Asking valuable questions that look into social media use, top marketing focuses, mobile marketing, and marketing communications, marketers will learn the metrics their peers and competitors are watching to determine the ROI of marketing activities and the areas where marketers continue to face challenges.

The previous reports show that technology is playing a significant – and in many cases, growing – role in corporate marketing. While nearly all companies have embraced social media marketing, other platforms, especially mobile, have only limited appeal for digital marketers. Last year, executives had yet to invest significant resources in their digital marketing efforts – though many appear ready to increase their commitment of both time and money. Will this be the year the results shift?

I encourage you to take the survey today and be a part of the ever changing industry. All survey respondents will receive the full comprehensive results and will automatically be entered into a drawing for an Amazon gift card.

This new Internet-enabled environment, often referred to as the “Internet of Things,” presents tremendous economic and social value, and is capable of transforming the way we work, communicate, learn and live our lives. Consumers, citizens and society as a whole stand to benefit greatly from innovative uses of data to improve health outcomes, streamlining and enhancing financial services, enhancing education and learning, and improving and maximizing our physical infrastructure.

SIIA proposes the following five recommendations for policymakers to maximize the beneficial outcomes of the Internet of Things:

1. Policymakers should promote technology neutrality and avoid technology mandates.
2. De-identification often provides an opportunity way to balance the needs of DDI and privacy protection.
3. Uniform rules cannot be applied broadly to the role of notice and choice.
4. The principle of data minimization should be re-interpreted.
5. The Internet of Things requires a policy framework that provides for an evolving view of privacy rights based on risk and societal benefits.

I will participate in a panel discussion at the National Press Club today about building trust and confidence with regard to the Internet of Things.  The 2013 M2M & Internet of Things Global Summit, hosted by Forum Europe, will take place in Washington DC today and tomorrow.

David LeDuc is Senior Director, Public Policy at SIIA. He focuses on e-commerce, privacy, cyber security, cloud computing, open standards, e-government and information policy. Follow the SIIA public policy team on Twitter at @SIIAPubPolicy.

Marchesano most recently was President and CEO of Aequor Media, a consulting firm dedicated to providing strategic, customized technology solutions for B2B and consumer magazines, newspapers, and Fortune 1000 companies.  Marchesano was also Managing Director at the Jordan Edmiston Group, an investment banking firm, where he led the sale of Congressional Quarterly to the Economist Group. Before that, he was Executive Vice President & Chief Transformation Officer at The Nielsen Company; President and CEO at VNU Business Media;  President and CEO at Bill Communications (an operating company of VNU), and President at BPA International (now BPA Worldwide).  Marchesano was an ABM board member from 2001-07, serving as chairman in 2006-07, and a SIIA Content Division board member from 2007-11.

SIIA President Ken Wasch said:

“With changing business models, new delivery platforms and new competition, the business media industry will benefit enormously from someone with Mike’s perspective and experience. With Mike at the helm, the ABM division will develop new programs and services that help to advance the business media industry.”

Marchesano said:

“With the merging of ABM and SIIA, the opportunity to showcase the unique and powerful role business media and information provides its audiences and marketers is very exciting. I am thrilled to take on this responsibilty for our industry and privileged to lead the organization.”

Neal Vitale, Chairman of ABM and President & CEO of 1105 Media, Inc. said:

“We are immensely fortunate to have been able to recruit an executive of Mike’s expertise and stature. I am looking forward to working with him as we grow ABM.”

Laura Greenback is Communications Director at SIIA.

Tech has historically been a male-driven industry. While statistics show women are still underrepresented in tech, emerging trends are paving the path for women to, not only be successful, but even dominate the future of technology. SIIA is proud to have many successful women leaders in our community. In our all new series, “Featured Women in Technology,” we will introduce you to these industry leaders and the lessons they have learned throughout their successful careers.

This week’s SIIA’s Featured Woman in Technology is Liz Pearce, CEO of Liquid Planner. Liquid Planner provides online project management software combining social collaboration with distributed planning. Read my interview with Liz Pearce below.

Name: Liz Pearce
Title: CEO
Company: LiquidPlanner
Home town: Indianapolis, Indiana
First job: Graphic designer

Bio:

Since 2007, Liz has helped more than 1500 project teams overcome scheduling and collaboration challenges through the use of best practices and better tools. Before joining LiquidPlanner, Liz ran her own successful marketing consultancy where she worked with a diverse set of clients. She also held management positions at Amazon.com, Google, and Sony Computer Entertainment America. Liz holds a B.A. in Political Communications and an M.A. in Telecommunications from The George Washington University, where she was awarded the Presidential Administrative Fellowship. Liz is an active member of the startup and technology community and is always looking for opportunities to learn, participate, and give back.

What are you currently reading?

Nate Silver’s The Signal and the Noise. Silver is the now famous statistician who accurately predicted the last two Presidential (and most of the Congressional) races by analyzing the meta trends aggregated across numerous national surveys. Ostensibly it’s about applied statistics but really it’s more about how many of the decisions we make on a daily basis are often based on faulty information and cognitive bias. It’s given me good food for thought when thinking about the decisions we make in our business and how we rationalize them – does it simply sound like a good idea or do we have the right data to support one investment over another? Highly recommended!

What is your next (dream) career?

I honestly can’t think of anything I would rather be doing than what I am right now. However, if I had to choose, I could envision starting a technology school specifically for young women. Women are sorely under-represented in the software industry, which is a shame on a number of fronts. I’m particularly inspired by the work being done by Hadi Partovi who co-founded Code.org with the goal of providing every student with the opportunity to learn computer science. Despite the great work that Hadi and others are doing, there’s so much more to be done in terms of making computer science and technology in general more appealing to young women.

Hobbies:

Who has time for hobbies? Beyond running a growing software company, I have two small children and a major home remodeling project in the works. It’s a good week when I can get to the gym! If I have a few spare cycles, I invite some friends over and cook up a big pot of soup. Chopping vegetables is cathartic.

What do you think is the hot button issue for the software & services industry in 2013?

Enterprise organizations are starting to seriously question their investment in expensive and unwieldy enterprise software. Of course, this is hardly a new trend but I do believe we’re at an  inflection point of sorts in which a new generation of lightweight, cloud-based applications can provide a realistic alternative to bloated legacy-ware. Not only is the price structure more appealing (especially from a Opex perspective) but employees are simply growing tired of having to use bad software to do their jobs.

What drove you to pursue a career in tech?

I worked as a project manager in the marketing department at Google in its early days – I think the company was at around 500 people at the time. I had the opportunity to learn about all of the different products Google was offering, and I definitely got bit by the tech bug. The tremendous growth we were experiencing and the buzz we were getting was infectious. The trend continued in my next role at Amazon, and that sealed the deal for me: I knew tech was where I wanted to be.

Do you feel you faced any particular hurdles being a woman in tech? What were they and how did you overcome them?

I’ve been lucky in my career to have worked for great female leaders at great tech companies all along the way. That said, I have sat in countless meetings and boardrooms where I was the only woman in the room. I wouldn’t say I’ve been blatantly discriminated against, but the phrase “boy’s club” exists for a reason. I’ve made my way this far with old-fashioned hard work, a direct communication style, and a thick skin. Now I work hard to pull more women up along with me through mentoring and coaching.

What advice would you give to young women who want a successful career in tech?

Never stop advocating for yourself! While women are climbing the ranks across industries, technology very much remains a male dominated industry. Whereas men are taught to be aggressive in asking for raises and promotions, too many women remain mired in entrenched societal norms in which they don’t vocalize their self-worth or promote their individual contributions. I always tell the young women that I mentor that no one will be a better or more persuasive advocate for their careers than themselves.

Rhianna Collier is VP for the Software Division at SIIA. Follow the Software team on Twitter at @SIIASoftware.

Market Backlash: Studies and surveys have suggested a possible backlash against cloud providers and technology companies generally.  Here’s a summary of some of them:

• CSA Survey: In July a survey from the Cloud Security Alliance reported  that  “10% of 207 officials at non-U.S. companies have canceled contracts with U.S. service providers following the revelation of the NSA spy program last month…the survey also found that 56% of non-U.S. respondents are now hesitant to work with any U.S.-based cloud service providers.”
• ITIF Study: By comparing projected growth of US cloud computing sales with a variety of hypothetical sales losses, ITIF suggests that US cloud companies could miss out on as much as $35 billion in additional overseas sales over the next three years.
• Forrester Study: Forrester thinks the potential impact could be as high as $180 billion by 2016, taking into account the reactions of U.S. and non-US companies, the impact on non-US cloud providers and the effects on the rest of the hosting and outsourcing market.

Repercussions for Tech: The NSA revelations continue to have larger repercussions for tech companies in the form of localization requirements and new challenges to the multi-stakeholder form of Internet governance.  Here are updates on several of these challenges:

• Brazil’s controversial new internet plans, calling for server and data localization, a local encrypted email service and a separate transatlantic cable connection to Europe that bypasses the US.
• UN General Assembly Address: After canceling a US state visit over NSA spying, Brazil’s Dilma Rousseff issued an announcement called the interception of Brazilian communications “illegal” and said such a “grave fact” was an “assault” on sovereignty and “incompatible with a democratic coexistence between friendly countries.”  She then delivered the opening speech at the UN General Assembly today, rejecting U.S. government surveillance programs as inconsistent with human rights and a violation of national sovereignty, and calling for “multilateral mechanisms for the worldwide network that are capable of ensuring principles such as:

1. Freedom of expression, privacy of the individual and respect for human rights.
2. Open, multilateral and democratic governance, carried out with transparency by stimulating collective creativity and the participation of society, Governments and the private sector
3. Universality that ensures the social and human development and the construction of inclusive and non-discriminatory societies
4. Cultural diversity, without the imposition of beliefs, customs and values.
5. Neutrality of the network, guided only by technical and ethical criteria, rendering it inadmissible to restrict it for political, commercial, religious or any other purposes.

She concludes: “Harnessing the full potential of the Internet requires, therefore, responsible regulation, which ensures at the same time freedom of expression, security and respect for human rights.”

Civil Society Calls for Principles: International civil society groups have issued a call for government surveillance principles consistent with human rights.

EU Response: Viviane Reding’s address in Brussels last week held up the Data Protection regulation as the EU’s response to the fear of US government surveillance, explicitly took privacy issues off the table for discussion in TTIP, and suggested the formation of an EU-area cloud that would compete globally on the basis of better privacy rules and streamlined government regulation.

Mark MacCarthy, Vice President, Public Policy at SIIA, directs SIIA’s public policy initiatives in the areas of intellectual property enforcement, information privacy, cybersecurity, cloud computing and the promotion of educational technology. Follow Mark on Twitter at @Mark_MacCarthy

What’s the status?  Congress has failed to enact any of the 12 annual appropriations bills for FY 2014 and the current fiscal year funding is set to expire at midnight on October 1, meaning funding for the entire federal government is at stake.  On September 20, 2013 the Republican-controlled House of Representatives passed a continuing resolution (CR) to fund the government through December 15.  Also included in this legislation was language defunding the so-called Obamacare health care plan.  The Democrat-controlled Senate is expected to strip the language defunding Obamacare and send the bill back to the House.  This sets up a potential gridlock situation and it is unclear if either side is willing to budge.

Why does this matter?  As a government contractor you need to be prepared in the event of a shutdown, since funding for many if not all of your current contracts may be affected.  Your employees are reading the news and they know the potential and they want to know their leadership is making contingency plans.

What should you do?  OMB has sent a memo to government agencies telling them to prepare for a shutdown and prudent business planning suggests you need to be ready too.  Here’s a quick checklist of things you should be doing and thinking about related to a potential shutdown:

1. Be Proactive:  Don’t sit back and let the rumors swirl, take charge of the situation within your company.
2. Communicate:  Communicate honestly, early and often with your employees about what you know and what you expect will happen if the government shuts down.  Make sure your company speaks with “one voice.” This will keep misinformation (i.e. rumors of furloughs and layoffs) to a minimum.
3. Understand Your Contracts:  Review your current contracts to understand which will be affected in the event of a shutdown and which will continue.  Projects funded by revolving funds for example won’t be affected.
4. Gather Intelligence:  Gather as much intelligence as possible by talking to industry partners and trade associations and having your engagement managers talk to their contracting officers and COTRs, i.e. the client.
5. Set Up a War Room:  Set up a formal process inside your company to monitor developments related to the potential shutdown, a “war room” if you will.  Be ready to kick it into high gear if a shutdown occurs.

Let’s all keep our fingers crossed and hope that Congress and the President are able to work out an agreement that keeps the government open and operating beyond October 1, while preparing yourselves for a potential shutdown through effective communication with your employees and smart business planning. Contact me at mhettinger@siia.net or (202) 789-4456 with any questions.

Michael Hettinger is VP for the Public Sector Innovation Group (PSIG) at SIIA. Follow his PSIG tweets at @SIIAPSIG. Sign up for the Public Sector Innovation Roundup email newsletter for weekly updates.

Listen to this pre-recorded webinar to learn how to improve your product team performance.

Presenters
Greg Geracie
President, Actuation Consulting

Click here to view the executive summary or to view the complete report click here.

“Things have changed a lot in the last 18 months,” he said. “There are a lot more self-serve tools. The hardest thing to figure out [for going mobile] is, how are you going to use it? What’s the purpose? What’s the model? There are some people who take all their time trying to find the perfect colors. Really.”

Schwartz will join Ed Keating, chief content officer for BLR, this Thursday in the second of SIIA’s Mobile Essentials Webinar series—Monetization and Business Models. SIPA/SIIA/ABM members can listen free by registering here. The first webinar made the business case; this one will help you build the right model.

Considering that this is just an hour of your time about something that might become a huge percentage of your business, it’s highly recommended. Mobile commerce now accounts for about one out of every 10 e-commerce dollars. Integrating mobile platforms into your overall business models and strategy is crucial.

A blog post on the comScore website at the end of last month listed five things that every marketer should know on this topic. It’s a helpful list:

1. Be there. “One out of every three monthly visitors to the average digital retailer website comes exclusively on mobile platforms. …retailers who do not (at a minimum) optimize their mobile browsing experience or introduce mobile apps are effectively turning away a third of their potential customers.”

2. Know thy customer. “Mobile apps drive smartphone retail engagement, while mobile browsing wins on tablets.” You probably don’t have the time or resources “to develop a fully optimized experience for every platform. Knowing how your customers engage with retail on their phones and tablets can help you better prioritize your efforts.

3. Prioritize. “Smartphones drive a higher share of m-commerce dollars than tablets, but less on a per device basis.” Tablets are gaining in numbers, however, so you’ll have an interesting decision on where to first focus your user experience.

4. Know thy content. “Retail category browsing can vary considerably by platform.” Basically it’s common sense but still important to think about. Is there a visual component to what you are selling or how you are selling? Perhaps you want people to see charts and graphs in your marketing? Speakers’ faces. That might do better on tablets, where apparel and home furnishing sales excel. Interestingly, health care is the only category listed that does better on smartphones, though it’s pretty close on books and consumer electronics.

5. Plan now. “M-commerce spending seasonality shows wider variance than traditional e-commerce.” It may be quiet now, but with holiday season lurking, expect a huge jump. “Consumers…are also increasingly comfortable using [their devices] to transact. Retailers with an advanced understanding of m-commerce will be able to most effectively deploy their assets and marketing resources during the year’s most crucial spending period.”

Schwartz went on to show me—on his tablet—a list of Time Inc.’s 25 top love story films of all time. It was impeccably designed. “They could easily do 100 and get sponsors for it,” he said. In other words, the sky’s the limit.

U.S. adults will spend more media time on mobile this year (19.8%) than on their laptops and PCs (19.5%). Tablets are sparking this trend. Last year, 10% of tablet time was spent watching videos; this year it’s 19%. Join us in this important webinar series. Register here now.

To subscribe to the SIPAlert Daily, create or update your SIIA User profile and select “SIPA interest.”

Ronn Levine began his career as a reporter for The Washington Post and has won numerous writing and publications awards since. Most recently, he spent 12 years at the Newspaper Association of America covering a variety of topics before joining SIPA in 2009 as managing editor. Follow Ronn on Twitter at @SIPAOnline

Today’s post is brought to you by Jim Shepherd, VP Corporate Strategy and Product of PlexSystems.

Comprehensive Coverage Throughout the Enterprise

The manufacturing enterprise benefits from comprehensive, real-time financial tracking, analysis and reporting of accounts receivable, customer credit management, receipts and other activities. It’s a strong disadvantage if the organization uses stand-alone spreadsheet systems to track purchasing, receiving, shipping, accounts payable, collections and other areas.

With stand-alone and manually intensive systems, the challenges include tedious tracking and maintenance of physical documents like invoices; lack of visibility into financial record-keeping such as tracking payables and receivables; a high likelihood of introducing error via duplicate data-entry; and other issues.

For example, if a manufacturer has a contractual agreement with a customer to extend credit up to certain shipping volumes, the accounts receivable system must fully integrate production, shipping, outstanding orders and delivery data for accurate tracking of the contract. It this data is not fully integrated, the enterprise incurs unnecessary risk and high levels of outstanding accounts receivable. How can production know if they should build more products for this customer? When does the shipping department get word to halt deliveries?

Automation and integration also improve collections tracking. An integrated system brings all outstanding credit information together in one easy screen, providing accounts receivable visibility for credit collection management including automated notices based on numbers of days receivables outstanding.

Scalable Financials

Manufacturers face a complex world of multi-plant, multi-company and geographically dispersed operations. Having the ability to scale financial management and record keeping from one plant to across the global enterprise is crucial.

As an example, a small US-based metal stamper recently embarked upon a contract with a German-based tier one supplier. The contract stipulated that the metal stamper meet German accounting requirements when issuing purchase orders and shipping documents. This would have been virtually impossible with a stand-alone PO system. In essence, the metal stamper would have to maintain a separate PO process for this one customer reflecting localized requirements, format changes, and currency.

Fortunately the metal stamper had in place an integrated system that easily incorporates and manages data in multiple languages, currencies, and date formats, including local tax and business mandates and other business requirements unique to specific countries or principalities.

Even though it is only a small company, the metalformer was able to lower administrative costs and improve productivity by accessing real-time, locally customized and integrated business information including manufacturing processes, engineering, sales, accounting, quality, production, purchasing, receiving/shipping, and inventory.

Further, the system can scale across multiple companies should the need arise. Financial reports, such as income statements and balance sheets, combine results for two or more companies. Features include multiple levels of consolidation, intercompany eliminations, currency conversion, and multiple report formats.

Keeping an Eye on Margins

While price cutting helps a manufacturer compete and maintain volumes, as a company lowers prices, profit margins suffer, endangering overall sustainability and financial health. In the end, manufacturers using multiple systems (or manually intensive systems) have no confidence in their data – even in the most basic of information, the cost to produce a product. Keeping an eye on profit margins has everything to do with maintaining accurate costing and bidding data.

As an example, a tier two supplier uses an integrated ERP system to track actual production costs on the shop floor, drawing upon that data for the quoting process.

“Actual cost to bid” directly impacts the company’s profitability. When actual cost is lower than the bid proposed to the customer, companies risk losing business to a lower priced competitor. If the actual cost is higher than the quote, the company loses money on the order.

Because the company’s ERP system tracks and records all physical events (receiving, production, inventory status changes, scrap, subcontract, shipping, etc.) on the shop floor, it’s ideal for tracking cost. How much does it cost to make a certain part? Which parts are more profitable? How low a price can they afford to quote? The company is able to answer the questions with precise data instead of guesses, thereby protecting margins without sacrificing productivity.

Cash Flow Considerations

Automated financial systems also contribute to an improved cash flow situation.

As an example, winning companies improve cash flow by paying only for raw materials or parts as they are consumed, instead of paying for them in advance of production, then assuming costs of storage. This is accomplished by automated supplier consignment tracking where invoices are generated only when the parts are consumed by the manufacturer. This helps companies reduce inventory storage costs, cut premium freight charges, and speed production cycles.

Traditional accounting, ERP or inventory software systems do not handle consignment tracking adequately. Most manufacturing companies can’t take advantage of consignment arrangements, or are forced to track the process manually with double data entry.

The key is to automatically track the movement and accounting of inventory, with the system managing payment only after it is consumed. If an integrated ERP solution offers automated supplier consignment, inventory from a supplier is delivered to the warehouse and consumed and invoiced directly from stock, typically tracked using barcodes that are scanned just as the material is consumed.

Compliance

For public companies, no discussion about manufacturing financials is complete without mentioning the importance of complying with regulatory regulations such as Sarbanes-Oxley.

Manufacturers must implement financial processes and controls for maintaining auditable business transactions and transparency. Manufacturing management must have complete confidence in financial systems and in the accuracy of related reports.

Look for an ERP system that integrates compliance requirements in all functional areas to avoid the need for redundant record-keeping or third-party applications.

For more information about the latest in financial technology trends, mark your calendars for Deciphering Finance 2013, on Dec. 4 2013.

Today’s post is brought to you by Lauren Kelley, CEO and Founder of OPEXEngine.

For years, CFO publications, conferences and networking events have trumpeted the need for CFOs to move from being the top accountants in a company, to playing a more strategic executive role in driving corporate performance.   “Strategic” implies both an ability to influence future performance, as well as a collaborative management role.  By contrast, the traditional CFO has focused on tracking performance that has already happened and at best, working towards cutting costs and expenses going forward.

Many CFOs have not played a fully strategic role in their company because by relying solely on internal data and accounting of past performance, they do not have the tools necessary to influence strategy adequately.  Often, the CFO’s voice is just one more voice in what can be a chaotic decision making process around determining the company’s budget and strategic performance goals.

Benchmarking Provides the CFO with a Strategic Tool – External Data – to Influence the Numbers

External benchmarks and the benchmarking process overall, give CFOs powerful tools to influence corporate performance goals in a way that is both strategic and collaborative.  External benchmarks help identify areas where a company could be more efficient with its resources, and also where the company is more efficient than its peers and therefore should continue to support and perhaps expand investment.  Moreover, external comparisons of market leaders can help identify efficient business model changes, which are a given in today’s dynamic business environment.  From a collaborative perspective, external benchmarks take much of the conflict out of the decision making process by providing data-based context for difficult business decisions.  Financial comparisons provide validation and credibility to corporate performance targets for the executive team.  When the senior management team feels the numbers are fair and achievable, it typically leads to better target achievement.

Without good quality benchmarks, developed with current data, everyone will predict the future based on their past experience, which may or may not relate to the current company, the current environment and current best practices.  Without external data, the CFO is relegated to tracking and presenting past performance and making assumptions based on previous performance.  In this way, future performance assumptions will be based on a trend line determined by the past and aiming towards the same performance.  However, today’s business world assumes constant performance improvements, rather than more of the same.

Good Quality 3^rd Party Data versus Anecdotal Benchmarking

Companies have often relied on random surveys of industry benchmarks, or anecdotal information collected by calling peers for comparison information.  These information sources provided some context for setting corporate performance goals, but typically the data was an aggregation of disparate companies and business models.  An industry survey of the software industry might average financial data from Microsoft and a $1,000,000 start up and several hundred other companies with very different business models, many of which might not really be “software” vendors.  Company ratios will obviously vary tremendously between a $74B public corporate giant founded almost 40 years ago and an early stage company founded 3 years ago.  Similarly, gathering anecdotal data based on one’s personal network is useful to provide context and to learn about best practices, but does not develop good quality data, and also does not have the credibility with other executives as 3^rd party, external data sources that use established benchmarking methodologies.  And it takes a lot of time to gather anecdotal information from peers.

In the software industry, good quality business benchmarking is particularly important given the wide variety and dynamic nature of software business models which range from on-premise software sales, software-as a service (SaaS) subscription-based sales, transaction fee based revenues, and revenue models which are a mixtures of all of the above.   Not only do the benchmarks change based on the business model, but some of the critical metrics for determining corporate performance will be different based on the business model.  SaaS companies track subscription numbers, conversion and renewal rates, plus calculations of customer value and profitability.   On-premise software models focus far more on pure revenue recognition and revenue to expense ratios.   Transaction fee-based models typically track numbers of customers and the revenue processed by customers.  Open source and freemium models track downloads, users and other metrics to quantify the potential size of the market and potential for conversion to paid customers.

Getting the Context Right

“If you live to be one hundred, you’ve got it made.  Very few people die past that age,” George Burns.

Benchmarks are most useful when the business context being compared is clearly understood.  Microsoft’s expense ratios will be far different, given their billions in revenue and 40 years in the market, versus an early stage company with small revenues that is spending a far higher proportion in sales and marketing to identify their target customer and establish their business.  This is true even if the startup is selling in the same market as Microsoft, or selling competitive products.  Or take the example of SaaS giant, SalesForce.com.  Many software CFOs tell me that they always have to compare themselves to SalesForce’s metrics, even though SalesForce is a $2.3 billion public company with a market capitalization of over $15 billion.  David didn’t beat Goliath by trying to emulate Goliath, but by being the most efficient and focused with the resources that he had at the time.

Defining Your Peers

CFO’s have greater credibility in influencing the numbers when using benchmarks based on credible peers.  We find it more useful to compare your company to peer groups made up of companies at a similar stage of growth with similar business and sales models.  In any given market, there will typically be competitors that are far larger, and some that are much smaller.  Some companies will sell to the same customers but with a different model.  Comparing your performance metrics with companies at very different stages of growth is unfair and will not give you an indication of where you could be using the same resources more efficiently.  And benchmarking against your peers can also highlight areas where you are using your resources more efficiently than similar companies, and therefore should support and perhaps expand investment for even greater results.

Benchmarking is a great, collaborative management process, not just information.

Finance in general and CFOs in particular are often tarnished with the brush of being the company expense managers and unfairly wanting to increase revenue with fewer resources.  By involving the rest of the company in the benchmarking process from the beginning, even if only by sharing and reviewing external data with key executives, Finance can be seen as providing valuable, neutral information to support a collaborative, data-driven process around complex, strategic decisions.

A Best Practices Benchmarking Example

One of our clients, Rally Software, a fast growth, venture backed agile software developer, incorporates benchmarks consistently to drive strong corporate performance and management efficiency.  They have participated for a number of years in the OPEXEngine and SIIA annual software and SaaS benchmarking.  The Finance organization uses the benchmarks to support the regular budgeting and strategic planning process, by delivering a benchmarking presentation to each executive department of the company, at the start of the annual budget process.   Each senior executive is asked to develop a budget in the context of peer benchmarks, and to present their budget and target proposal to the executive team with a discussion of why they feel they should be above or below the peer comparison for their department.

Benchmarking Takes the Friction out of the Budget Process

Rally’s executive team says that they find the budgeting and strategic planning process to be quick, efficient and collaboratively fact-based, as compared to their experience at other companies where it typically can be very chaotic and disruptive.  In many companies, the budget process is long and drawn out, taking precious time away from daily focus, especially at the end of the fiscal year, to the point where everyone agrees to the numbers just to get the process over.  In Rally’s case, executive management has even said they enjoy the budget process as they feel personally involved in determining how best to use all the company’s resources, and beat their performance.  And once management has committed to a budget plan, Rally’s finance department uses the 3^rd party benchmarks to set the context for efficient board approval.  Overall, Rally finds using outside benchmarks extremely useful to drive an efficient, data-driven budgeting process with strong executive and board commitment to the corporate goals.  All it took was to provide good quality, 3^rd party benchmarks, share them with the management team and ask that budget requests be based on the context provided by the benchmarks.

Critical Tool for CFOs to Improve Corporate Performance

Benchmarking is not a blueprint for how to run your business.  We always advise companies in our practice that you don’t always have to beat all the peer benchmarks, it is just important to know how you stand in comparison to your peers on critical metrics and make decisions based on that context.

CFOs who use good quality, 3^rd party data to play a more strategic and collaborative role in setting corporate targets, will increase corporate value.  Many companies, especially in the fast moving software industry focus purely on just growing as fast as they think they can, without having the time to improve efficiency or decision-making.   The most successful companies are extremely metrics and comparison driven.  Compare growing a software company to developing world class athletic achievement:  the best athletes constantly compare and analyze their peers’ numbers.  By doing so, athletes consistently improve their performance.

Usain Bolt wins at the 2012 London Olympics

Shouldn’t your business do the same?  There are many good sources of data available today, and it will only get better.  It doesn’t take much time to get started benchmarking and sharing the benchmarks.   It is a critical tool to being a strategic CFO who influences the numbers, instead of just understanding the numbers.

For more information about the latest in financial technology trends, mark your calendars for Deciphering Finance 2013,  on Dec. 4 2013.