Adopting the right software at the right price and time in a company's lifecycle is a competitive advantage. And within this turbulent macroeconomic environment, lowering costs while increasing efficiency is everything.
CFOs should renegotiate all software supplier contracts and seek to adopt more software to stay relevant, efficient, and ahead of inflation — and emerge from a possible downturn in a better and healthier position. The focus is no longer on doing more with less, but on adopting software that maximizes productivity, combats inflation, and increases profit.
Finance executives should focus on these goals during software renewal season. To get the best price, companies need a way to surface renewals with plenty of advance notice and all the right details. CFOs have to empower each department to balance their own part of the business, as procurement teams can no longer do it alone. One of the best ways to accomplish this balance is standardization through an integrated system of record.
Today’s economy has certainly made CFOs focus on cost containment. Many will take the easy way out and cut costs. But cutting too deep in the wrong areas can be a big mistake. Forward-looking CFOs will navigate this difficult time by using more agile, data-driven scenario planning models alongside software to equip their companies to weather the storm. Collaborating with reliable technology partners can help.
CFOs managing their software stack should keep the following tips top of mind.
1. Use Software to Drive Efficiency
Evaluate software using a cost vs. benefit framework. If the benefits outweigh the costs to purchase, implement, and maintain the software, then buy or renew. And do the reverse if the costs outweigh the benefits. Use a third-party partner to identify overspending, software duplications, and gaps in the software stack.
Good suppliers that value your business will work with you. However, when you buy from only one supplier every so often, it can feel nearly impossible to know how to scope your needs and what price you should be paying. Software pricing is volatile, especially when you don’t have a third-party partner to help level the playing field. Instead of focusing on the lowest price in the market, focus on buying the right amount of software at a fair price.
3. Protect your Cash Position
Slowing economies affect cash flow and profitability. Be prepared by creating multiple scenarios. Ultra-selective spending allows the CFO to maneuver the company during an unpredictable and turbulent economic environment. Software is an area where an organization can save money and drive efficiency in a predictable way.
Jason Quinn is the CFO/COO of Vendr.