When it comes to boards putting pressure on CFOs, it normally has to do with three things: pricing, margin, and/or forecasting.
Questions around these three areas usually include:
- Pricing: Is it going up or down? How do you plan to control the price of a product?
- Margin: What areas can we tweak to add money to our bottom line? As we scale, how can we show improvement (backend processing errors, backlog, lead time)?
- Forecasting: What will the future of the business look like?
It’s important to have a handle on these areas of inquiry, because although CFOs report to CEOs, they usually have strong relationships to the board. Many times, board members will reach out directly to the CFO to ask for information regarding metrics, guidance, forecasting in a specific sector, and more. The CFO might also be called upon to translate metrics provided by the CRO and/or back up the CRO’s position with supporting data.
So what can CFOs do to ensure they’re prepared when the board begins pressing them for this type of information?
How a CPQ Solution Can Help
In a previous post, we covered how CPQ helps CFOs optimize deals for price and margin without slowing down sales cycles.
At its most basic, what CFOs need are data and metrics. After all, whenever the C-Suite starts spinning out, it’s usually because they don’t have the data to quantify a decision.
Thankfully, a CPQ solution can help with both accumulating the necessary data and formatting it properly.
When it comes to forecasting, for example, while Salesforce is great at letting you know what the sales team thinks, CPQ shows what you’re actually quoting and how it compares year over year. At the end of the day, CFOs want forecasting to be a science, not an art. How can forecasting become more of a science? With more data points—and CPQ can help provide those data points.
CPQ can also help you obtain more overall insights into your business. For example, CPQ can tell you how many quotes are being sent out. After all, if you don’t have this information, you don’t know what—or how much—business you’re doing.
A CPQ solution can also trace the start and end points in every deal, meaning your team doesn’t have to manually track numbers—which is especially helpful considering manual processes aren’t scalable and usually break.
The data that your CPQ solution aggregates can also be exported in order to be analyzed. And even if you don’t know what to do with all those numbers just yet, your CPQ tool will continue to capture all of that information, tracking years’ worth of data in the system that can later be used and analyzed.
The Bottom Line
Ultimately, a CPQ solution can allow CFOs to:
- Know as much as possible when they go to the board, and
- Ensure they’re not giving the board bad information.
CFOs will be equipped with the necessary insights into backlog, lead time, processing times, quote volume, and more in order to give the board exactly what they’re asking for in an accurate and comprehensible manner.