Welcome to the latest edition of the Finance and Accounting Technology Briefing, a biweekly newsletter from StrategicCFO360 and The CFO Leadership Council.
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Editor's Note—With the inaugural Finance and Accounting Technology Expo in the books, we're already preparing for 2025's expo, scheduled for October 28-29 at the Javits Center in New York. Registration is open and available at a limited-time, discounted price!
Meanwhile, the Finance and Accounting Technology Briefing will continue to cover stories that help finance pros make confident technology choices and give software providers a better understanding of their customers' needs. Visit our newsletter page to read previous issues.
We could use your help, too: If you have feedback, ideas or product, people and company news to share with the community, email us at vince@CFOLC.com — Vince Ryan, editor
Stop Runaway SaaS And Cloud Spending
"There's very limited transparency in vendor prices. That's why we exist—to bring transparency and level the playing field between customers and folks like Salesforce, who have perfected their go-to-market [strategies]," said Jared Greenberg, VP of North America sales for Vertice (photo above), a cloud and SaaS spending optimization provider.
According to Gartner, SaaS and cloud contracts are the fastest-growing areas of IT expense, and inflation has driven up the costs of new deals and renewals. On average, the price per employee of the deals Vertice has tracked in 2024 rose 26 percent, Greenberg told me on the sidelines of the Finance and Accounting Technology Expo. At a time when all companies are trying to limit increases in operating expenses to boost profitability, that stings.
Vertice’s software ferrets out SaaS and cloud expenditures a CFO doesn't know the organization has and can match dollar spending with utilization metrics. It also has a services arm that actively negotiates for clients.
I asked Greenberg how finance people can regain some leverage when evaluating potential SaaS providers and negotiating for the best prices if they sign a contract.
How does your data on SaaS and cloud deals help the customer negotiate with a solution provider?
Say you're negotiating with DocuSign, you might be paying them $1 per envelope. We might have negotiated with them for a similar volume yesterday at eight cents [per envelope]. But then, we take it a step further. We have hundreds of clients globally. As you can imagine, we're speaking to these vendors daily.
We have insights into how to engage with them—how many different escalation points these companies have on their deal desks, for example. Salesforce has six different levels of approval you need to go through to get the best possible deal. How do they structure pricing? Where are they willing to give concessions, and where have they in the past? The customer needs to prepare ahead of time for those negotiations. Many people are very reactive and wait for Salesforce to contact them. We suggest kicking off the renewals [negotiation] six or nine months in advance.
If a company can't just walk away from an existing vendor relationship at renewal time because of the price hike, it can do nothing.
That's why we think looking at term limits is one of the biggest levers you can pull for an ERP or something like Salesforce that you know you're not ripping out and replacing. It makes sense if you can get an extra 5 percent or 7 percent off per year by committing to a longer contract length. I'm always slightly surprised by how many CFOs are still going month to month with vendor contracts when they can take advantage of that.
Should CFOs be involved in the negotiation of SaaS software contracts?
You'd be surprised how many are in some larger, more strategic ones. They try to rely on their network to understand what they should be paying. The problem is, it's tough to find a like-for-like company purchasing the same mix of products. Venture capital firms try to help their portfolio companies. Private equity firms try as well. But without a robust data set, doing this is very hard.
What other mistakes do organizations make when purchasing new software contracts?
I think it all starts with visibility. The first thing finance needs is to understand where duplication [of products] exists. One of the most common areas where I see this problem is with project management tools. I'll go into a company, and they have four different tools because engineering wants one thing and some other department wants another. If you truly understand how a project management tool is used, you can find one that'll meet the entire company's needs.
Our software can discover all the SaaS products in use across the organization in a few different ways. For example, we integrate with a company's ERP system. As you can imagine, all the expense line items are in there. We can pull single sign-on data, which also helps with platform discovery.
Presumably, inflation in the U.S. is still on the way down. Does that mean the price increases from vendors will be smaller going forward?
I think that the cost of acquiring a customer has gone up drastically. So many of these software companies are focused on squeezing every penny they can out of customers. That is what we're seeing. In some SaaS relationships, the customer is paying the same amount but actually getting less for what they're paying, or in other cases, simply paying more for the same thing.
With all the data on deals you have, do you provide any services to the vendors?
We do not, and that's part of the value-add. Our incentives are aligned with our clients; we are not getting any kickback from the vendors.
—Vince Ryan, editor, The CFO Leadership Council. vince@CFOLC.com
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Brett Abbey is CFO of RT2, a SaaS company that provides a retail management platform and other solutions for the wireless industry. Brett provided an overview of the company's major systems and why he wants better communication between software companies.
My tech stack currently includes an on-premises version of Microsoft Dynamics GP, Concur, Microsoft Power Platform and 365 and BlackLine. We are exploring rebuilding the entire stack around a cloud-based ERP for better integrations with our banking partners and other key stakeholders. We also have a very elaborate and sophisticated treasury system that relies on up-to-date bank balances. We can utilize our banking partners' systems and APIs to bring that information even more current and streamlined, along with the subsequent bank reconciliations.
What's your joy, and what's your headache?
The joy related to purchasing and deployment is that we know what we want the end product to do, and when we stay true to that, the initiatives stay on track. I believe that the more you invest at the beginning of a project, especially with an ERP, the easier it is to keep to a schedule and budget while ultimately achieving what you set out to achieve. The headaches come from changing scope, deciding mid-implementation to add new entities or a new module, not meeting expectations and the non-stop sales calls and follow-ups.
If you could wave a magic wand, what would you make software companies do for you?
With a magic wand, I would make software companies talk and communicate with each other better, so I can implement whatever solutions I would like without having one system exclude a potential solution due to lack of integration.
What's your best piece of tech advice for others in your job?
My best advice is to know and understand what you are trying to do and deliver on before you start implementing anything. Understand how it should work and impact other workflows or parts of the organization. If or when possible, try not to customize the solution to fit your current company; instead, adjust your processes to get to standard. It saves a lot of time, money and headaches.
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Have news to share? Drop me a line at vince@CFOLC.com — Vince Ryan, editor
Paychex introduced Paychex Funding Solutions to provide up-front capital to small and mid-sized businesses through invoice factoring. Provided in conjunction with Paychex's Advance Partners and Alterna Capital Solutions, the service is available to business-to-business organizations whether or not they are a Paychex payroll client.
Microsoft announced ten new autonomous agents that will be available for its Dynamics 365 back-office suite beginning later this year. The agents do everything from qualifying sales prospects to confirming supplier deliveries to matching and clearing transactions between sub-ledgers and the GL.
Travel and expense management company Navan announced the launch of the Navan Accountant Console, a dashboard that lets accounting firms automate expense reconciliation across their clients' various banking and corporate card programs.
At the OneStream developer conference, the finance management platform provider previewed Sensible AI Library, a set of pre-built AI models for developers to create, test and deploy AI routines. Use cases include detecting and resolving data quality issues, spotting fraud, analyzing spending patterns and segmenting financial data for optimal resource allocation.
Sage announced the acquisition of ForceManager, a provider of an AI-enhanced, cloud-native mobile management tool that supports SMB sales processes. ForceManager lets Sage customers track portfolios, budgets, opportunities, contacts, calendar tasks and video calls.
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Have news to share? Drop me a line at vince@CFOLC.com — Vince Ryan, editor
DocuPhase hired Mahesh Kedia to be its VP of payments. Mahesh most recently led the go-to-market strategy at card-issuing platform Marqueta and previously held leadership roles at PayPal and American Express.
PROS Holdings appointed Colleen Langevin as chief marketing officer. Langevin is the former CMO of Quest Software and has held executive leadership positions at Vista Equity Partners, Dell, CLEAResult and Iron Mountain.
Justin Greenberger joined AuditBoard as chief customer officer. Greenberger oversaw customer success teams at UiPath and is a former a chief information officer at GE Digital and audit manager at GE.
BlackLine announced that after nearly 10 years as the accounting software company's CFO, Mark Partin will be retiring as of March 1, 2025. He will be succeeded by Patrick Villanova, BlackLine's chief accounting officer.
OpenAI hired Dr. Ronnie Chatterji, a professor of business and public policy at Duke University, as its first chief economist. The company said Chatterji will lead research into "how AI will influence economic growth and job creation, including the global economic impacts of building AI infrastructure [and] insights on longer-term labor market trends."
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Stock performance is as of the market close on November 13, 2024
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Plan to join us at the Finance and Accounting Technology Expo, the country’s largest annual trade show for buyers and vendors of corporate finance and accounting software. Next year’s event will occur at New York’s Javits Convention Center on October 29-30, 2025. This is an excellent opportunity to network with industry peers, learn from experts and discover new products and services. Register online at StrategicCFO360.com/FATE/register/
Finance & Accounting Technology Expo
Oct 28-29, 2025 | Javits Convention Center | NYC
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