Alyssa Filter, CFO of revenue operations platform Clari since 2018, considers herself a "data-driven CFO." She makes decisions about investments, cost management and AI implementation based on the cues she receives from her colleagues across the enterprise, letting them lead the way. 

Being a data-driven CFO means having real-time visibility into pipeline and forecast data. "Having confidence in quarter outcomes means I can make earlier and more informed decisions on things like our hiring plan and marketing budget," Filter said. 

The pandemic, however, has thrown a wrench in this once-seamless distribution of information and numbers. Without reliable key performance indicators (KPIs), benchmarks or data, Filter has had to chart a path forward with educated assumptions and running multiple scenarios with sensitivity analysis.

But how effective is planning when you can't see the future? Filter says it depends on your approach. 

Success story

"We recast our operating plan and had it board-approved within two weeks of the shelter-in-place order," she recalled. "We did a significant amount of scenario planning and revisited our strategy for the year to ensure we had a strong 'north star.'"

When relying on historical trends isn't an option, the idea of being data-driven changes a bit, she said. "I think 'data-driven comes' in many different forms, but right, having real-time data accessibility is more important than ever."

CFOs are expected to drive profitability, efficiency, and operational success, Filter said, adding that leveraging data and analytics is crucial. And while the data does exist, it's often siloed and improperly used.

The data many CFOs receive about the business pipeline, conversions and current quarter deals are often stale by the time they arrive on their desks, she said.

"Having access to real time, on-demand data is critical for continuously updating my plan," she said. "With real-time insights, I can quickly make changes to things like our hiring plan or marketing budget."

Thoughts on investments

"Analytics-savvy CFOs can leverage both financial and non-financial data to support cross-departmental decision making and be strong business partners throughout the organization," Filter said. 

"We do have pipeline data, but our past data and benchmarks on how that pipeline moves through the funnel are no longer helpful," she said. "So we did a lot of analysis on what a range of outcomes would look like."

As for whether forecasting tools or AI supplements should still be considered during the pandemic, even as spending may be incredibly tight, Filter says they are still worth the investment.

"Tech and forecasting are, by far, the most important [tools], because they're how we make all of our decisions," she said, adding that implementation of new forecasting software is relatively quick, especially for smaller companies, which could allow them to be up and running, pulling in historical data in a matter of hours. 

"There's also a cost offset by being able to leverage resources in different ways," she said. "Revenue platforms [should] include all the adjacent functions: marketing, customer success and sales and finance partners there." 

Filter encourages CFOs to work closely with marketing and growth teams, as well as with the sales side of the office. "Clari is a subscription revenue business, so partnering with our customer success team, understanding what customer success looks like, and seeing where we run the risk of churn, is all really important," she said. "And as a sub-revenue company, making sure we don't have a leaky bucket with our ARR is just as important as bringing in new revenue." 

A word of advice

Filter advises CFOs to be fluid, and maintain an ongoing and changeable process. "Things are changing day by day, minute by minute, with so many external factors," she said. "It's really just about taking those external inputs, and continuing to be fluid in the planning process and making decisions as updates come your way." 

Since Clari's initial re-plan, Filter has continued to monitor, tweak, and remain open-minded towards modifying as time passes. "We also ensure that the operating plan supports the key company strategy themes, and that we're investing in the right areas," she said. "Now that we're mid-pandemic, we've been able to validate some of the assumptions we leveraged when building the plan, and to tweak others as we move forward."

Filter also leverages peer group, investor and advisor opinions on what they're seeing elsewhere in the market among other private companies. 

In recent weeks, Filter has assembled a three-pronged framework for becoming a truly data-driven CFO: first, map key company objectives to KPIs. Second: measure performance using data and quantitative analysis against those KPIs. Finally, leverage those KPIs and performance metrics to make decisions on company strategy and financial planning.