During times of economic uncertainty, Chief Financial Officers (CFOs) rise to prominence in organizations as additional scrutiny is placed on both the top and bottom lines. However, according to ServiceMax CFO, Simon Edwards, the role is also adapting to include a broader scope - one whereby finance chiefs are central to both product strategy and ensuring that customers are getting value from an organization’s products and services.
I think about three and a half years ago, and I was responsible for FP&A and accounting, kind of the core nuts and bolts. Fast forward to today, now I own everything from IT and cyber through to corporate development and business operations.
I think really, the way we talk about it within ServiceMax is, the numbers are really a backward looking output. Running the business operations team and working cross functionally, to influence the financials over a longer period of time, I think is really important.
It's really connecting the dots between: wWhat do we need people to do? What are they working on? Where is innovation and value being created within the organization that we can further invest in? And then ultimately tying that back to our long term operating model.
So I think my role has evolved more into being that kind of operating business partner with my peers and the organization, and more so than just running the scorecard as it were.
ServiceMax has been through a number of iterations in recent years. It was spun out of GE more than two years ago and has been rapidly developing its cloud-based field service products, including the launch of Asset360 in partnership with Salesforce. The company saw significant gains during the COVID-19 pandemic too, as the role of field service technicians became even more critical, and companies realized that they hadn’t been investing in their digital capabilities at the same pace as office workers.
ServiceMax had also planned to go public via a $1.4 billion SPAC deal, in partnership with Pathfinder Acquisition - but this got spiked at the end of 2021 due to “unfavourable market conditions’. However, Edwards says that ServiceMax is less concerned with its ownership model than it is about focusing on product and delivering on its strategy for field service. He explains:
Post GE, our strategy is really unchanged. There was a SPAC that was announced, but these things just enabled and further reinforced our underpinning strategy. Number one, we think that the market is growing. Number two, we think we're really well positioned to capture that and kind of support customers through that journey. And then number three, we're profitable.
We've always been on this trajectory to think about, how are we continuing to drive efficiency within the business; continuing to grow our operating margins;and then thinking about how we invest that capital. Whether that's through inorganic, organic, or returning to shareholders, I think that that really is unchanged through all of this.
It's really about continuing to accelerate and think through solving problems for customers. We're less focused on ownership structure and more about where we are investing and how we are enabling that additional value to be unlocked in the business for our customers.
Prioritizing product development
Edwards explains that even though organizations the world offer are trying to navigate an extremely volatile macroeconomic environment - with everything from geopolitical tensions, to inflationary pressures and supply chain shortages - ServiceMax is not in the business of reacting to these types of shocks to the system. Instead, Edwards adds, the company is laser focused on making sure that the underpinnings of its business model are sound and that it executes on the things that it can control. He adds:
So, that’s our customers, our employees, and a focus on operational excellence. If we look at our business today, we are a profitable business, which in the SaaS space is somewhat rare, but I think for us that hasn't come about through just near term restructuring. It's really come about as a function of this journey we've been on for the past four years.
When you think about what ServiceMax ultimately enables for our customers, It's actually the ability for them to build their own recurring revenue streams in the form of spare parts and maintenance of the equipment in the field. That's ultimately why we think we've seen this acceleration of growth for the past few years.
ServiceMax is particularly focused on what he calls a ‘customer obsession’, Edwards continues, whereby the end goal is ensuring that customers are getting the value that he needs. He explains:
There’s that old SaaS adage where it costs more to acquire a customer than it does to retain one. So we're very focused on ensuring the success of our existing customers. We spend a lot of time investing in ensuring that all of our customers' implementations work, are efficient, and enable them to scale over time.
We've constantly been beating our NPS score, they’re the highest in the company history - the CSAT scores are also the highest we've ever documented. For us, first and foremost, it's investing in ensuring that our existing customers are maximising the value that they get from what they've already purchased.
Second to this, ServiceMax is steadfastly focused on its product development. He says that when the COVID-19 pandemic hit a lot of companies sought to restructure their employees in an attempt to cut costs - but this isn’t something that ServiceMax thought would result in long term success. He says:
We knew that we had dedicated employees who were committed to our existing customers.
Instead, ServiceMax pointed its employees to ramping up the product, given the success it has seen in the market since the onset of the global health crisis. Edwards adds:
We started investing in new features and new products to bring to market. We’ve constantly been thinking about our innovation flywheel. And so again, as you think about those investment priorities, it's ensuring our existing customers are getting value and then ensuring we're constantly finding new ways we can grow our share of wallet with those customers and deliver additional value to them.
But this isn’t just about ensuring existing customers are getting the value that they need, it’s about ServiceMax ensuring it continues to acquire new customers in an efficient way, Edwards says. The future for the company lies in what it is able to do with the data it has acquired over the past decade - and according to Edwards, that’s how we should be thinking about ServiceMax’s strategy. He says:
I think an output from all of this is now we have these huge data repositories that are also context rich, as opposed to just throwing everything in a data lake and saying that you are cloud enabled.
When we look at our ServiceMax repository, we have this huge history of all this equipment and an understanding of what's happened to it in the field. What does that mean in terms of being able to predict future outages?
And so now our customers are thinking about how they harness that data to, again, create more revenue and create more value for their end users. And I think that's the next wave of this transformation. It ties back to how you can constantly try and extract more and more value from a lot of the investments that the companies have made over the past decade.
A key piece of advice from Edwards that most companies should be thinking about when faced with macro headwinds and consistent disruption - take note and be agile, but don’t abandon your strategy if it’s proving successful. Focus on customers, focus on employees, and think about where the value is coming from.