When fundraising, investors will want to know certain key trajectory measures unique to SaaS companies. Key performance indicators (KPIs) are defined as the quantifiable measures used to determine how well a SaaS or recurring revenue organisation meets its operational and strategic goals. Too often SaaS finance leaders don’t look at KPIs through the same lens as the investors.
CEOs, CFOs, and executives who look at KPIs to answer the question “how did we do?” need to ask “how will we do?” instead. Rather than a rear-mirror view of performance, the right batch of KPIs can help SaaS providers predict business success, reveal the challenges ahead, and help data-driven technology organisations gain real competitive advantages to win their market. Predictive KPIs help executives lead the organisation rather than just react, shifting the focus from short-term objectives to longer-term visions. Instead of numbers to hit, these KPIs can help steer towards massive growth.
First, we suggest starting by identifying a value outcome – your organisation’s guiding north star. For public companies, it may be driving shareholder value. Secondly, identify the strategic drivers, then identify the tactical drivers. Lastly, map financial and operational metrics to the tactical drivers.
Start by pulling in organisational leadership and focus on what to measure rather than how. Then by building your FinOps tech stack with a modern financial management system as the foundation, you can automate KPIs and update these in real time. This gives you the ability to create reports and dashboards that automatically combine operating dimensions with financial data so you can analyse KPIs for each product offering, operating entity, location, region and other units.
The eBook from Sage Intacct, Predictive KPIs, lists more than two dozen examples of KPIs to help finance leaders get started with finding the best KPIs to help predict and plan for growth.
The Akuna Solutions Team