Takeaways from the NAFES22 Conference
Last week I attended the North American Finance Executive Summit (NAFES22). It was a great event, attracting top-tier financial leaders from across the country who spoke about their direct experiences while also sharing their perspectives on trends that will impact financial management into the future. Of course, the conversations often turned to the economy – and the uncertainty we’re facing heading into 2023. The agenda for the event highlighted the increasing role the finance executive plays in driving strategic and operational decisions for the organization. Where finance was once all about reporting the numbers, it’s now also about optimal product and service pricing, choosing the right technologies to support the business and getting ahead of trends and turbulence in the market. In fact, one CFO said the “F” in his title stood for “future.” A daunting prospect to be sure but one that, based on the conversations that I had with people at the event, finance leaders seem to be getting their arms around. I was especially attuned to thoughts around automation and pricing optimization, as these are two themes that echo what I am hearing in conversations with prospective customers – that they need tools and technologies that can support operational shifts, drive business growth and add pricing flexibility. Consider this:
33% of CFOs polled in a Gartner study put streamlining back-office operations as a top 3 priority in the downturn. Per that study, “CFOs plan to protect their digital investments as they cut costs elsewhere in the business. Among technology priorities, CFOs have particularly prioritized back-office automation as a key to driving down costs in the face of ongoing inflation.” Automate, automate, automate.
33% of CFOs polled in that Gartner study also put pricing optimization as a top 3 priority in the coming downturn. Forward-thinking CFOs are trying to figure out how best to use pricing as a competitive advantage in what no doubt will be a much more competitive market in 2023. I found it interesting that the CFOs at NAFES are dialing into pricing optimization, not price cuts. Perhaps they’ve learned from the mistakes of past downturns. In fact, in August our CMO Geoff Galat wrote about how B2B companies should prepare to weather a potential economic storm, focusing particularly on alternatives to pricing cuts, which tend to be a common short-term fix that ultimately undermines the health of the business. As Deloitte has reported, “The implications of these practices (pricing cuts) are often not well considered by the companies; they tend to tackle the immediate challenges at the expense of longer-term profitability.”
Additionally, it seems consistent that CFOs expressed that they are dealing with a glut of technology, as COVID pushed digital transformation (DX) forward for nearly every business. In the best cases DX was a controlled effort, but often it was a bit haphazard as different departments pulled in individual technologies to optimize performance. Now, alignment across the company is imperative.
COVID unsurprisingly caused a massive increase in SaaS deployments in the enterprise. This has created all sorts of data security and privacy risks that IT and Finance leaders are now having to deal with.
Due to the highly acquisitive period we are coming out of, a lot of larger companies are really focused on back-office ERP integrations. I spoke with CFOs who were dealing with 100+ ERP instances that they needed to integrate.
Data cleanliness is a #1 issue for many CFOs. Virtually every CFO that I spoke with at the conference cited this as one of, if not THE, most important areas of focus for 2023. Many have learned the hard way that bad data can lead to poor decisions that can cost the company significant revenue and market share.
All in all, a really excellent event where a lot of interesting insights were shared. I look forward to returning to this event in 2024 to hear more about how finance leaders navigate this period of contraction and realignment.