We recently covered how to avoid the Tech Pile and the common financial pitfalls that create it. But if you’re already dealing with a Tech Pile how do you fix it? Here’s how our fractional CFO services can get you back on track.
Perform a Gap Analysis
A Gap Analysis is like when you go to see the doctor. When you step into the doctor’s office as a new patient, one of the first things that they do is a review of symptoms and a history.
Like a medical review, you can’t possibly fix the symptoms of the Tech Pile unless you know what the root causes are. You’re never going to know what the root causes are until you take a deep dive into the way the ecosystem is put together and find out:
What do you have?
How’s it working or not?
Where do you need it to be?
The Gap Analysis is important for answering those questions and gathering information so you know exactly what problem to solve.
Create the Master Plan
The next step is to create a Master Plan. You want to focus on fixing what you have currently identified as the problem but also anticipate what your growth is going to be in the future.
That way you’re planning and considering:
If I hit this revenue, what kind of things are going to start breaking?
If a process isn’t scalable what steps can I take to address it early on?
You’ll want to make sure that you’re following B2B best practices and using a proven tech stack. SaaSOptics is the best SaaS metrics tool out there and comes highly recommended.
Control Deploy Tech and Process Changes
Big bangs end up in big messes. Don’t try and fix the entire tech pile overnight. There are very few emergencies in finance that require you to drop everything and correct it immediately. Outside of an issue like missing a payroll, you generally have time to fix most issues.
It’s important to remember that the time frame for correcting issues is generally weeks to months, not months to years. If you have a proven process, it’s easy to recognize the solution, but control that deployment in phases.
Empower Internal Resources
One important step for fixing the Tech Pile is to empower internal resources. In many instances, the CFO may spend a lot of time on accounting tasks. However you really want your CFO focused on financial strategy, not being pulled into the accounting pit. So once an accounting system has been created, it is built with the following in mind:
Focused on educating and empowering the people inside the company.
Sets people up to complete tasks themselves, rather than relying on outside resources.
Targeted Limited Support
Ideally, once the above systems have been put in place you’re going to have:
Systems that are talking to each other and producing reliable data and numbers.
A CFO that’s focused on financial strategy.
Resources that handle some of the tasks that software can’t do yet. These tasks are few and far between, especially as technology evolves.
Why Fixing the Tech Pile is Crucial
One of the things that is not so obvious unless you’ve been through it, is that when problems occur it’s usually at the worst possible time. You can have a bug in your code that could go for years and it will never actually cause any problems. Or you can have some typos and some misstatements on your website that aren’t really that big of a deal, and think, “we’ll just fix that later.”
You can get away with the Tech Pile for a while too, but as soon as it starts interfering with due diligence, it’s going to put pressure on the pile and systems will fail too often when you need them most. At SaaSOptics, we call it FinOps Debt. Similar to how compound interest accrues on financial debt, the longer these systems grow haphazardly the bigger the problem becomes.
Anthony Nitsos, Founder and Fractional CFO
Anthony Nitsos elevates your financial strategy to meet challenges and drive your company value. Working with pre-seed to Series B stage SaaS startups, he ensures that founders have reliable metrics and a solid understanding of the true economics of their business to maximize valuation. He optimizes financial operations, sales operations, human resources operations, and risk management systems. He’s worked with various startups, including two unicorn exits.