CFOs are no longer just financial gatekeepers. They’ve evolved into strategic advisors that drive impact and alignment across the organization. Today, three-time CFO Russell Lester is living and breathing this elevated role. In this episode, Russell shares his secrets to leveling-up as a CFO, what it takes to build a successful partnership with IT, and how he’s driving business results with SaaS management.
It wasn’t long ago that CFOs were strictly the gatekeepers to your company’s finances – they weren’t always viewed as a strategic partner to the business. But all that is changing.
“I would like to think that CFOs are modernizing and becoming stronger CFOs,” according to three-time CFO Russell Lester. “We are primed to be [a] trusted advisor to the CEO.”
This shift to trusted advisor is allowing CFOs to elevate their role to a more strategic level. No longer are they just saying “no” because it spends money or it breaks the budget. They’re starting more holistic conversations across the business on where it fits.
When it comes to SaaS management, Lester believes CFOs have a huge opportunity “to be the hero to identify where there’s leakage or wastage in the system.”
But it’s not a job for them alone. By bringing together Finance and IT, finding common ground, and aligning on shared goals, you’re bound to drive results.
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Name: Russell Lester
What he does: Chief Financial Officer at Versapay
Connect with Russell online: LinkedIn
CFOs Are the Glue of the Organization
“When I think about how the CFO role is evolving, every week, I think about the fact that I’m being faced with opportunities internally and externally where more and more CEOs and leaders at the company are looking for trusted advisors. They’re looking for the CFO to be that voice, the one that can see across the landscape of the different factors happening because we are prognosticators for a living, and that’s what we do. We connect disparate data points. We try to see what the broader landscape is. What’s taking shape? What does it mean for the company? What should we do about it? And we are primed to be that trusted advisor for the CEO in that way. You’ve also got though the economy is creating liquidity issues. So interest rates we call dry powder being the money that’s kind of on the sidelines waiting to be invested. It’s an interesting time. Venture capital and private equity funds are not as free- flowing as they were in the past. And guess what? Companies are actually required to be healthy and profitable and have good unit economics. I would argue two to three years ago, there were unhealthy unit economics pervading, and we’re seeing many more companies are working to get healthier again. So all of this is happening simultaneously at the same time, which means the CFO is the one that is there to put it all together and to glue the facts together.”
A New Type of Finance Talent Is Needed
“I think of resources as systems, tools, processes. And so when I think about the type of people and the type of tools, it’s people and tools that put the information in context and at the fingertips. Not just reports, but reports in context in real- time as they are needed. And so you need the type of talent that can do that too, that can assimilate information quickly and connect pieces together. I think about the general finance practitioners. They need to be able to interpret the P&L. Accounting, we need people that can pay the bills, run the collections process, but it’s getting deeper than that. More and more CEOs are saying they’re looking for strategic advisors. They want the CFO to be the thought partner. Why is that? Is because we see it all. We’re privy to all of the good and the bad and the ugly that goes on behind the scenes, which the numbers bear out. And so we are here to tackle that challenge with data at the epicenter of all of that.”
Prioritization of SaaS Management Stems from the Perfect Storm of Factors
“What you have are companies that are working to grow exponentially and achieve high growth, hiring lots of people joining companies with all these new tools they want to use, dry powder, deploying funds, getting approval to invest, spinning up all these tools. Tenure is different now. People don’t stay as long at companies simply because sometimes they see opportunities elsewhere or the market dictates so. And so you’ve got this massive wave of all these new tools. And APIs, the ability for tools to connect one to another, also means, well, you don’t need to buy one tool, one singular tool to do everything. You can stand up the best of breed in all these different categories. But sometimes, standing up all these best of breed in different categories means you have this massive blast radius of tools all over the place. Well, there’s an opportunity there. There is, of course, an opportunity to simplify how work is done, but there’s also massive cost overrun. So what we saw at all three companies were the combination of factors, lots of new people joining the company, the proliferation of lots of new fancy tools that are all great in their own right, tools that had come and gone, and the people were no longer there that acquired them, and an opportunity for the finance team to be the hero to identify where there’s leakage or wastage in the system.”
Lead by Finding Common Ground
“Collaboration’s really important to me. And I’m not a perfect leader, and I don’t do it perfectly, but I try to bring my peers along on the journey. I try to avoid surprises. I try to lead through inquiry to ask questions. And this is better when you have shared goals. And so finding common ground between the CFO and the CIO or the CFO and the CISO, the chief information security officer. What are those common ground areas? Well, both want to certainly maintain top security for the company’s data assets. There’s also the desire to avoid the over- proliferation of tools, extra tools to oversee access control issues to figure out how to properly deploy capital. And so I think it’s about finding where the common ground is where it begins. That at the root of that is yes, you’re saving money. The reasons you want to rationalize your investments are to ensure you’re getting a positive ROI. But there’s a myriad of benefits to doing that. It actually makes people’s work easier if they’re using fewer tools that are not connected well together. Not only that, there are probably people maintaining tools that aren’t being used, right, and so it reduces their pain. There’s fewer security issues with tools that didn’t perhaps pass security muster. They may have years ago, but they wouldn’t presently. So there’s all these benefits to doing that, and it’s really just about finding common ground and partnering together, and tools like Zylo help you do that.”
A Tool Makes SaaS Management Easier, Unites Finance & IT
“I could either go into the ERP system and begin to look at line items in the general ledger and then drill into that and double click and see what the journal entries say who we’re paying. But then I have to filter out and figure out which of these are software providers and which type was this kind of software. It’s too hard. And so if there’s a tool that can do that more easily for me, I’m going to be all about that. It actually accelerated time to value and time to insights for the finance team. And so I think the reason why we placed it in finance was not at the expense of IT, was to come alongside IT and help carry the banner with them, reducing the tech footprint, which gets out of control. I mean, companies out there have literally hundreds of SaaS tools that are proliferating in the ether that their employees are using that they know about or that they don’t know about in the case of shadow IT. And it’s the shadow IT that can be the scariest of all.”
Fiscal Stewardship is Incumbent on the Entire Company, Not Just Finance
“You can have good intent, good people, good tools, good processes, but it really comes down to what is the mindset or the company culture. And is there a mindset of fiscal stewardship where the budget matters, where budget owners are asked to manage their budget, where forecast variances are not just blamed on finance. But in the same way we say, ‘Who owns customer success?’ In the past, we might say, ‘The customer success team.’ In the present, we say, ‘We all do.’ And so, who owns forecast accuracy? All of us. Who owns budget creep? All of us do. And so, it has to be modeled from the top, and there needs to be a good buy-in and advocacy from the CEO. The hardest part of building the relationship is ensuring there is that bridge, that advocacy, that understanding, that it’s not just about finance coming in and saying no. It’s about finance coming in and being a thought partner to say, ‘How can we find a better way so that we can redeploy this money that we’ve now saved the company toward things that will help us grow more,’ which we all want.”
CFOs Are Modernizing and Becoming More Strategic
“It’s not that the CFO didn’t have the authority in the past. The CFO could say no, but I think depending upon the state of the economy or the state of liquidity for the company, often their no was almost like we often hear with chief legal officers. Chief legal officers will often say, ‘I’m going to give you advice. You can choose to not take my advice, but you do so at your own peril.’ And it’s similar. I think in the past, the CFO could give advice, and they could say, ‘I wouldn’t recommend that investment,’ and business leaders would proceed to make the investment. But also, I’m going to go out on a limb here. I would like to think that CFOs are modernizing and becoming stronger CFOs. That we’re getting more well-rounded, that we’re getting access to a broader purview of the business because of tools, because data is now driving so many decisions, and we are naturally inclined to be able to consume, interpret, and leverage data as part of our every day – how our brains are wired. I think it’s putting us in the position where we can elevate the role of the CFO to a more strategic level where instead of just saying no because it spends money or it breaks the budget, we can actually be part of the holistic conversation to figure out where it does fit.”
3:11 – “There’s no time like now to be a CFO.”
14:14 – “[It’s] an opportunity for the finance team to be the hero to identify where there’s leakage or wastage in the system.”
17:55 – “It’s really just about finding common ground and partnering together.”
23:51 – “It’s about finance coming in and saying, ‘How can we find a better way so that we can redeploy this money… to help us grow?”
30:14 – “I would like to think that CFOs are modernizing and becoming stronger CFOs.”