CFOs are transforming their companies into service providers in an effort to keep revenues boosted, according to new analysis from FinancialForce.
The cloud-based ERP provider, which offers its services on Salesforce, said Wednesday (Feb. 15) that more than a third of the CFOs surveyed said that providing subscription-based services has become more important to their companies’ health over the last five years. More than a quarter said they expect to provide these services as a way to promote their firms’ growth plans in the coming two years.
Researchers found that 71 percent of CFOs say most of their companies’ revenue comes from services that they offer. Nearly a third said that the entirety of their revenues are services-related. And more than half reported that their services offerings generate higher revenues today than they did five years ago.
“Cloud computing and the prevalence of mobile and connected devices have accelerated the shift towards the services economy, effectively giving every company the opportunity to sell/upsell its customers on subscription-based offerings — creating valuable recurring revenue streams,” said FinancialForce CFO John Bonney in a statement.
“This transition is changing the underlying architecture of business, as well as changing the role of the CFO, bringing the office of finance into the conversation on customer experience and satisfaction as contract and subscription renewals become more important to overall business performance,” he continued.
But these professionals are also facing the stress of helping to transform their companies’ business models. According to FinancialForce, two-thirds say they feel “substantial pressure” to help change the mindset of their financial teams in an effort to be more customer-focused and to focus on service renewal as a revenue stream. Nearly half agreed that, in order to generate more revenue from the services they offer, their companies must change their strategic planning process. More than 40 percent said their companies should make changes to staffing and operations.