In a recent webinar, I joined Bart Hacking, CFO of BetterCloud, to share best practices around building out a finance and operations technology stack. You can check out the full webinar here – Perfecting Your Finance and Operations Stack – or read Bart’s post What Does Your Finance and Operations Cloud Application Stack Look Like? for details on how BetterCloud built out their operations with the best cloud applications to support their tremendous growth.
Selecting the right systems to build out the right technology infrastructure for your company is a very common topic of conversation amongst finance and operations folks at all different stages of a company’s growth, so I thought it’d be useful to look more closely at the BetterCloud example – not for a look under the hood at their actual systems in place (check out the webinar and blog post for those particulars), but for behind-the-scenes insight as to what drove their decision making process. Every company has different goals, but I think BetterCloud offers a great example of the process: how to build out the right technology stack – step by step – to align with your business goals.
When you begin to think about applications for your business, what you’re really trying to do is plug different systems in to support the trajectory of your business.
Though the “build vs buy” debate still exists, IT teams are opting for more and more cloud solutions The landscape for both front office and back office technology has changed rapidly over the last eight to ten years. As more technologies become available, it’s easy to find best-in-class applications that allow your team to be nimble and that provide a solid foundation, especially for a company that has ambitious growth goals and aims to build a wide reach across a broad user base.
The technology infrastructure you build will provide the foundation for your company, so it needs to be able to support your company now, and through periods of growth into the future. The goal is to put together the right set of applications that will help you achieve your specific business needs.
From BetterCloud’s and our own experience (as well as what our many customers have shared with us), we know that when designed thoughtfully, an effective finance and operations technology stack delivers on two primary goals:
And you can’t have one without the other because they’re both linked to the overall growth of the company: high revenue growth requires efficient teams, and efficient teams support higher revenue goals. Let’s take a closer look at both.
For a company to be successful, it has to grow revenues by winning, serving, and retaining its customers. There are several typical processes that are associated with enabling any revenue stream: quoting, order management, fulfillment, billing (and all the different processes that come with billing), collections, recognizing revenue, and then finally analyzing results and iterating. Businesses are constantly discussing how to better optimize these processes.
Each business and team needs to decide on what capabilities they need to seek out, and prioritize and sequence their investments accordingly. It’s not just about selecting the right solution, but aligning what you’re selecting and how you’re investing in it with the overarching company goals.
To use BetterCloud as an example, they approached this in multiple waves and aligned each wave with the goals of the business.
In the first wave, the main goal that they needed to solve for was achieving rapid business scalability by automating customer facing components of their order-to-cash revenue stream. They needed to support tremendous growth in a short period of time with the least amount of sales/marketing investment. A frictionless user experience was incredibly important, so they initially focused their resources on a self-service model – one that enabled an in-app checkout process that was fully integrated with their platform and their billing system.
After achieving strong success and proving the market with a low touch self service model, Bettercloud decided to target larger businesses, and they invested in a direct sales team. As part of the second wave of building out their finance and operations stack, they invested in a solution that integrated their CRM application with their billing and subscription management system. As a result of this they have achieved 100% electronic quoting process with no additional manual entry required to convert quotes into subscriptions and invoices.
And finally, as part of the final stage of fully automating the different elements of their revenue stream, they integrated their billing and subscription management system with their general ledger. This has allowed them to streamline their accounting close process.
At the same time as you’re building out your stack to enable scalable revenue growth, you also need to ensure that efficient workforce management systems are in place. If you think about typical workforce management processes, there are six common processes that you need to enable: onboarding, benefits management, payroll, equity management, expense management, task and project management.
Again, you need to identify your priorities. To uncover your true pressing priorities, seek out bottlenecks. What’s limiting your growth. When you find yourself thinking “There has to be a better way!” – make this a priority. In the case of BetterCloud, their key priorities were scalability, automation, and an improved employee experience.
BetterCloud was looking to cloud solutions to create paper-less, error-free processes. They also wanted to better align the employee experience with their culture – you can’t take a cloud company, staffed with 20-30 year olds, and expect them to manually enter 40 pages of onboarding forms! And they wanted to create a lean operation that eliminated time sinks.
By prioritizing areas of concern and finding solutions that met their goals of less paper, less errors, and an improved better employee experience, BetterCloud was able to grow 150% from an employee standpoint over a two-year period.
With so many components to revenue growth and employee workforce management, you simply can’t tackle everything all at once. You need to prioritize and sequence, choosing systems that work together and support one another.
Your application needs will evolve as your business evolves. Depending on your stage of growth, you’ll have different needs which will lead to different considerations. Beware of inadvertently painting yourself into a corner in terms of the technology components you select. Look for flexibility. Choose technology and applications that will work for you as your company grows and your goals shift.
Don’t forget to check out the webinar Perfecting Your Finance and Operations Stack or read Bart’s post What Does Your Finance and Operations Cloud Application Stack Look Like? for a deeper dive into BetterCloud’s finance and operations stack.