Beyond the Numbers: How CFOs Can Embrace New Business Models

The story of The Tortoise and The Hare is a work of fiction. Especially when it comes to technology.

If you fall too far behind — and competitors begin lapping you in your efforts to modernize and transform — there is no catching up. You’ll be left in the dust.

Many CFOs today know they’re in a race to the future, and they’re working tirelessly to take decisive (yet wise) action about what comes next. Across myriad industries, this starts with one thing: the embrace of new business models. Recent IDC research found that new business models are currently the most impactful change driver for CFOs, and one in two companies plan to evolve their business model by the middle of 2022. There are a couple key reasons for this emphasis.

One is survival. More and more companies are not only seeing existing business models challenged by innovative competitors and outside-the-box disruptors but also seeing the market itself transform into something entirely different (more on that in a moment). The other reason is growth. Companies are changing because they want to expand, whether in the same market or into newer, more fruitful ones.

In this moment, CFOs must take on a leadership role. Because a new business model without a new approach to finance is like a planning a road trip without a vehicle. Your financial platform is the engine that makes things go.

So, how can today’s leaders ensure they’re well-positioned not only for tomorrow’s race to financial transformation but its sprint to financial innovation? It starts with our service-focused present and the modern reality of cloud economics.

Navigating the Economics of the Cloud

Earlier, I mentioned the complete market transformation many companies are experiencing. To no one’s surprise, this shift has come because of the COVID-19 pandemic, where emerging customer behaviors jumped into hyperdrive, causing things like online shopping, consumer expectations and the desire for services to all increase dramatically.

New service models like curbside pickup and 15-minute grocery delivery have taken center stage over the last two years because of shifting customer behaviors. Customers want more, faster — catered to their specific needs and at all hours of the day — and CFOs have largely been responsible for developing sustainable business models that support this trend. This is a significant reason why the cloud is having its day. The cloud has become a focal point for CFOs at virtually every organization today because it supports product and service models characterized by surges, subscriptions, and delivery across diverse omnichannels that have become commonplace and would otherwise overwhelm traditional systems.

The cloud provides flexibility to CFOs who see high-volume, low-dollar structures trending upward and calls by consumers for greater (and faster) personalization happening around them. The first step for CFOs is acknowledgement and fluency in these market dynamics; the second step is understanding how it dictates the pace and scale of corporate innovation and creates a need for CFOs to develop a long-term strategic view for innovation.

Keeping Up With the Speed of Innovation

The foundation that this subscription-focused, cloud-based approach provides is also essential to innovation and growth in the future, as it positions companies to effectively drive and scale the business. By offering a single source of truth, harmonizing real-time data, and providing accurate and transparent forecasting and processes, it leaves the company poised to capitalize on next-generation ideas and opportunities.

I’ve seen this borne out with some SAP customers that have modernized their finance and billing approach. On average, they’ve seen:

• 95% faster time to market overall
• 25% fewer customer support calls due to more reactive systems
• Consistent and reliable price optimization for customers

And this is just the beginning. Future-focused platforms can also ensure harmonized customer profiles and improved data collection and analysis — meaning increased cross-selling opportunities, improved ability to analyze business fundamentals (like real-time profitability), and consistent, improved business overall.

So, where to start? Let’s look at a real-world example of what I’m talking about.

Staying Updated, Staying Ahead

Throughout the pandemic, my team has been working with a global customer that is one of the world’s largest entertainment businesses and brands. Their goal was to implement and embrace an innovative, scalable approach to billing and revenue management, a project that was fast-tracked by the widespread shutdowns in early 2020 that affected large parts of the customer’s brick-and-mortar business.

They were quickly able to carve out a path to the future, launching a new global streaming service that brought both new and legacy businesses together enabling better engagement with their consumers.

Ultimately, our platform allowed the customer to scale globally, onboarding millions of subscribers while bringing in millions of net new revenue in a short timeframe. Integrating with upstream platforms with a number of localization requirements drove complexity, however, the customer was able to roll out services as planned across the globe. Looking forward, there are plans to embed cross-sell opportunities within the platform and to truly develop purposeful engine driving the business. This was all done with the project launching on time and on budget, with no outages and with a near-perfect match rate for cash reconciliation (across millions of transactions). And now, with a foundational platform that allows them to scale infinitely, they’re prepared for whatever comes next.

No matter your business and no matter your industry, a finance platform that helps you to move quickly, act with agility and make decisions intelligently is essential to what comes next. The fact is: The path to gaining and sustaining success in today’s global economy — whether you’re a big technology organization, an e-commerce business, or an online gaming outfit — is one of one view and one source of truth.

It’s about business value, not buzzwords. It’s about letting machines do the work so that humans can do the thinking. It’s about turning to technology that excels so that we can make the decisions that matter.

It’s about winning the race to the future.