CFOs are retooling their businesses to drive more revenue from services and capitalise on the shift to a subscription-based economy, a study by FinancialForce reveals.
More than a third of the 163 CFO respondents said that subscription-based services have become significantly more important for their companies over the past five years. Currently, 71% of CFOs report that more than half of their revenue comes from services, and almost a third report that all their companies’ revenues are service-related. More than half (55%) say that services generate a higher percentage of revenues today than they did five years ago. Two-thirds agree that they feel “substantial pressure” to change their finance team’s mindset to be more customer-centric and focused on renewal revenue streams.
“Cloud computing and the prevalence of mobile and connected devices have accelerated the shift towards the services economy, effectively giving every company the opportunity to sell/upsell its customers on subscription-based offerings, creating valuable recurring revenue streams,” said FinancialForce CFO John Bonney.
He added: “This transition is changing the underlying architecture of business, as well as changing the role of the CFO, bringing the office of finance into conversations on customer experience and satisfaction as contract and subscription renewals become more important to overall business performance.”