Today we are excited to announce the results of a new survey of senior finance executives in the U.S and U.K to find out how the services economy is impacting the finance function. The survey, conducted by CFO Research in collaboration with FinancialForce, reveals the impact that the economy’s shift to a subscriptions and services focus has on CFOs, including new accounting changes and the importance of shifting their role to be more strategic than ever before.
The report found that CFOs who recognize the significance of the change in business focus can in fact drive more revenue from services, such as professional services, subscription-based services, software/apps delivered as a service, managed services and usage-based contracts.
It’s a whole new world. Let’s take a closer look at some of the top findings:
- Make no mistake, the services and subscription based economy is here. 71% of CFOs surveyed reported that more than half of their revenue comes from services, and almost a third stated that all their companies’ revenues are service-related. In addition, more than half (55%) said that services generate a higher percentage of revenues today than they did five years ago, showing the recent shift to these models.
- Services = growth. More than a third of the respondents said that subscription-based services have become significantly more important for their companies over the past five years. Roughly the same number see those types of services as an important part of the company’s growth plan over the next two years.
- Customers are key, even in the finance function. Two-thirds of those surveyed agree that they feel “substantial pressure” to change their finance team’s mindset to be more customer-centric and focused on renewal revenue streams.
- Are you equipped to handle this fast paced world of change? CFOs must evaluate the operational and technological infrastructure to understand if it is able to cope with an increase in service-related revenues. The study shows that only 17% had confidence in this area, demonstrating there is much room for improvement.
One thing is clear: CFOs must change their mindset to one which is focused on subscription-based offerings in order to create valuable recurring revenue streams, which can accelerate business profitability and promote stability much more effectively than one-off transactional customer relationships.
It may be a challenge, but CFOs who get it right can enjoy taking a more strategic seat at the business table, connect with customers on a deeper level, and elevate their status as a driver of business success.
You can access the full report here to find out more about:
- CFOs see services as the future of business growth
- A more customer-centric finance function is emerging
- CFOs must reach beyond their core capabilities
- For many CFOs, the shift to services changes everything
- Investing in the right tools to access and aggregate data will be essential