With the right methodology, cost productivity discipline not only helps fuel steady growth and big initiatives but also are rewarded by shareholders, leading to substantially higher TSR, in both good times and downturns, according to Bain long-term research.

Software companies spend more on R&D (research & development) & less on Sales & Marketing (S&M) as a per cent of revenue today than six years ago.

CFOs should think about automation as an “additional teammate” in their financial departments as they look to push digital transformation initiatives forward in the new year.

In an increasingly data-driven world, a surplus of conventional wisdom and “generally accepted benchmarks” constantly bombard SaaS company executives.  When performance benchmarks are used correctly, there is a tremendous value creation opportunity which starts and ends with precision cohorts.

Usage-based pricing is good for the customer but makes predicting revenue difficult. CROs & CFOs are challenged w/ predicting how much revenue is expected and when it will be realized. This guest post from revVana explains a simple approach to improving your revenue forecasting.

During October, Tomasz Tunguz held Office Hours hosting Carilu Dietrich, marketer and advisor at Atlassian to discuss how to successfully run a PLG program. Dietrich shared the 5 pillars in this guest post from Tomasz Tunguz.

Improving visibility into company cash flow and gaining tighter control of data is essential for financial leaders as they brace for the possibility of a recession, according to a study.

Usually, the customer churn rate is every SaaS company’s worst enemy. But in this article, we’re going to show you how to not only deal with churn effectively but also how you can use your customer churn data as a valuable tool to build your business. Voluntary churn vs. involuntary churn: What’s the difference? Before looking […]

New market leaders have emerged that are far exceeding the performance gold standard Rule of 40, hitting numbers in the 50s, 60s, and even 80s. In this article, Bain has identified four archetypes among these superperformers.

OPEXEngine, a worldwide leader in SaaS benchmarking, celebrates 1 year anniversary as part of Bain & Company with the release of its “BenchmarkEngine 2023” platform  BOSTON, October 5, 2022 – OPEXEngine, the world’s leading SaaS benchmarking platform, today marks its one-year anniversary as part of Bain & Company. As part of that celebration, it is excited […]

It’s no secret that the current uncertain economic climate is taking a toll on our work and personal lives. During times of uncertainty, executive leadership teams make more conservative financial decisions in order to prepare for and/or prevent any major difficulties for the companies that they lead. These decisions and preventative actions have repercussions that […]

Our August SaaS conversation focused on high performance in R&D, with OPEXEngine CEO and Founder Lauren Kelley hosting Bain Expert Partner Rob Levy. Advances in automation and new engineering techniques are enabling faster development cycles, raising expectations for ROI from the R&D function.  Lauren and Rob shared a range of benchmarks that executive management should consider to accurately assess R&D ROI and resource allocations.  

According to a new Bain brief, there are 3 time-tested principles to navigating changing market conditions, or a recession and using data and analytics to thrive. Data and analytics alone won’t get you there, but by following basic best practices, research shows you have a high chance of succeeding.

Even when the market is repricing and falling, key growth metrics remain fundamental targets to maintain or grow company value because they remain highly correlated to higher valuations, even in this market. While valuation multiples in public markets have dropped dramatically over the past 6 months, the Magic Number (of Sales and Marketing Efficiency), Revenue Growth, and Rule of 40 still align well to top quartile multiples. OPEXEngine looked at 32 public Cloud companies under $1B to see how their current Market Cap to current TTM revenues tracked against these growth metrics.

In today’s market, the path to growth for B2B SaaS companies is to continue following the two SaaS lodestars:  customer acquisition and customer retention.  The companies that successfully navigated through various market disruptions, including the recession in 2008, continued growing by diagnosing whether their acquisition and retention investments were efficient. That means focusing on KPIs […]

New solution supports better resource allocation and engineering outcomes across the $300B+ technology R&D sector BOSTON, June 13, 2022 – OPEXEngine, the world’s leading SaaS benchmarking platform, today launches its new R&D benchmarks solution. The benchmarks help technology executives invest in R&D with more confidence by comparing their own costs and performance with similar organizations. New […]

This first review looks at trends in SaaS financials, P&L expenses, and invested capital for private SaaS.  During the month of June, we will review changes we are seeing in customer-facing operations, R&D ROI, and human capital management.

Will there be a recession?  Will private SaaS valuations be affected by the drops in the stock market?  Will fundraising be tougher for all tech companies, or just certain types of companies?  In this blog post, Lauren tackles some of the questions that we have been hearing from SaaS CFOs across the spectrum.   

Reporting of the Remaining Performance Obligation (RPO) Saas metric began with the adoption of ASC 606. In this guest post from Eric Mersch, he explains how this SaaS metric is calculated as the sum of Deferred Revenue and Backlog and why it has become an important indicator of SaaS financial performance.

Customer acquisition cost (CAC) is arguably one of the most important metrics for fast-growing B2B SaaS companies.  It measures how much it costs to acquire a new customer and is a key factor in determining the profitability of a business. In this blog post, we will discuss how B2B SaaS CFOs can effectively calculate and monitor these costs, while identifying ways to establish if their financial efforts are in line with relative sources. 

Recruiting, hiring and retention of productive employees is critical for SaaS companies. An area that I don’t think gets enough attention from any company is the qualification and interview process for new hires. Especially in 2022’s competitive, inflationary environment, improving this process is both cost-effective and necessary for almost every company. Dave Kellogg, an amazingly thoughtful CEO and advisor provides interviewing best practices – focusing both on what the organization needs to do to prepare and then the interview process itself.

In the right situations, a Product Led Growth Model can be a viable strategy for software companies. However, it’s important to be aware of the potential pitfalls so you can avoid them and maintain your focus on what’s best for your product and customers. In this guest post by Chris Mele, he evaluates the PLG model, and how software companies can do due diligence before implementing a Product-Led Growth Strategy.

Private equity blew the doors off in 2021: over a trillion dollars was invested last year by global private equity firms and almost a trillion dollars was returned in exits. The technology and specifically the software and SaaS sector represented 25% of the value invested and 31% of the number of deals. According to new Bain & Company research, over 50% of software deals returned 2.5x or more to investors. Bain also predicts that SaaS and software multiples will continue to be high in 2022 – read more here from Bain’s research on how Private Equity keeps winning in Software.

In the first 10 years of the SaaS industry, US SaaS companies didn’t need to go overseas to build highly valuable companies. But that dynamic has changed in lockstep with the growth of the SaaS market. Gartner forecasted that global spending on SaaS applications is easily going to exceed $1Trillion by the end of the decade—if […]

Over the last three years, start-ups have raised funding every 15 months. As your SaaS company grows in complexity and expectations, you reach a point where manual processes waste time away from analysis, and you struggle to collect and act on your growing range of financial and operating data. At this point, you need to […]

In this guest post from FLG Partners, author Eric Mersch focuses exclusively on Small/Mid-Market SaaS companies, and how CFOs must continually monitor the competitive market dynamics to serve as a powerful business partner.

In the absence of formal reporting guidance, large, hazy stretches of uncertainty can easily skew gross margin and significantly impact SaaS companies’ valuation. For these reasons—several expense categories bear special consideration right now, and benchmarking COGs against peers is critical to help manage your metrics for better decision making.

Nikki Turner joined the OPEXEngine team as Strategic Finance Consultant. In her new role, she will partner with tech finance executives to evaluate their operational and financial performance against their respective cohorts, while assisting them in implementing various usage models that leverage proprietary OPEXEngine benchmark data.

When it comes to IPOs, 2021 was an excellent year for SaaS companies. Accelerated digital transformation across industries put SaaS companies firmly on the hypergrowth path. But this kind of hypergrowth doesn’t happen overnight. In this guest post, written by Mike Beach, insights are shared with CFO on how they can prepare their SaaS enterprise for hypergrowth.

With 331 SPAC deals enthusiastically closed in 2021, and the collective pool now trading on average 42% below purchase price— we are living in a far different landscape of capitalization opportunities than we were this time last year. Against this backdrop, every SaaS company would be well-served to consider three things as they plot their path to public capitalization: speed to market, the cost of its finance team’s capitalization efforts, and investment scrutiny.

Challenges wrought by the pandemic haven’t come with easy or obvious solutions—other than a measure of agility to adapt to new situations. For three CFOs who began their new roles amid the crisis, planning for volatility required an understanding of their core business, a focus on key priorities, and experience in tackling the unknown in previous roles. In this guest post from Workday Adaptive learn how they were adaptive and leaned into past experience to propel them forward.

Many companies in the technology industry are moving toward “pay for what you use” consumption-based pricing models. The trend has been bolstered by several customer benefits — primarily, the model provides a clear linkage between what a customer pays and what they use or value they realize.
This guest article from CFODive, gives guidance to CFOs seeking to transition from one pricing model to a consumption-based pricing model.

Consumption pricing–a licensing model where software is sold based on use (actual traffic, transactions, etc.) rather than a fixed fee–is making the headlines these days. “Subscription-based pricing is dead: Smart SaaS companies are shifting to usage-based models” headlined a recent TechCrunch article. “How Usage-Based Pricing Fueled Two 2020 IPOs” led one from Insight Partners. It’s the kind […]

Business leaders will often see their strategies fail, regardless of how much thought they put into it. Not every effort pays off, and not every investment is worthwhile.

KPIs allow recruitment agencies, hiring managers, and recruiters to understand how successful their actions are in helping them achieve their goals. This guest article from Business 2 Community will analyze what KPIs are necessary to track in order to have a successful SaaS recruitment process.

Since 2016, public software has witnessed four corrections. We’re in the midst of the fifth. This guest article from Tomasz Tunguz explains how corrections affect company valuations, and it affects private SaaS companies and their valuations.

Technology was a driving force behind the boom in venture investments over the past decade.

From 2010 through 2020, tech start-ups made up a majority of venture funding across all deals by independent venture capital (VC) firms and corporate venture capitalists. This guest article from Bain provides insights from their analysis using their Startup Investment Cruncher database.

A usage-based pricing model, which leads to increases or decreases in revenue based on how much customers engage with a service, has been gaining on the more traditional subscription model as the main way SaaS companies make money. There is an appetite for usage-based pricing and is expected to continue to accelerate.

This guest article from CFO Dive delves into why some are making the switch. However, there’s one category that hasn’t moved over to a usage-based pricing model. Read this article to learn who is not using it.

According to Tomasz, there hasn’t been an architectural shift in SaaS since the advent of the multi-tenant database, which allowed SaaS companies to put all of their data across customers on a single database. This may be the next shift.

This guest post from Tomasz Tunguz explains the innovation and implications of having two feedback loops: 1) influencing customers and users, and 2) outputs data products and insights that are then fed into the data warehouse layer for downstream consumption.

When searching for the quantitative indicators of product-market fit, numerous investors and advisors point to Lenny Rachitsky’s definition matrix, which optimizes retention, growth, and profitability. When your product finds itself at the intersection of these three elements, you’ve got a solid product-market fit.

However, there are other important indicators to pay attention to along the way. In this guest post, Mixpanel categorizes “6 things about measuring product-market fit” as well as other qualitative metrics that signal product-market fit is on the right track.

Product Market Fit is an important aspect of SaaS product development. For a SaaS enterprise to be successful, nailing the crucial facets of the product-market fit is pivotal. To validate your product, you must understand if the product is a market fit or not. This guest post from SaaS Industry explains what is Product-Market Fit (PMF) and why PMF is important.

Two accounts have identical twelve-month contracts except for the payment terms, how should you calculate the payback period? Read this guest post to learn why there is a need for two metrics to exist – a cash-flow-based months-to-repay and an accrual accounting metric.

It’s become almost routine for SaaS companies to reach $1 billion in valuation and stay private for years beyond that to build more value before going public — if they even decide to go that route. These high valuations give CFOs a lot to think about. Read on to learn how as strategic partners to the C-suite, CFOs can make recommendations about the best time to raise capital, whether privately or publicly.

With software and technology becoming mission-critical for businesses throughout the economy, CEOs in every industry are recognizing that their ability to compete comes down to one thing: having the right talent.
As a result, the war for technology talent is getting fiercer and spreading to new fronts as demand for crucial roles skyrockets. In this guest post from Bain & Company how tech companies can be disrupted due to the talent war.

To successfully steer their businesses forward, CFOs need real-time information and analytics capabilities to inform overall strategy and to identify, interpret and execute in response to new opportunities and trends. Modern, cloud-based financial systems are designed to deliver these capabilities. People enter data into the system once, ensuring all users have the same, up-to-date information. This guest post from Sage Intacct explains how CFOs can be the guiding force in a digital transformation.

In this guest post, CFO Dive shares how you can manage your cash flow can have a big multiplier effect on your company valuation. Also, explain why most finance tools are not optimizing for that.

Over the past decade, software has created tremendous value for investors and businesses, thanks largely to its transformative effect on the economy, its role in developing new cloud-based business models, and its ability to increase efficiency in operations. The SaaS model allows companies to focus on new ways to create value, and since many companies are early on their journey, more gains may lie ahead. Read on to learn why companies are moving to SaaS subscription models.

Although EBITDA and FCF measure very different things and can move in opposite directions depending on companies’ responses to changing market conditions, accounting teams should be prepared to do their own calculations when trying to raise credit capital. In this article, we focus on these two terms and how they should be used carefully and in context.

The most important metric from growing companies is their ability to hit revenue growth targets to validate their current and future valuation.  While sales pipelines provide a point-in-time snapshot of deals expected to close, the revenue generated over time from these opportunities is an overlooked part of the equation. This article will explore what information your pipeline divulges and the next required step to translate that piece of your business into your value on revenue growth.

OPEXEngine joins Bain & Company, the top management consulting firm and a leading advisor to technology companies and the private equity industry globally. This partnership with Bain will help our clients extract more insight from benchmarks and take action.

Effective and strategic CFOs incorporate accurate benchmarking into the daily business of the company and especially into the budgeting and planning process. Benchmarks provide context for initial budgeting drafts and provide guide rails for managers to use in forecasting their needs for the upcoming year.

Tech debt refers to the cost of redeveloping existing products and code that would otherwise not be able to scale or evolve over time to meet shifting consumer needs. And while the concept has been around for years, for most of that time, tech debt was primarily the concern of product and engineering teams. In this guest post from Espresso Capital learn to measure tech debt and understand why it matters.

Business operates in a climate of constant change. Here’s how you can make your planning and budgeting process more Agile.

If you’ve underestimated the importance of financial operations for both the short and long-term success of your SaaS business, you’re not alone. With the explosive growth of the SaaS business model impacting businesses worldwide, many are navigating SaaS financial operations and subscription management for the first time.

These 7 best practices work for growing B2B SaaS businesses.

Flexibility and Budgeting rarely appear in the same sentence. That’s a shame as better budgeting and planning tools can bring far more flexibility into the planning, forecasting, and budgeting process. A new budgeting/planning tool should usher in a new process, new insights, and new metrics for running the firm.
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This guest post from Sage Intacct explains what an ideal new solution should help with and how to identify if your organization may need to update its budgeting and planning tool.

As companies commit to transforming their FP&A function, choosing the right focus and pace is essential. They should align with business leaders on the sources of value creation for the future, then work backward to redesign FP&A around them. And they should carefully choose their spots for investment. That will raise the odds of FP&A shifting its role from scorekeeper to a true business partner.

We invited an expert on Scaling Finance, Anup Juneja, an Expert Senior Manager at Bain & Company, for part of the SaaS Finance MeetUP. Anup works on G&A and FP&A transformation with numerous clients. He shared his perspective on the four things that world-class Finance organizations have to get right. His presentation took the traditional focus on People, Process and Systems to a far more strategic level when thinking about how SaaS and software CFOs need to frame their organizational planning for scale.

CFOs benefit from tracking and sharing customer experience and other operational key performance indicators; it can help in getting alignment on investment priorities across the organization. CFOs oversee operations or are asked to make budget decisions based on what operational metrics are showing, they can benefit from setting up these types of metrics if they don’t have them.

This is the 3rd in our 5-part series on the benefits of Software as a Service (SaaS). Our initial post offered some definitions of cloud and SaaS. Our last post explored the value of SaaS in terms of cost savings. In this post, we turn our attention to a different kind of value: innovation. By way of review: All […]

Venture debt is a specialized form of corporate credit that differs from traditional corporate lending in a number of important ways. While traditional credit is typically backed by assets or cash flow generated by a business, venture debt is used by fast-growing companies that are consuming — rather than producing — cash to support their […]

The sales strategy of “Land and Expand” is common among software companies. So common, in fact, that it might be fair to call it accepted wisdom. First land the customer, then expand them. In this guest post by Chris Mele, CEO of Software Pricing Partners, you will learn the advantages of ‘Expand and Land’ and how to integrate a strategic monetization model.

The CAC Payback Period, also known as Months to Recover Customer Acquisition Cost (CAC), measures the number of months of subscription revenue it takes to recover the costs to acquire one customer. This metric is one of the many ways to look at the capital efficiency and profitability of a SaaS business.

This time last year, we were all on our 5th, or 20th version of a 2020 operating budget/plan, working 100% remotely, and trying to forecast the rest of the year. Most companies hunkered down, shifted to fully remote sales and marketing, transferred unnecessary travel budgets into other buckets, and conservatively managed expenses.
We’ve published the latest benchmarks incorporating 2020 actuals in our platform and the results are in. Read on to learn about the changes, shifts, and trends we’ve analyzed.

In the unique world of enterprise SaaS, where the buyers are sophisticated, the sales cycle is interminable and the product is invisible, sales teams face a number of unique challenges. Read on to discover the roadblocks you face selling enterprise SaaS solutions, and how to overcome them.

Smart pricing enabled process management software provider Cherwell to get the most from its subscribers while new businesses languished. When the pandemic hit, executives at Cherwell had to focus growth on existing customers, as the mid-sized businesses it targets with its enterprise service management software would be too hunkered down to try something new. “People […]

Hiring top talent is one of the most important things you can do to help make your business successful. High-performing talent brings experience and business acumen to the table. They’re also willing to go above and beyond to succeed in their position.

Valuations of private companies are generally a mix of quantitative and qualitative analysis, including market sizing and intangibles, like management team reputation, experience, and network. ​​In this blog, we are looking at the business metrics that can be measured quantitatively and providing a few insights on how investors analyze them.

Having happy customers is critical for the success of any business, and SaaS companies are no exception. In fact, attracting, retaining, and establishing profitable long-term relationships with customers is even more important for SaaS companies because it’s the key to the recurring revenue model they’re built around.

The most sure-fire way for aspiring CFOs to attract the notice of CEOs and boards is to bring a strategic mindset, communicate well and showcase a background in operational finance, recruiters say.

High growth software companies are valued based on forward revenue multiples. But, how does the market set the multiple? What predicts the forward multiple, or correlates with it?
Tomasz Tunguz explains how to calculate and predict revenue growth, sales efficiency, and the forward multiple of a SaaS or software company.

In today’s final installment, we review the 2021 plans regarding “Hybrid & Remote Work Models for 2021,” and “Office Space Planning” from approximately 100 senior Finance executives in SaaS & cloud companies. As well as key findings from Microsoft’s Work Trend Index regarding hybrid-remote work.

In today’s installment, we review the results regarding the “Top Growth Initiatives for 2021,” “Internal Investments,” and “Strategic Finance Goals” that those surveyed are planning to make. In 2021 competition for customers, product category leadership, and acquiring new employees is expected to be fierce within the SaaS market[…]

In the first installment of this three-part series, OPEXEngine shares the results from our recent SaaS Q1 2021 CFO Pulse Survey, conducted in March. In this post, we analyze the responses to the question:
What Are the Most Significant Factors Impacting the Business Environment for Your Company in 2021[…]

In mid-June 2020, a PwC survey of 330 U.S. finance leaders found that one-third of US CFOs now expect it will take more than six months to get there. Two months earlier, just 2% of CFOs anticipated recovery would take that long. Finance leaders are in a critical position to help assess the options and […]

CFOs want FP&A to become stewards of value creation, not just to keep score. If you’re a business leader or CFO committed to future-proofing your company, we highly recommend that you read a new brief from Bain & Company, When Financial Planning and Analysis Needs an Overhaul.   To operate in the post-COVID-19 digital world, […]

Venture debt is a specialized form of corporate credit that differs from traditional corporate lending in a number of important ways. While traditional credit is typically backed by assets or cash flow generated by a business, venture debt is used by fast-growing companies that are consuming — rather than producing — cash to support their […]

By, Anna Talerico, for SaaSX My SaaS and startup DNA includes a lot of experience in running professional services organizations. But knowing how professional services revenue is valued in the market (not as much as you would think), and how hard it can be to maintain high margins, I can never recommend a SaaS launch […]

Throughout the world, businesses of every size are feeling firsthand the impacts of instability. In a time of uncertainty, surviving and thriving comes down to how promptly your business can identify disruptive changes and proactively respond to them. That’s not so easy when your business is mired in static planning—characterized by long planning cycles, immediately […]

In August 2020, Zenefits CEO Jay Fulcher posted on LinkedIn, saying, “Success takes work, study, time, grit, courage, experimentation, resilience, and a belief in yourself that may not always be steady but never goes completely away … there are no shortcuts.” Garnering nearly 1 million views, 14,000 likes, and more than 1,100 comments, his message […]

Where is the SaaS world relative to how far it can go? With valuations of as-a-service companies and all-time highs or close to it, and more and more startups leveraging this model to serve an ever-larger number of consumers, I wondered how much more business is there to capture? Let’s try to estimate. We do […]

As non-GAAP measures, they might be based on variables other companies don’t share, but they can be made more accurate, says SaaStr head Jason Lemkin. If your monthly recurring revenue (MRR) numbers don’t add up to your annual recurring revenue (ARR) when you extend them out for a year, you’re misreporting the financial health of […]

For many of us in tech, we’re going 9+ months strong working from home. We miss seeing colleagues in person, there may be distractions galore in a home office, and there’s no clear end in sight. How can leaders keep employees engaged and effective during these challenging times? To find out, we hosted a discussion […]

The SaaS market is expected to reach $164.29 billion by 2022 — which means the key innovations of this business model are about to inspire even more businesses. And with more popularity comes more confusion, especially over what metrics are most important to drive the best results. We’ve done a lot of work with B2B […]

Last week, FLG Partners, a group of experienced CFOs in the Bay Area, put on a webinar called “Pivoting to SaaS: Best Practices, Lessons Learned, and Case Examples” for traditional software and hardware companies. I participated, along with a terrific panel moderated by CFO Eric Mersch, to talk about the lessons learned over the past […]

Many founders and CEOs have seen their business plans upended by COVID-19. That’s because very few contingency plans accounted for the scale and nature of the disruption we’re all experiencing. In fact, even many of the largest and best managed public companies withdrew their guidance as the full impact of the pandemic became clear. The […]

How COVID-19 has affected Customer Acquisition Cost Calculations A good business practice every year is to review your KPI calculations and adjust for any changes. Right now, this is especially true because of all the changes every company undertook due to the pandemic,  especially moving to remote work and contactless selling to customers. This post […]

Net Dollar Retention is one of the most important metrics is a SaaS business. It measures the value of a cohort of customers over time including expansion, cross-sell, and churn (loss of revenue). But how do you measure NDR? Imagine this is your company’s data. The first column is the cohort month for each cohort […]

Customer success in SaaS is fast becoming the first line of attack to boost conversions, raise customer happiness, and reduce churn. Every day, a strong customer success strategy is becoming more and more essential for SaaS companies. So what exactly is customer success, how does it work, and are you “doing it right”? Don’t worry, we’ll explain it […]

If 2020 is remembered as the year of COVID-19, 2021 will be remembered as the year of change. Putting aside everything else that may change, let’s just focus on SaaS in 2021. Cloud and SaaS companies overall benefited from the dramatic shift to digital and remote work in the US and around the world since […]

Customer Acquisition Cost (CAC) is a key SaaS metric that accounts for how much it costs your company to procure each new customer. The received wisdom is that reducing your CAC is one of the best ways to increase your company’s profitability and likelihood of success. However, this metric calls for discerning judgment. What it […]

Each year, we do our best to provide you with valuable SaaS insights and share best practices through case studies, reports, webinars, and blog posts. We also invite other CFOs and thought leaders from the SaaS and Software industry and VC executives to share their content on our blog and provide different perspectives into financial […]

Some SaaS startups develop a form of zero-sum delusion early in their evolution, characterized by the following set of beliefs. Believing that: A customer has a fixed budget that is 100% fungible between ARR (annual revenue revenue) and services It is in the company’s best interest to turn as much of the customer’s budget as […]

Churn is the enemy of subscription-based businesses; it measures the rate at which your hard-won customers cancel their subscription to your service. Left unchecked, what seems like a relatively low customer churn rate month-on-month can quickly escalate into a crippling annual churn rate that your business can’t sustain. Fortunately, small improvements in your customer churn […]

Each class has different demand signal patterns that can help with model selection. Companies often group their demand series according to a business or organizational structure, such as a planning hierarchy or reporting hierarchy. Although this type of grouping is easy to organize and report, it is poorly suited for modeling purposes. Instead, companies should […]

With help from cloud platforms and AI-assisted technology, going back to the start each budget cycle is easier and leads to more accurate cuts. Zero-based budgeting is gaining in popularity as companies cut costs because of the pandemic, but it’s not the slash-and-burn tactic it used to be. Instead, businesses are having success applying the […]

While many of these mistakes or potential issue items are likely to be more prevalent in a business with a lean (or essentially non-existent) finance team, we’ve seen large businesses deal with many of these same challenges. Here are the top 8 mistakes I see most frequently (along with some potential fixes if you are […]

If there is one thing I have learned in my decades of building businesses, it is that KPIs are most useful if you are clear about the goal of the metric. You have to know what the KPI should be telling you in order to understand how to calculate it. If you don’t, you may […]

The COVID-19 pandemic and its impact on the broader economy have created unprecedented uncertainty for management teams and investors, while rendering many existing business plans irrelevant. This uncertainty has made it much more difficult for most businesses to accurately forecast growth, operating metrics, and liquidity. To better prepare for the future, and any challenges and […]

To outline a hands-on, effective approach to customer health scoring, Underscore VC sourced insights from the Customer Success Core. In this framework, you’ll learn how to design a scoring system that aligns to your growth strategy, brainstorm and select leader indicators of success, and operationalize the system across your startup.   After Jebbit raised its Series B, […]

If you are in SaaS you already know the days of software vendors pitching monolithic enterprise solutions to corporate executives are quickly giving way to a growth model that centers on the end-user discovering software solutions on their own. This is product-led growth, a grassroots distribution model that scales from the bottom up, instead of […]

While a handful of tech companies like Zoom and Shopify are enjoying massive gains as a result of COVID-19, that’s obviously not the case for most. Weaker demand, slower sales cycles, and customer insistence on pricing concessions and payment deferrals have conspired to cloud the outlook for many tech companies’ growth. Compounding these challenges, a […]

Instead of considering the budgeting process a rote exercise or an operational hurdle, CFOs and their companies can use it as a significant opportunity. This is now of greater importance given the impact of the COVID-19 pandemic. Those CFOs who are able to successfully transform legacy budget and planning processes can act quickly when faced with change, […]

It’s October—start of Q4 for many, or end of Q3 for some. The 2021 planning process is kicking off or already underway at most companies. Plus, most companies are currently finalizing their Q3 numbers. We took a look at a select group of SaaS companies to see how Q2 differed from Q1 2020 and any […]

Jason Purcell, Co-founder and CEO of Salsify, saw firsthand the crippling economic impacts of the 2008 Great Recession. In building Salsify, a product experience management company, he and his executive team expected another recession to occur at some point, and they knew they’d have to plan for the worst. In turn, they made contingency planning […]

From accountants to FP&A professionals, the Office of Finance is fast becoming the engine of insight in the modern enterprise. This hasn’t always been so. For years accountants were seen as “bean counters” and CFOs as gatekeepers. But that’s changing as powerful new technologies help finance teams transform corporate data into insights that help organizations […]

Net dollar retention is the most important metric in SaaS. We find that companies with great net dollar retention (100%+) grow quickly and are more cash efficient than those with mediocre or poor net dollar retention. They’re also far more attractive to acquirers and VC. Sprout Social, which provides software for managing social media and […]

There’s a lot of attention being paid to the concept of agility right now. Given the world we’re living in, that’s hardly surprising. Against a backdrop of uncertainty, agile businesses have the ability to rapidly adjust their people and processes to create more value and react quickly to changing conditions. Yet, from a finance perspective, […]

As we head into the final stretch of the year, here’s a look at some of the top operational and business trends that we are hearing about. Most SaaS and Software companies are starting to gear up for end of the year budgeting and planning exercises. Part of that exercise requires forecasting both the close of […]

Exercise one time, and you will get benefits. Exercise daily, enough to build your muscle mass, and your metabolism actually increases. Similarly, run a business change program once and you may reap short-term benefit. Do it repeatedly, with purpose, and your organization’s ongoing ability to change will jump. In today’s business environment, change is the […]

“People over 45 basically die in terms of new ideas.” said venture capitalist Vinod Khosla in 2011.  “People under 35 are the people who make change happen,” he further asserted.  Taking the exact opposite tack, in a recent CNBC interview, Alan Patricof, founder of Greycroft Partners, an elite venture capital firm, said: “academic studies show that the success rate […]

Financial modeling is like a superpower—one that lets you test your assumptions and hypotheses across dimensions, versions, and time before executing budgets and plans, but every superpower has its kryptonite. In this blog we discuss how to generate flexible and robust financial models powerful enough to drive strategic decisions and help your business leap over the competition in a single bound.

There has never been so much data and insight available around accounts and individuals that enables organizations to do all sorts of activities more effectively and efficiently than ever before. From prioritizing your target universe to knowing when buyers are in-market, who to approach and which specific messages to use when targeting, data has opened […]

It’s common to design a SaaS renewal process that starts about 90 days before the date of renewal. It’s common, but that doesn’t make it right, does it? A great, proactive SaaS renewal process really starts the day the customer signs up. And renewal is just really one huge part of the overall initiative to retain customers. Let’s start with […]

This week, the Mass Technology Leadership Council kicked off the Tech Compact for Social Justice with 60+ leading tech companies making over 180 commitments in their organizations to affect change. In Massachusetts, only 5% of tech occupation workers are African or African/American and 7% are Hispanic or Latino.  According to the Boston Globe, “the tech […]

Modern tools use integrations to eliminate rekeying data, share information across teams or departments, and gather intelligence to enable broader analysis and faster decisions. For most companies following a best-in-class technology strategy, the finance system is the hub for the other systems they use. It becomes a go-to point for making strategic decisions that affect […]

Second quarter numbers are in and results are mixed.  Overall, companies were up for first half results 2020, but second quarter was tough.   COVID impacted sales for most companies in April and May, with many companies reporting sales coming back in June. We recently fielded a quick survey of SaaS companies to help the SaaS […]

At a Glance It often seems as if traditional strategy development processes have no place in the fast-moving, always changing technology industries. But in many respects the way top tech performers define a mission, shape a portfolio and allocate resources looks a lot like what companies in more traditional industries have done for decades. The […]

Mention the words “dark data” and it immediately conjures up images of the Matrix, hackers, black hat tactics, and so on. Yet despite its cyberpunk connotations, this couldn’t be further from the truth. Dark data is an incredibly useful source of information that SaaS businesses can tap into to improve their processes. But what is […]

Every few months I take a look at the top read blog posts on OPEXEngine, to make sure I have a solid understanding of the topics that you are looking for more insight on. And month after month, I see some of the same topics come to the top of the list. As a result, […]

Here’s a shout out to Dave Kellogg’s Key SaaS Metrics podcast, recently released on Aznaur Midov’s SaaShimi series.  Dave does a terrific job explaining the current state of the art on important SaaS metrics.  The podcast is an excellent SaaS Metrics 101 listen even for experienced SaaS finance experts. Dave was most recently CEO of […]