Why CFOs Love CRM

CFOs and CSOs are often at loggerheads. The reason is simple. CSOs are all about making money and CFOs are all about saving money. While the two concepts aren’t mutually exclusive, they’re certainly not the same thing, and nothing rankles a CFO more than a CSO who needs to spend freely in order to make the company more money.

When it comes to CRM, however, the CFO is the natural ally of the CSO, and can generally be counted on to help create a purchasing and implementation plan that both saves money and helps generate more revenue. The reason is simple. Unlike most sales expenditures (like sales training), the impact of CRM is eminently measurable, which tends to make CFOs more comfortable with the expenditure. Even better, the kind of attention that CFOs can provide on the all important issue of Return On Investment is likely to make the CRM implementation more effective than if that discipline were lacking.

Here’s an illustration. Few things are more of a headache to the CSO than forecasting. CFOs are also highly concerned with forecasting because the forecast directly impacts the quarterly investments that the company is making. However, since the CSO is “on the hook” to deliver on the forecast, there’s an overwhelming tendency to fudge – a behavior that simply drives the CFO batty.

However, one of the wonderful things about CRM is that, over time, it compiles the kind of historical data that makes it easier to generate an accurate forecast. That’s particularly true if the CRM system has been upgraded to include some sort of analytics capability. Such a system is highly likely to win the confidence of both the CSO (who is more likely to believe that the numbers can be made) and the CFO (who is more likely to believe that the numbers will be made). In other words, both the CSO and the CFO have complementary needs that the CRM system helps to meet.

That’s why, while CFOs sometimes throw cold water on technology projects, they’re generally amenable to CRM. Because they have a wide perspective on the financial state of the business, they see CRM as a way to make those financial goals more predictable and measurable.

A CFO can also help a CRM implementation remain targeted so that it has the maximum positive impact. For example, most CFOs would probably assume that a CRM system is working correctly if (after installing) the size of an average sale in the pilot group grew by 10 percent. However, a CFO would want to know where that 10 percent came from – and would want the CRM system to capture that factor so that the success of the pilot could be replicated elsewhere. Put another way, because CFOs are focused on ROI, they’re more likely to take a realistic approach to what’s going to have a big payoff for the entire corporation.

How, then, do you get your CFO engaged in the CRM process? One way is to create a working group that will participate in the decision making for future CRM purchases. This group should consist of internal experts from any team likely to be impacted by the system. Such a working group typically maps out the basic elements of the organization’s customer-facing processing and creates a list of objectives for the CRM implementation.

The working group presents to (and hopefully works with) the CFO to devise specific measurable ROI goals for the CRM project. Example: “Goal: reduce the time it takes to confirm an order from 10 minutes to 10 seconds, thereby freeing 450 hours of sales time each quarter, resulting in $2 million of additional revenue.” Such a working group provides the CFO with all the data necessary to understand the potential ROI of the CRM system. As a bonus, such a working group can help with the inevitable organizational issues inherent in any technology (like CRM) that tends to have a wide impact throughout the corporation. (The CFO will like that, too.)