The value of presenting properly cannot be understated. This is your chance to be viewed as a significant value added member of the team and demonstrate your level of expertise.
Over the years, the below practices have worked extremely well for me. In addition, my observations of other presentations where the presenter did not fare very well was due to not following one or more of these practices.
1. Know your audience
As with any presentation, this is extremely important. Your entire presentation material and presentation style depends on your audience. For instance, a presentation to the Board of Directors would be vastly different in terms of slides, detail, preparation and context than a presentation given to a large group of other finance people.
In addition, a smaller group presentation will be subject to more interactions and therefore knowing each individual attendee can be just as critical. Using the Board of Directors presentation example again; knowing each board members tendencies, mannerism (indications of silent clues of agreement or disagreement), and overall knowledge or bias on a particular topic will help make a presentation go smoothly. The key is to avoid being blindsided by an objection, question or being forced to go down an unexpected path which can abruptly turn a smooth meeting into a very contentious meeting.
2. Know the material backwards and forwards
The presenter needs fully understand the material, any numbers and all the key trends, metrics and variances vs the plan or forecast. You do not want to be just reading the information off the slide. The audience wants to know the story behind the material or numbers. You need to provide the proper narrative as to any important events/milestone and the cause of any material issues or variances (both positive and negative). Are the issues or variances one-time events or will they be recurring?
The ramifications of the issues, depending on their importance, might very well be a topic of discussion By highlighting the possible consequences of not addressing the issue, will at a minimum, ensure the issues are discussed, monitored, resolved or optimally mitigated. Given this, you should be prepared to address the issue in some detail.
One last very important point for this section, if you don’t know the answer to a question, it is better to respond ”I don’t know; let me get back to you” or “I don’t know all the nuances to provide a proper answer, so let me get back to you” than it is to respond with an answer that is not correct. An incorrect answer will cause a hit to your credibility and everything you say after that as well as before that will become subject to suspicion with regards to its accuracy. Of course, you don’t want to be using the “I don’t know” response too often as that as its own negative implications as well.
3. Have answers to questions before they are asked
During preparation of the material, you need to be able to review the slides and ask yourself what questions are likely to be asked during the presentation. This is where knowing your audience and understanding the material and numbers come into play.
By reflecting on the slides, knowing the audience and the details well enough you should be in good position to review the slides and determine what questions are obvious and as well as what questions might surface. This will put you in position to present with confidence and to respond quickly. The better you are able to do this, the higher your credibility to the audience will be.
4. Issue Handling
Undoubtedly you will be in position to have to be the messenger of bad news. Depending on the situation (e.g., presenting to the Board of Directors), it is usually very wise to provide a heads-up prior to the meeting to the board members individually. This accomplishes two things: a) nobody likes negative surprises. By providing advanced notice, it will help control emotional responses during the meeting and b) It will give each Board Member to reflect on possible solutions or provide guidance during the meeting.
While presenting bad news cannot and should not be avoided, it is far better to present the problem, but then follow-up with action plans or possible solutions to solve the problem. In other words, don’t simply announce and give the problem to the attendees. Instead, demonstrate your leadership by owning the problem, whether as a team or individually, as appropriate.
5. Practice, Practice, Practice
This presentation adage has been around for a long time, because it is so valuable. The more important the presentation, the more practice is recommended. The benefits that practice provides include:
Cutting or rearranging slides if the material does not flow smoothly or does not paint the picture you are trying to convey
Provides the opportunity to deliver the presentation until you feel comfortable with the material, script and the message so you don’t have to read the slides. You want to face the audience and talk to the slides with confidence
Allows you to time your presentation assuming there are no questions. This will give you a sense if the number of slides or talking points for each slide needs to be modified so that your presentation can be completed in the time allotted
The CFO at any company is challenging in both its depth and breadth of responsibilities. At a start-up company, the most precious resource known is CASH. For technology and many other companies, Cash tends to first be allocated to R&D as they are the creators of the product. Once the product gets ready for production, the Sales and Operations organizations begin to grow to support growth in the ultimate chase for more cash.
Having spent about 30 years in Finance with multiple of those years at start-ups including being a CFO for 5 of those years, I have always understood and agreed (but not liked) that administrative functions, especially those at a technology driven company, are the last to get funded as product development and revenue generating activities will always get the lion’s share of the budget dollars.
Given this, since the CFO is typically responsible for administrative functions, the breadth of their responsibilities is typically quite wide. Expert knowledge in Finance is obviously mandatory, but strong working knowledge in the company’s business, Human Resources and Legal is often required.
The role of the CFO
The two primary roles of any CFO are 1) to control and protect the assets of the company, and 2) accurately and report timely the results and financial position of the company. After those two objectives are satisfied the CFO typically strives to be the key business partner to the CEO by providing insightful analysis and financial perspective to various aspects of the business.
A CFO in a start-up has the added burden of needing to obtain an exceptional solid working knowledge of HR and Legal in order to satisfy the first objective of protecting the assets of the company, because they may be the very person performing the day to day tasks given that many start-up companies cannot afford a lawyer or even a part time HR employee. With the knowledge that one mistake in either the handling (or lack thereof) of a personnel issue or in a contract negotiation with a customer can be so devastating it can break a company, one can quickly understand the importance of knowing when to call “time out” in order to seek expert advice from a professional in the field, before it is too late.
The importance of knowing what you do not know
Often, the most dangerous position that anyone can be in is when they do not know what they do not know. In that state, a person is not even aware of the potential landmines that need to be avoided and therefore will not seek critical advice at the right time. By way of example, a CFO without some strong legal experience, from which to draw upon, would very likely underestimate the significance of seemingly innocuous contract boilerplate items such as “warranties and representations” or the term “best efforts” when negotiating a supply agreement with a customer. However, these two legal definitions can have such significant and expensive obligations to ensure compliance and/or onerous remedies to correct a non-compliance condition that they should be avoided at best or fully understood before proceeding. Seeking the advice of a good lawyer at this point may be warranted, but you have to at least understand the situation to realize the criticality.
Tasks are the industry standard term for activities / follow-up items that are assigned to a CRM user and it is one of the most important features of a CRM system. Tasks are “must haves” for someone using or evaluating a CRM system. If properly used, Tasks will be how salespeople and customer support people manage and complete their daily To-Do list. In addition, it is a great tool for communication between Sales, Customer Support employees and company management.
The main purpose of CRM Tasks is to facilitate and monitor items needing a follow-up at the appropriate time. Proper use of Tasks will greatly improve the value of the CRM as well as productivity of the CRM users. Listed below are some of the best practices of using Tasks.
Task critical Information
All tasks that are created in the CRM should have the following information:
Account which is linked to the Task
Title/Subject of the Task to provide a quick description
Sufficient descriptive Task body such that any CRM user can properly interpret the objective or actions of the task
Person assigned to the Task; i.e., person responsible for completing the Task
Date the Task is due for completion
Priority of the task (minimal options should be Low, Normal, High)
Task Notifications
If a user is assigned a Task, that user should be automatically notified by email to ensure the assignment was communicated in a timely manner. This capability may not be important for active users of CRM as these users should be reviewing the Tasks assigned to them on a regular basis.
Any task not been completed by its schedule completion date should be highlighted (e.g. Red Bold font) in the CRM system in some manner so that the Task assignee and their management quickly can see the situation and decide on the proper course of action. A more comprehensive system would have an Alert/Notification capability that will send an email or report to the appropriate people indicating Tasks:
That are Overdue
That have had the schedule due date modified
Tasks completed
Using Tasks
The most cost common users of are either the sales team or the customer support team. A sales representative might assign themselves a Task to follow-up with an Account by a certain date per their last communication with the Account. Similarly, a Sales Manager or the Lead Generation team might assign a Task to a sales representative, so that timely action is scheduled.
The customer support team will use a task so a representative can act immediately on a customer support ticket categorized as High Priority.
Salespeople and Customer Support personnel should be using the Task page to plan their activities for the day and the near future. The Task page should be the most viewed page by sales and customer support CRM users as it is their guide for beginning their day and checking for updated priorities during the day. If not checked frequently, a new High Priority item might not completed in a timely manner which could have significant repercussions.
Tasks should be able to be sorted by either due date or priority in order for the user to quickly determine what and when activities need to be accomplished.
Salespeople before visiting or communicating with a customer should always take a quick look at the CRM to see if there are any Customer Support Tickets open, especially Tickets with a high priority status. There are plenty of horror stories about a sales representative arriving at a customer site unaware that a major issue has been brewing. Needless to say, this is not a good situation.
Best practices are for CRM Notes and Tasks to be used in conjunction with each other. For instance, a Task may be triggered from a discussion with a customer or prospect. In this situation, the Task should reference the Note (which should have all important information regarding the discussion) so that proper context can be provided.
If you are new to CRM systems, I highly recommend that you work closely with the implementation company to make sure you understand the pros, cons and consequences of decisions regarding all the processes that need to be considered before you go-live. You can save yourself and the rest of the company at lot of frustration and false starts by leaning on the experience of others so that you can avoid common pitfalls and by reinventing the wheel.
One thing to remember is that while there are definitely wrong ways to use a CRM, there is no single right way to use a CRM. There has to be meeting of the minds where the company and the sales organization agree on the processes so the information in the CRM can be interpreted as accurately as possible. I say as accurately as possible, because unlike accounting, where an entry can be clearly determined just by looking at the debits and credits, information in the CRM will be subject to every user’s interpretation. For instance one salesperson’s view of the status of a particular account could very well be different than the status of a different salesperson’s view if the exact same situation and set of facts existed for that salesperson. To add to the complexity, each reviewer’s interpretation of any notes in the CRM could very well be different than other reviewer’s interpretation.
One of the most important processes that needs be finalized is defining the sales cycle that will be used by every CRM user. The objective of clearly defining the stages is to make sure that all salespeople understand what the various stages mean and how management will interpret each stage. With this knowledge, the salespeople can categorize each account appropriately and therefore communicate the account’s progress in the sales cycle in accordance with the company’s agreed upon definitions.
Sales Cycle Stages
With specific regards to sales cycles, it is important to define the stages in the CRM so that the stages are not too few nor too many as each condition has its own set of problems.
Too few stages will result in information that is not all that useful
Not enough information to obtain a good sense of the progress, or lack thereof, for a particular deal. For example, by taking this to the extreme, a sales cycle in the CRM could be as simple as 1) Contacted Prospect and 2) Won/Lost illustrates this point rather nicely. Someone reviewing the account stage would not be able to get a good feel for how the deal was progressing as there are not enough stages to discern anything other than the opportunity is either open or closed.
Too many stages: Are the costs worth the information and how accurate will the information be?
Will bog down the salesperson by increasing the number of times the salesperson will be forced to update the stage in the CRM; hint: salespeople hate bureaucracy.
The delineation between the different stages could very well be subject to a large amount of interpretation by each salesperson as they try to classify each account’s proper stage.
Now to really throw a wrench into the whole discussion, many people use two sales cycles. Depending on your particular situation, this might very well be best practices. To clarify the two stages:
Initial Sales Cycle: This includes the stages required to get the account into a position where it has a reasonable chance to close. An example is:
Lead: Have very little information on account (perhaps purchased a list of companies); Need to do some research.
Qualifying: Have basic information, but lack enough information to determine if the account is worth pursuing; i.e. is it a fit for our product/services, but do they have enough budget?
Development: Solid account to target, but they are not quite ready to make a purchase decision within the next 6 months.
Working: Solid account to target and they are ready to make a purchase decision within the next 6 months
Opportunity: Ready to make a purchase decision with the next 3 months.
Subsequent Sales Cycle: Once the account has become an Opportunity in the first sales cycle, this sales cycle defines the stages to close the deal as a win, a loss or a no decision. An example is:
Discovery: meeting to understand the requirements of the account
First Demo
Second Demo
Checking References
Win, Lose, No Decision
It is best practices to assign all accounts that have reached the second sales cycle to not only assign a stage to the Opportunity, but also to input into the CRM at least the dollar value, the percent probability to win the deal and the time frame for the decision.
Management Review
Closing note; one of the toughest parts, but a critical key in properly interpreting the CRM information is to know the tendencies of each salesperson. For example, one particular salesperson will be very reluctant to put a high win probability on a deal, for fear of disappointing management while another salesperson may always be overly optimistic. In addition, the notes they enter into the CRM may reflect their conservative or optimistic tendencies. In any case, you will most likely need to adjust your analysis of the raw data based on the person who input the information to properly interpret the situation.
One approach that some companies use to help mitigate individual bias or tendencies is to assign a fixed probability to each sales cycle stage. For instance, a prospect that likes the first demo could be assigned a 10% win probability. If they make the shortlist of vendors, then it the probability will be increased to 30% and so on. I personally do not particularly like this approach as there are too many nuances to each deal including how many short listed vendors were selected or does a key decision maker have a pre-disposed bias to your or one of your competitors product.
Recently I was walking through a warehouse with the owner of a small distributor, when one of his employees brought him a widget that had been damaged by a forklift. The owner told him to trash the widget, and tell accounting to write it off; the value of this widget, $170. This got me thinking, “are they aware of the cost to replace this widget?”
Later, I asked the warehouse person how much they would need in sales to replace this widget; he said $170. Well, not exactly, let me explain.
In order to replace the cost of the damaged widget, the money must come from the margin of future sales. This company earns a 2% margin for this widget, so they must sell 50 widgets, just to pay for the widget that was damaged! That is $8,500 in additional sales!
$170/.02 = $8,500 in new sales needed to replace damaged widget
$8,500/$170 = 50 widgets
This example doesn’t take into account carrying costs; if carrying costs were 30%, the replacement cost would be $11,050!
This chart illustrates additional sales required to make up for lost/stolen/damaged inventory:
Gross Margin
Item Value
2%
3%
4%
5%
6%
$25
$1,250
$833
625
$500
$417
$50
$2,500
$1,667
$1,250
$1,000
$833
$100
$5,000
$3,333
$2,500
$2,000
$1,667
$200
$1,0000
$6,667
$5,000
$4,000
$3,333
$500
$2,5000
$1,6667
$12,500
$10,000
$8,333
$1,000
$50,000
$33,333
$25,000
$20,0000
$16,667
Again, to breakeven on lost, damaged or stolen inventory, the replacement cost comes from future profits! How much harder must your sales team work to make up for damaged, lost or stolen inventory?
These little inventory costs that occur daily and weekly add up over time, and at the end of the year, these “little” costs can have a substantial effect on the bottom line. Therefore, it is important for employees to understand costs associated with inventory, and the impact it has on the company’s financials.
One of the most important benefits of ERP systems vs off-the-shelf accounting packages is that information becomes available and leveraged across the enterprise as opposed to being stored in in stand-alone applications and made available only to a select few employees having access to the silo application. This benefit of shared/leveraged information is realized whether all the information resides in the ERP (e.g., informing the A/R department that a customer can be invoiced, because all product ordered has been shipped by manufacturing) or if the information resides in multiple applications that are effectively and efficiently integrated.
Integrations will be effective and efficient if the integration provides information in a timely manner and allows the user to use the application of their choice. For example, if a sales person uses the CRM system as their key tool, all the information they need to do their job should be viewable in the CRM application. Requiring a salesperson to log into the ERP system to view the information is by definition inefficient, will lead to frustration and will result in additional licensing costs for the ERP system.
The below narrative focuses on the benefits of having the ERP system integrated with the company’s Customer Relationship Management (CRM) system and with the Product Lifecycle Management (PLM) application.
ERP / CRM integration
The benefits of this integration are quite extensive, but a top level summary of the benefits include providing information or process improvements to Sales and Customer Support teams as listed below:
Sales Team
Orders not yet shipped by customer
Unpaid invoices by customer
Product and Pricing
Previous purchases by customer
Customer Support Tickets; opened and closed
Quote to Order Automation
Automation of adding a new customer to the ERP system
The above benefits can and usually do have a significant positive impact on the company’s Sales, Operations and Finance departments. By way of example:
Sales rep phone calls into Operations to see if a customer order has shipped will be reduced/eliminated.
Providing timely and accurate quotes as well as the ability to provide quick answers to customer questions regarding previous orders will increase customer satisfaction.
Automating both sales order entry and adding a new customer (with controls by Finance; i.e. new customers are given a status of “On-Hold” until approved by Finance) into the ERP system, will reduce errors and eliminate duplicate data entry.
The avoidance of walking into a customer and being surprised by a very unhappy customer, because the sales rep was not aware of a Customer Support ticket that has not been resolved.
Customer Support Team
Warranty information by serial number
Visibility into the customer’s installed product configurations
The visibility to the above information will:
Reduce warranty costs, because warranty validation is available to all customer support reps thereby eliminating providing free product/services to products no longer covered by an active warranty.
Customer Support reps will be able to increase customer satisfaction, because the customer’s installed product and configurations can be viewed while the rep is talking with the customer.
ERP / PLM Integration
The engineering department typically controls the Bill of Materials (BOM) for products the company manufactures by recording, tracking and releasing Engineering Change Orders (ECO) to existing BOMS and to enter BOMs for new products. If the engineers use the functionality embedded in the ERP system then this information is available immediately to all users of the ERP system. In addition, the engineers will have access to all the relevant information that is already stored in the ERP system to enable them to complete their tasks efficiently and cost effectively.
However, if an external PLM system is used without solid integration between the ERP and the PLM, this can lead to many inefficiencies and cost issues that could have been avoided had an integration existed.
The key benefits of having bi-directional integration between the ERP and PLM systems include:
Engineering: providing the Engineering department with information regarding product costs, inventory levels and open purchase orders. This will enable Engineering to:
Design new products or redesign existing products with complete visibility to costing information for the parts used; i.e., design lower cost products
Analyze existing inventory levels and purchase orders already placed so that a release or cut-over to a new design can be determined with proper consideration of potential inventory write-offs due to obsolescence or excess inventory
Purchasing: By providing the ERP system with approved ECOs and new product design BOMs, the Purchasing department will be in position to modify their inventory purchases to account for the change in the BOM. In fact, the ERP system itself should be able to provide a purchasing employee with a warning if they are entering a purchase order for an inventory part that has a ECO that has been approved.
These two examples serve to highlight the power and the importance of solid integrations between applications where the information in one of the applications is important to users of another application.