Software as a Service (SaaS) and subscription-based company Leaders need to measure many robust metrics to understand the health of their business. Without a holistic view of each customer relationship and the ability to differentiate committed monthly recurring revenue (CMRR) and other levers that affect top-line revenue, business leaders are in the dark about what actions to take to grow revenue most effectively.
Outcome metrics are powerful, essential tools for demonstrating accountability and transparency. They can measure financial or non-financial criteria that reflect an organisation’s, program’s, or initiative’s efficacy. They’re derived by carefully defining outcome indicators, data-collection methods, analytical techniques, and presentation vehicles that collectively show a rich picture of organisational performance.
These outcome metrics may go by many names and fit in countless categories. Many nonprofits obtain their best results by measuring across multiple dimensions for blended scorecards that encompass activities, capacities, financial results, and other metrics. Ultimately, well-defined outcome measures help organisations to continuously adapt and improve.
The importance of outcome measures can be seen from a variety of perspectives and functions within the nonprofit organisation. These include:
Funding: In a competitive environment, the ability to define, measure, monitor, and report the metrics that define success can encourage new and additional funding from donors, foundations, and other benefactors.
For instance, demonstrating achievement of key milestones can unlock subsequent rounds of multi-year grants.
Accountability: Funders are increasingly tying their support to stringent accountability. They want to see where their monies are going and the results that are achieved whether it’s organisational growth and new locations or more nonprofit partnerships and matching funds. Nonprofits must provide exceptional transparency into the organisation’s outcome metrics, controls, and reporting.
Stewardship: From development and accounting to operations and programming, the ability to define, track, and report outcome measures—showing where you are and where you want to go—will help ensure good stewardship. This, in turn, will boost donor confidence and strengthen your credibility—which supports your growth and your ability to pursue your mission.
Outcome metrics include all measures that reflect organisational performance and impact.
These can include performance (e.g., program efficiency), outcomes (e.g. meals served), capacity (e.g., membership growth), financial (e.g., budget to actual), or sustainability (e.g. operating reliance). If you report solely financial-based metrics, your potential funders won’t know whether you are successful in your mission and in meeting your stated goals. Consider: Your programs and activities can grow and be hugely successful, but without organisational capacity and sustainability, the programs—and their impact—will come to an end. Define key indicators across the spectrum to ensure that you are getting—and giving—a complete picture to key stakeholders, staff, and constituents. Your website is a great way to communicate that focus, and to ensure that both internal and external constituents have access to the information. The key is to balance financial-and performance-based outcome measures.
“Going in front of the Executive Team to present these metrics is spurring conversations about where to focus our efforts. Having these insights that are actionable and strategic come out of the finance department is really cool.” ~ Sam Robertson, Corporate Controller, Quest Analytics
Sage Intacct provides a single source of truth for your entire customer lifecycle. Salesforce, Salesforce CPQ, and your financials are always in sync from the initial sale to addons, downsells, and renewals. The SaaS metrics available on SaaS Intelligence—MRR, churn, renewal, CAC, and more—are automatically calculated in real-time as sales transactions occur, saving time and eliminating errors. You can skip those all-nighters building your reports in spreadsheets for executive, board, and investor meetings.
With a click of the mouse, you see all of your SaaS metrics on a single, visual dashboard with performance cards, reports, charts, and graphs. Dashboards provide real-time visibility into data. They enable you to monitor and proactively manage outcomes. You capture your unique outcomes with SaaS metrics tailored to your business processes. Program managers may look at metrics related to programs, locations, and budgets; grant managers may monitor grant renewals, new awards, and funding pipelines. Trends, benchmark comparisons, and drilldowns to source data allow you to provide instant, actionable insights to your key stakeholders. You become a valued partner by enabling the business to make agile, well-informed decisions.
Regardless of your company stage, Sage Intacct helps you measure and monitor the metrics that matter to you and your investors:
• In the early stage, you need to prove your revenue model with metrics such as CLTV and CAC.
• During your growth stage, you need to show your recurring revenue model is working with net change in CMRR, upsells, renewals, revenue churn, customer churn, and more.
• In the late stage, you need to demonstrate you’re running a profitable business with metrics such as gross margin.
As you pursue a strategy based on outcome metrics, consider your financial management solution and how it can simplify the process. A modern, fund accounting solution will automatically tag and track your data by key dimensions—giving you instant visibility and insights so you can proactively manage locations, programs, members, and funds. The right system can provide access to statistical data that enables you to automatically calculate key metrics such as financial (revenue), statistical (membership), or a combination (donations per attendee).