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In today’s technology world, the job of a Chief Financial Officer extends well beyond accounting and reporting. Faced with hyper-competitive markets, technology companies increasingly demand real-time data, and that information exists in systems which are typically managed by both the Chief Technology Officer and the CFO. And while today’s CTOs are still responsible for system adoption, maintenance, and integration, it’s now become a primary responsibility of the CFO to provide actionable “business intelligence,” sifting through massive amounts of data and distilling this down into executive reporting that can be instrumental for decision making by cross-functional leaders across the enterprise. As masters of business intelligence, technology CFOs can deepen their already strong, strategic relationships with both their CEOs and Boards.

Today, the common denominator among most technology company game plans is the need for growth. CFOs play a critical role in managing growth. We must establish it. Improve it. Restore it. Whatever the situation calls for. We must secure funding, manage risk, provide reporting, and ensure accountability in executing around growth initiatives. But as importantly, as masters of business intelligence, a strong CFO knows how to use data insights to help business units achieve efficiencies in the sales cycle and in operations which, combined, drives operating leverage. The higher the degree of operating leverage, the greater the profit earned from each incremental dollar of spending. And companies that achieve a high degree of operating leverage can race to market leadership.

Technology CFOs must also harness business intelligence and knowledge of operating leverage into a platform that can be used for important strategic insights. CFOs in technology companies must be able to support the vision crafted by a company’s CEO with a strategic framework shaped by both an understanding of the market and competitive landscape backed by a mastery of KPI metrics, industry benchmarks, and the company’s financial and operational data. To be truly successful, strong technology CFOs understand the nuances of industry sub-segments and market dynamics, their company’s competitive positioning within their segment, and their company’s true points of leverage.

Armed with this knowledge, a strategic CFO can independently evaluate the company’s ability to execute on the CEO’s vision, define the resource and organizational investments that are required, remove necessary barriers to success, and identify a road map and critical milestones that must be hit along the way. Then, to ensure buy-in and accountability internally, a strong technology CFO will use their leadership and knowledge to collaborate with cross-functional team members within the organization to gain alignment around this set of priorities while continuing to fine tune the efficiency of internal operations.

Broadening the CFO role within an organization to embrace business intelligence and richer strategic insights is what we’re all about at FLG Partners. We’re looking forward to continuing to lead the charge when it comes to innovation in the Chief Financial Officer role in technology companies.

 

Eric Mersch

Eric Mersch has nearly 20 years of executive finance experience including twice serving in public company Chief Financial Officer roles. Eric is an equity partner at FLG Partners where he works as an Interim CFO to venture-backed SaaS companies, specializing in Strategic Planning, Equity & Debt Fundraising, Financial Planning &…Read More