How CFOs Can Better Evaluate New Vendors In A Down Economy

Toby Carrington is the Executive Vice President of Global Operations at Seismic, making go-to-market teams more efficient and effective.

The turbulent economy that came to define 2022 is still here, and its conclusion remains uncertain. Regardless, the shift away from growth at any cost has fundamentally changed priorities for the foreseeable future. The main priority for any business has pivoted to truly improving operations rather than simply tightening budgets and hunkering down for a few quarters.

As a result, increased importance has been placed on the role of the CFO, especially when it comes to evaluating investments in new vendors and tech. Enterprises have begun examining opportunities for rigorous organizational alignment—and, thereby, the tools that help them achieve it.

I served as a chief financial officer at the tail end of the 2008 recession, and having led operations teams in recent years, I’m keenly familiar with the responsibilities CFOs must shoulder in an unfriendly economy. Today, we’re beginning to see similar patterns arise.

For example, when salespeople at my current company sold our software in the past, they primarily needed buy-in from the head of marketing and information security. CFOs weren’t involved in the deal until the very end, when contracts needed signing. But today, buying teams have ballooned in size, and (almost) every deal goes through the CFO. The sales process has shifted to involve financial decision makers much earlier because the budget for new tech is much harder to come by. CFOs, therefore, need to be extremely discerning when investing in new tech—SaaS or otherwise.

As you look to set your people up to thrive in an uncertain economy, here are some key factors to consider. (As a disclaimer, my company is a provider of enablement software.)

A Different Type of ROI

The first question you’ll typically ask when evaluating a new tech tool is, “What’s the ROI?” Whenever you shell out money for something that promises to improve an internal process or customer relationships, you’ll want to know exactly when you’re going to make that money back.

But achieving the literal definition of ROI will be a much slower process in today’s climate. You may not see a payout as quickly as you’d like—at least not in the traditional sense.

Good CFOs always think in terms of ROI. But this comes even more into focus in lean times. Rather than asking questions like, “When are we going to make this money back?” consider the following.

• “What will this investment do to help safeguard our business against risk?”

• “What value is this going to drive for the impacted teams?”

• “How will this investment enable said team to operationalize efficiencies and outcomes?”

Now is the time to invest in your people, especially if the expectations from boards or investors include doing more with less or gaining greater productivity. The same should be true when considering new tech investments: You may not reap immediate financial benefits, but you’ll empower your team to improve workflows, the results they drive and perhaps even their overall satisfaction at work.

Anchoring On Outcomes

Over the past year, we’ve seen the world of sales quickly become anchored on outcomes. B2B customers, in particular, need to know that the solutions they’re considering are going to drive tangible results for their business, and sales strategies have shifted accordingly.

CFOs must shift their priorities in tandem. Just as sales teams should demonstrate the outcomes their prospects will be able to achieve with any given product or solution, CFOs need to be sold on the outcomes new tech will provide their teams. What value will this tool provide your GTM engine? What efficiencies will it enable your staff to unlock? CFOs should prioritize investing in tools that promise to help teams operationalize outcomes.

By familiarizing yourself with the pain points across departments and developing a dedication to solving them, you can help your teams achieve the unconventional return on investments detailed above that they so desperately need. Common outcomes range anywhere from employee retention to improved sales cycle time to increased speed to market.

For instance, we’ve seen increased interest in enablement technology during this period of uncertainty due to the outcomes it, well, enables folks to deliver. Seismic recently found that of the respondents who said they use some sort of enablement technology.

• 99% say it makes their job easier.

• 80% say it allows them more time to focus on other important revenue-generating activities.

• 78% say it helps them provide a better client experience.

Enablement is just one example of a solution your business may consider while gearing up for the bumpy road ahead.

What outcomes should I look for?

The outcomes that matter most during rocky economic conditions will vary from business to business and team to team, but there are some common threads CFOs should prioritize across the board.

I’d recommend saving your dollars for tools that achieve the following.

• Operational efficiency: Will this tool free up time spent on tedious administrative tasks so folks can focus on high-value activities? Will it simplify workflows?

• GTM productivity and maturity: Does this tool improve alignment and productivity across the entire go-to-market engine? Does it provide a single source of truth for my sales, marketing, enablement and customer success teams?

• Improved customer relations: Will this tool enable customer-facing teams to nurture their relationships with our customers? Does it provide actionable insights for sales teams to create a more personalized customer experience?

• Savings: Does this tool consolidate the functionalities of other tools we currently invest in? Will it free up the budget otherwise spent on outsourcing or multiple platform subscriptions? What software can be rationalized?

CFOs often have to make unpopular trade-offs. However, there’s an opportunity to invest in tools that provide company efficiency and job satisfaction for employees. Tech that optimizes your internal systems and aligns your teams on the appropriate outcomes is well worth the initial investment, especially as you look to set your people up to thrive in a turbulent economy. Honing in on operationalizing these outcomes will profoundly simplify the evaluation process and make your investments more effective.

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