Unpacking a Decade-Long Evolution of the Finance Function
The ‘guardians of enterprise value creation’, finance teams have experienced a massive transformation in the last ten years. One that has sparked debates about innovation and adaptation.
In this webinar, we get to the bottom of this undeniably impressive evolution to understand why businesses are relying heavily on the finance function to help them ride out unprecedented challenges.
We’re throwing it back to a time when spreadsheets and Salesforce reigned supreme and the finance team was acting more as custodians than advisors. With many finance teams still pushing through with spreadsheets and a pipework of frustrating bottlenecks; we reveal critical insights to set you on the path to success.
The short answer? It’s all about flexibility…
Find out how you can
- Go beyond the traditional ‘preservation’ role of Finance
- Move away from process-heavy, siloed approaches
- Break free from webs of spreadsheets before they snap, toward a future-proof tech stack
- Manage revenue recognition as contracts get more complex
Finance in 2030: Toward the end of the webinar (channelling our inner Tony Stark), — we discuss the finance operating model ten years down the line.
Speaker
Madhu Jagannathan, CFO at LOB
- Two decades of experience in the world of finance and startups
- Formerly worked with EY, Wipro, Microsoft, and Dropbox
Hosted by
Apurv Bansal, Cofounder and CEO of Zenskar
Webinar Summary
1. How has the role of finance professionals evolved in the last decade, particularly in Software-as-a-Service (SaaS) companies?
Over the last decade, the role of finance professionals in SaaS businesses has evolved significantly. When I first joined Dropbox in 2014, the SaaS pricing model was relatively new, and the infrastructure around it was not as developed. We used spreadsheets and cobbled together data from different sources. Now, the finance function has transformed with the advent of sophisticated third-party tools that enable automated billing system, forecasting, and revenue recognition. The major shift has been from manual processes to automation, reducing the reliance on spreadsheets and improving accuracy. Finance professionals today need to embrace these tools to stay ahead in a rapidly evolving market.
2. What were the main challenges you faced with tooling in the early days, and how has that evolved?
In the early days, we relied heavily on spreadsheets, which often led to errors and inefficiencies. Salesforce was our primary Customer Relationship Management (CRM) system, but integrating Salesforce with other tools was a challenge, and data silos were a common issue. Over time, the tools we use have improved, and now we have a more integrated stack that reduces the need for manual data entry. This shift has enabled better visibility into the business, with tools that seamlessly sync across systems. The lesson here is that as your company scales, you need to be proactive about evolving your tech stack to avoid bottlenecks.
3. How has the expectation of finance teams changed in terms of data-driven decision-making?
In the past, decisions were often based on intuition. Now, there is an increasing demand for finance teams to use historical data and AI metrics to make informed decisions. Sales efficiency, for instance, is analyzed down to the segment level to assess performance across small and medium-sized businesses (SMBs), mid-market, and enterprise accounts. The need to slice and dice data on the fly, which was impossible with spreadsheets, has pushed the adoption of advanced analytics tools. Finance teams must adapt to this shift by implementing agile tools that allow for quick analysis and reporting.
4. How has the tooling and technology stack in finance evolved at your company?
The tools I used a decade ago were limited to spreadsheets and basic financial software. Today, we rely on a combination of Salesforce for Customer Relationship Management (CRM), NetSuite for Enterprise Resource Planning (ERP), and advanced billing and reporting tools. These systems now integrate with each other, reducing silos and increasing efficiency. The key change has been in shifting from relying on manual inputs to using automated systems that provide real-time insights. Finance professionals today need to be well-versed in these tools to make data-driven decisions faster and more accurately.
5. What’s your view on the role of spreadsheets in modern finance functions?
Spreadsheets are useful in the early stages of a company when you’re testing out business models and understanding customer behavior. However, as the business grows, spreadsheets become a bottleneck. They don’t scale well, and there are limitations in terms of collaboration and error-checking. I believe that for scaling businesses, spreadsheets should be phased out in favor of automated systems that are more reliable and flexible.
6. Can you share how flexible tools have improved your ability to handle complex pricing models?
Flexibility in tools is crucial as business models evolve. In the past, we were tied to static pricing structures, but now we can create bundles, switch from subscription to usage-based models, and introduce new Stock Keeping Units (SKUs) with ease. The flexibility of modern tools allows us to adapt pricing models without major disruptions. We don’t have to go back to the drawing board every time our pricing strategy changes, and that speed enables us to stay competitive.
7. With the rise of Artificial Intelligence (AI), how do you see the future of finance in the next decade?
I am very optimistic about the role of AI in transforming finance. In the next decade, I foresee a shift where finance teams will interact with systems using natural language, allowing us to input instructions in plain English instead of navigating through complex interfaces. This will make financial operations more intuitive and faster, allowing finance professionals to focus on strategic analysis rather than manual tasks. The future of finance will be about leveraging AI to make better, quicker decisions with far less human intervention.
8. How important is the integration of different tools across the finance stack?
Integration is absolutely critical. A fragmented system where data doesn’t flow seamlessly between tools creates inefficiencies and increases the potential for errors. For example, if Salesforce data isn’t integrated with our ERP system, we end up with discrepancies in our financial models. A well-integrated stack, where CRM, billing, and accounting systems work together, is key to smooth operations and accurate reporting.
9. What do you think about the future-proofing of finance systems?
It’s essential to think about future-proofing when selecting finance systems. As business models and pricing evolve, the tools you choose must be flexible enough to adapt to new requirements without significant reengineering. Whether you’re considering in-house solutions or third-party tools, make sure they are scalable, adaptable, and can integrate with other systems easily. Future-proofing involves thinking ahead and selecting tools that will not only meet your current needs but will also support growth and changes down the road.
10. What advice would you give to finance leaders when evaluating tools for revenue recognition?
When evaluating tools for revenue recognition, ensure that they are not rigid but flexible enough to handle complex pricing and revenue models. The tool should automatically accommodate changes in sales tax and revenue rules, especially as they evolve. It should also allow for easy adjustments without requiring external consultants for every tweak. This flexibility will help avoid delays during audits and ensure compliance in a growing and dynamic business environment.
11. How do you balance the need for flexible tools with the complexity of using them?
While flexibility is important, tools need to strike a balance between adaptability and usability. You don’t want a system that is so complex that it requires constant external support. The goal is to find tools that allow your team to manage and update them internally without relying on consultants. This ensures efficiency and scalability while still providing the customization you need as your business evolves.
12. In light of your vast experience, what are the key considerations for a finance leader today?
The key considerations for a finance leader today revolve around building scalable, adaptable systems and being proactive about evolving with market changes. It’s essential to be data-driven and embrace automation to improve decision-making. Flexibility in tools and systems is crucial, especially in fast-growing businesses where business models and pricing structures are constantly changing. Lastly, always think long-term about the systems you put in place—choosing the right tools early will save you significant time and money down the road.
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