Placer.ai CFO on Accelerating the Marriage of Finance and Strategy

Top chief financial officers are drawing up their battle plans in the face of a tough macro economy.

Dean Neese, CFO at location intelligence solution Placer.ai, told PYMNTS that while finance teams are being tasked with an ever-growing plate of responsibilities, first among them is acting not only as a financial partner, but increasingly as a key strategic resource for the business.

“Given the recessionary headwinds that we’re in, it is going to be a harder time for startups,” he said. “But great companies will always find funds, will always find investors. Businesses with strong balance sheets will have the fortitude to go the distance.”

Neese added that marketplace ebbs and flows are cyclical, but good cost management and good cost discipline are universal.

In challenging macro environments, process improvements are about more than just optimizing working capital and strengthening balance sheets; they’re about having the right insights and protocols in place to succeed in the face of the unexpected.

“The [direction the] CFO role is going in, supported by today’s digital solutions that help finance leaders do a great job marrying finance and strategy, is allowing organizations to not only have great numbers and understand variances, but also to strategically extrapolate from them to inform sustainable and healthy resource allocation,” Neese said.

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Data-Informed Decisions Help CFOs Manage Spend and Growth Cycles

Responsibility for CFOs lies in managing profitability as well as the two sides of growth and efficiency in order to find the right level of both to be successful and sustainable as a company.

Neese emphasized that “where you’re spending money, that’s the strategy,” which is why taking a proactive approach to resource allocation is mission critical.

What increasingly underpins that proactive approach is the integration and activation of relevant data into business insights.

“Verticalization and understanding your [total addressable market (TAM)] by customer segment and market segment is becoming critical,” he said. “It may sound like more of CRO or CMO questions, but working in-step with other departmental executives is where it all comes together to define a fantastic strategy for the future.”

Placer.ai is in the insights business itself, and Neese addd that information is helpful because the right data can either help organizations change their decision or make that same decision faster.

“In good times, insights and solutions can help businesses manage growth in the most effective way they can; and in bad times, data can help organizations answer questions about how they can contract efficiently,” Neese said, adding that a lot of the information available today simply didn’t exist or wasn’t possible to act on in the past.

The recent collapse of Silicon Valley Bank and Signature Bank has underscored the need for businesses to review their growth strategies, identify efficiencies and manage cash flow better.

In order to do that effectively, Neese said, organizations need to be able to “trust the information they’re getting. It needs to be reliable and high accuracy, … and it needs to be accessible and user friendly.”

It’s not just sharing data, but also portraying it in a way that is helpful for decision making, he added.

Regarding the banking crisis, Neese emphasized that he sees the “new normal amongst CFOs” as always having two bank accounts.

“The strength of [those banks’] balance sheets is also what’s really coming into question,” he said, while noting that for his organization, it’s been “pretty much normal” operationally, but the biggest challenge for CFOs may be convincing their boards not to be skittish and react solely on gut instinct.

Neese said Placer.ai is fortunate to be in a strong position, with a product offer that resonates “no matter what kind of macroeconomic cycle you’re in,” but even that comes with its own set of challenges, like talent management.

“While it may seem like a chief people officer problem, it’s really a finance problem because hiring is the largest expense category for any company, and as the largest cost center, you really need to make the right decisions around it,” he said.

As for what’s most critical in framing up the right decision, no matter the context? It’s data and data integrity effectively leveraged as part of a productive marriage of finance resourcing and strategic planning, Neese said.

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