with big suppliers?’ 

Funny enough, we work with a lot of mid-market organizations. Mid-market organizations don't even touch the large suppliers. Obviously, NetSuite and Salesforce are always there. But apart from that, people are willing to use these newer startup solutions. 

It's the larger suppliers that we're seeing lose out. Startups are winning out in this day and age. They're a little bit more flexible with pricing as well. I think that helps in decision-making. If the end stakeholder is already adopted, it is very hard to take it out of their hands.

Chris:

I've been in small, medium, to enterprise-level companies. You can't go to these big software companies and say, ‘Hey, give us $5 off our license.’ They're going to look at you and say -  ‘Pay the dollar amount or go somewhere else.’ You've got a lot more flexibility when you're working with a startup.

The thing I love about that is I've always looked at SaaS spend as partners that I bring on. I don't want to look at them as another vendor. 

One other thing as a greenfield opportunity is to look at any software and ask questions during the sales cycle about their product roadmap.

What is your product role and how do you take feedback from customers and implement that in the product solution? The last thing you want to do is have software and then your business outgrows it. Then you have to move to another software solution.

Let's be honest. Software adoption and implementation suck. It's not the most fun thing in the world. Nobody wants to be doing that every year. So you want to think about how software is developing and growing and what the roadmap is. How they're incorporating that customer feedback and what the feedback volume is. 

You want to settle on software that's going to grow and scale with your business. That would be the 3 criteria that I would think about as you consider big versus small suppliers.

Get through to your team members with a sales approach

Siddharth:

The other question that a lot of CFOs see is that the hardest stakeholder to work with within most organizations is engineering, right? Because we have no idea what engineering is spending money on. You can't question them as well. 

So how do you communicate, not just to engineering but your department heads on a quarterly or monthly basis? ‘Hey, this affects our Cost of Goods Sold (COGS), but this doesn't affect our COGS. This is what you're drawing down on from the SaaS budget, and how do you optimize that?’

How do you do that on an effective basis? Do you just set up one-on-ones? What are some hacks that you've figured out? 

Chris:

Engineering is one of those key elements in any SaaS business. That's probably going to be your most COGS. 

The first thing I always did when I sat down with my engineering team was I wanted to understand their challenges. The worst thing that you can do as a finance professional is come in and say, ‘Hey, COGS is up 50% so we need to reduce this.’ You say that to an engineer and they're going to say - ‘I don't know what you're talking about. I'm going to go back and code.’ 

Instead, I'm going to look at it and say, ‘Look, for the level of SaaS spend and solutions that you're doing, what problems are we solving, and what pain are we solving for customers? What are some other things that we could be thinking about? What are some opportunities?’

Less about the exact spend and understanding what is the value that they're creating outside of that. What is the value to the end customer? That would be the first piece. 

The second thing that I would recommend in talking with an engineering group is looking at those key vendors. There are a lot of agile methodologies that you can incorporate into your spend. Maybe this tool is good, but maybe there's another one where you can do Minimal Viable Product (MVP) projects and figure out which one is the most effective. Engineers love MVP projects, so if you start speaking their language, you start helping them connect the dots of getting this amount of value and this amount of bug fixes.

Trying to draw it to a quantifiable metric that they can understand. Maybe that's bugs. Maybe that's the project timeline. Maybe that's the sprint cycle. It helps to get them better aligned. Or maybe they have a communication gap that if there was a tool to help them better collaborate, they can be more effective.

“It's all about connecting them to what matters to them. It's sales based. What is in it for me? You've got to use that in every level of the organization.”

That would be my one takeaway from any business partner that you talk to. You've got to communicate that and speak their language.

Teams will take ownership once you connect with them personally

Siddharth:

Most people just don't know what their quantum of spend looks like on SaaS or cloud spends. One of the hardest things that we see is how do you encourage your stakeholders to take ownership of it as well.

It's not something that you can worry about as a finance leader because you have a list of items that you're thinking about and not this. So how do you encourage those stakeholders to say, ‘Hey, this is what you're spending, this is how it affects the business.’

Chris:

A lot of that conversation just starts proactively. The first piece of getting to that point is not making the fundamental fallacy and building a relationship inside the business.

There are 2 core competencies that finance takes in terms of building a relationship. There's trust and there's competency. Typically finance goes to our models and says that our SaaS spend is here. Our forecast is here. We've got this gap.

How are we gonna redo it? We want to be the smart spreadsheet people, right? Don't do that. Go establish trust in the business. 

“When you establish trust in the business and come to that conversation, they don’t feel like finance is knocking them across the side of their head to reduce SaaS spend.”

It’s like I'm partnering with finance and they're helping me understand how we can be better together. How can we look at this and say, ‘We're spending at this level, is there another technology out there that we could be leveraging that is the first fundamental building block?’ 

Establish trust first. Don't lead with competency. 

In terms of frequency, when I sat down, I would always have monthly meetings with all of my stakeholders. It was never to talk about the numbers. The numbers were part of the conversation, but it was about opportunities you see in the business.

One of the best questions CFOs can ask the business partners that they serve is, ‘what can I be doing to help support you?’ That is a monumental question. ‘Is there any way you could partner inside and then start prioritizing and have projects?’

Not only that, you create this list of process initiatives that your team can go out and partner with inside the business. I did this a lot of times with an OKR-based approach. 

Every quarter I made them go work on 2 projects outside that either reduced costs, increased efficiency, drove better revenue, or made a better customer experience. Those were the four criteria. Go find those projects inside the business. So I think those are some frameworks and tools that are very helpful in building that collaboration. 

People are the most valuable resource in an organization

Siddharth:

That makes sense. Chris do you have any questions that I can help answer?

Chris:

I love this question because looking at greenfield opportunities for CFOs. This is my challenge a lot of times. We all see it on LinkedIn, it hurts my heart to see a 15% reduction in the workforce or a 10% reduction in the workforce, right? But this is an opportunity and contract negotiations, SaaS, there's a whole list of things that you should be looking at as a modern CFO. People should be the last place. It shouldn't be the first place that you start.

“I always found it so interesting that the most valuable resource in every organization is our people, but it's also the first place that we go to cut everything.”

It just intuitively doesn't make sense to me. That would be my key takeaway. Look at your SaaS spend and get great partners like Spendflo that help you wrangle it.

Get the full perspective of your SaaS spend and get the opportunity to outsource the procurement process and build that collaboration inside the business. That would be just like my overall feedback for everybody as they think about optimizing their SaaS spend.

Siddharth:

That's awesome. Thanks, Chris, I think we're almost done and just on time as well. Thank you so much for taking the time. That was an awesome conversation. I think Chris people can hit you up on LinkedIn, and Twitter, they can find you everywhere. 

Chris:

If you want to find me I'm all over LinkedIn. Check me out on my website, www.freshfpa.com. All of my socials are Fresh FPA on Facebook, Twitter, LinkedIn, and YouTube. I'm not on TikTok yet. I haven't crossed over to TikTok, but I will eventually get there. So, I'm looking forward to connecting. Let me know how I can help and support you transform and scale your finance organization. Thank you so much for the time, man. This is a great conversation, brother. 

Siddharth:

Thank you. Let us know if you guys need any help with your assessments. We're here to help you.

Chris:

Highly recommend checking out Spendflo. Those guys are great. They'll save you some money and every CFO wants to save some money. Check them out, connect with them, and make sure you tap in with them.

Siddharth Sridharan
Co-founder & CEO, Spendflo
Karthikeyan Manivannan
Design

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