Fractional Futures

Unlocking the Power of Digital Transformation

• Paul Mills • Season 3 • Episode 7

Share episode

Send us a text

Fractional Futures is the essential podcast for CEOs, investors, and senior marketing executives looking to unlock the power of fractional marketing leadership.
 
Hosted by Paul Mills, Founder at VCMO, and with special guests, we'll share expert insights, provide actionable strategies and explore real-world success stories to help you leverage fractional marketing leadership for maximum impact.

In this episode

In this episode of Fractional Futures, Paul Mills and Rob Nicholls discuss the critical importance of digital transformation for businesses today. They explore the challenges and opportunities that come with adopting digital-first strategies, the necessity of aligning technology with business goals, and the importance of integrating systems for better decision-making. The conversation also highlights the role of personal branding in driving revenue and the need for businesses to focus on customer satisfaction as a key marketing strategy.

Special Guest

Rob Nicholls, Founder Rob Nicholls Consulting, CFO, Board Advisor and Angel Investor

Key Takeaways

  • Digital transformation is essential for modern business success.
  • Many SMEs struggle with digital adoption due to cost and complexity.
  • CFOs and CMOs must align on digital strategies for effective implementation.
  • Integration of technology systems is crucial for operational efficiency.
  • Employee turnover can disrupt technology adoption and usage.
  • Investments in technology should be tied to clear business outcomes.
  • A strong digital presence is necessary to attract and retain customers.
  • Building a personal brand can generate revenue opportunities.
  • Startups should prioritize client building over tech stack perfection.
  • Customer satisfaction is the best form of marketing.

Sound Bites

"Digital transformation is no longer optional."

"Data-led decision-making is often lacking."

"Digital presence is essential for relevance."

Contact VCMO

Thanks for listening & keep podcasting!

Fractional Marketing Leadership | Marketing Transformed.

Paul Mills (00:01.534)
Hello and welcome to another episode of Fractional Futures, where we're exploring how fractional CMOs can help SMEs and portfolio companies accelerate growth and maximize enterprise value. Today, we're diving into one of the biggest drivers of business success, and that's digital transformation. Now, digital first strategies, marketing technology and e-commerce are reshaping how businesses operate and grow. But while digital presents massive opportunities,

It also comes with its challenges from investment decisions to execution risks. In this episode, we'll be exploring how companies can harness the power of digital transformation to scale more efficiently, maximize ROI and future proof their business. Joining me is Rob Nicholls, a strategic CFO, non-executive director and board advisor with over 35 years of global finance experience. Rob specializes in profit maximization and value creation.

And today he'll be sharing his insights on how CFOs and CMOs can align on digital strategies. Hi Rob, how are you?

Rob Nicholls (01:06.222)
Good morning, not too bad at all, Paul, good to see you again.

Paul Mills (01:09.254)
Are you teeing yourself up for the golf later?

Rob Nicholls (01:12.129)
I am, I've got a one o'clock tea time, so we need to get on with it today.

Paul Mills (01:15.056)
Absolutely. Well, that's probably a good prompt to get started then. this first, the first topic I want to talk about is adopting a digital first strategy. Digital transformation is no longer optional. It's one of the foundations of modern business success and companies that embrace digital first strategies can generally drive greater efficiency, increase market reach and improve customer engagement.

But while the benefits are clear, many businesses still struggle to make the shift effectively. So Rob, many SMEs, portfolio companies, they are still hesitant to go fully digital. Often this might be due to concerns over costs, complexity, or internal capability gaps. So from your CFO perspective, what are the financial and strategic advantages of adopting a digital first strategy? And how can businesses overcome these barriers?

Rob Nicholls (02:10.414)
Look, I think it's a very good question. There's an inflection point within many businesses. There's the sort of under 25 million turnover, 25 to 30 million turnover and above, which I think a digital adoption strategy has largely been put in place over the last several years. So I think we're talking here about smaller business where the biggest constraint clearly is the board, the CFO and the CEO recognizing that there's value in the investment.

So I think it's those under 25 million pound turnover businesses that we're really focused on here, which has got perhaps the biggest opportunity, but they've also probably got the biggest hurdle to get over in terms of adopting a strategy or at least approving a strategy, creating a strategy, approving it, and then implementing a strategy. And most of my clients are in that world, that under 25 to $30 million million pound turnover business world. And they all struggle with

digital adoption, a digital strategy. There's often no clear person that owns the overall digital strategy. It's certainly not the CEO. It's generally not one of the other players on the senior leadership team. And so what tends to happen quite often, the digital strategy is not owned by the senior marketing or salesperson. It's someone like myself as the CFO. And I do do that for one of my clients that I kind of oversee the digital strategy.

And that's not an easy job for someone who's not a technically capable person. It's just that's fallen under my remit. Most of these businesses don't have a CTO or a CIO. So we do struggle here a little bit with knowledge base. So I often contract that out to a fractional person to help us develop the strategy, if you will. The second issue is around cost and around the investment. It's more of a struggle to put into place a couple of million pounds

System development or even a couple of hundred thousand system development in the business that's turning over five, eight, twelve million pound turnover. It's it's a real struggle You know, there are ways to do it through leasing and through putting stuff in the cloud You don't have to put stuff on your own servers in a day But there is a big hurdle here and it's generally cost it's generally the cost that isn't going to get approved by the CFO or the CEO because these systems are

Rob Nicholls (04:34.222)
often really rather expensive. I was just dealing with a guy yesterday who is a tech stack consultant, but generally dealing with businesses over 25 million pounds turnover. most of these systems that have been implemented over time, whether it's ERP, finance systems, CMS, CRM systems, the problem is they don't talk to each other. There's been very little backend integration.

They've adopted the new shiny toy when that was the right thing a couple of years ago to do CRM. They're on Xero. That doesn't talk to an ERP system. They're just not really very well connected. And so you've got this investment that's gone on, but they're really, the integration is not there. So these tech stacks that have been developed over time, cost an inordinate amount of money. been, it's flowed through the P and L or you capitalized it if you've gone out and done a bespoke system.

And I had a client last year in the build environment that invested somewhere in the region about 250,000 to develop a of all seeing, all dancing CRM and ERP system. And they basically junked it after about 18 months of development work and wrote off about quarter of a million pounds. And they're basically starting from scratch again. And there's so many instances like that and marketing oftentimes is involved in that as well.

There's lots of off the shelf systems you can buy, whether it's Pipe Drive, Zoho, HubSpot is my favorite, Salesforce is my biggest favorite because it's inordinately expensive and clunky, but you've got to have something. You've got to have something as an investment in your business. if there are lots of businesses that are still running on a couple of Excel spreadsheets, unfortunately, in this day and age, it's quite remarkable, but it often comes down to cost.

And it comes down to cost, particularly if your marketing manager is convincing the CEO and the CFO that this investment is going to last us long time. It's going to gain revenue opportunities. It's going to help our customer journey. It's going to help onboard customers. It's going to retain them for a longer period of time. They'll be easier to maintain and lift pricing over time. You I need a system that I can see the pricing that we've charged in the past. can see.

Rob Nicholls (06:58.028)
the margins on those customers, I can see what pricing we need to develop over time. And most of our systems these days that I see don't do that readily. And that's unfortunate.

Paul Mills (07:10.206)
Yeah, I think, if I can add on to that, think digital transformation, it's a competitive advantage. It's not just a necessity, especially in today's digital world. And you mentioned there, Rob, about those stories where they spent a lot of time, effort and energy getting this stack together, whatever system it is, then having to go back and start from square one again.

It's really, I think that the real bit, the real issue here is that you've got people choosing technology that is wrong for the business context. And a part of it is about people and processes. lot of companies, they probably haven't got a very well-defined process in the first place. They buy the tech, they use the techs.

process, which is probably different to what the business operates under. So they've kind of got two sets of processes they're trying to align. You start falling into bear pits then and people get frustrated. makes it clunky, makes it hard to get data out. It makes it hard to make accurate decisions or investment decisions. It all falls to pieces. And I think the other point as well is the digital investment it has to be tied to business goals, not just trends. You shouldn't just buy

Salesforce because you know your competitors are using it. You you might be just as better off using a Zoho system or a pipe drive or something else, HubSpot. And I think too many businesses, they hesitate to go digital because they don't see that clear path to ROI. And I guess to gain executive buy-in, marketing leaders especially, they have to link digital initiatives to...

to concrete business outcomes such as increased revenue, improved customer experience and cost efficiencies. And I think that sometimes gets forgotten. It's about getting the system in, getting it set up, getting people using it and that's it, it's done. But it's not, has to go further.

Rob Nicholls (09:09.23)
I think one of the issues we're wrestling with here is that employee turnover, staff turnover is such and it's in certain roles like sales and marketing. The turnover is really quite frequent. You're talking 15, 18, 24 months perhaps. So if you were a Salesforce proponent and someone else comes in and they've only ever used HubSpot, they're going to want to wrench out the previous incumbent system and they'll say, well, look, we need to go to HubSpot. But equally HubSpot can very quickly get.

You're talking 1200, 1500, 1600 pounds a month kind of thing quite often. And oftentimes that system isn't being utilized at capacity. Not everyone in the organization is using it. Not everyone's driving reports out of it. So you've got that kind of frequent turnover. Oh, we were using Salesforce. We're bringing in, know, it's not dissimilar with finance. I had a client that was on Xero. They wrenched that out and put in a Sage system, realized that that was frankly rubbish.

And now we're in the process of unpicking all that and putting Xero back in again. So it's not incumbent just to marketing. Finance people do this as well. And oftentimes it's tied to the incumbent in the role. So as you turn over or I turn over, I have a predilection to a certain system. That's just the way of the world, unfortunately. And the new shiny object, new shiny toy kind of syndrome comes in here as well. I worked with a client a year or two ago.

that literally had to have every new application as it came out. So, you know, one minute they were using Asana, next minute they were using Monday, then they were on Slack, then they were on HubSpot. And it's like, and all these systems weren't really integrated, they were just implemented. So, you know, it's the age old issue we're dealing with here, I think.

Paul Mills (10:55.752)
And that's probably a perfect segue into the next topic, which is how do you choose the right system for what the business needs? And I think certainly with the explosion of marketing technology and, and the dare I say AI, businesses have now got a much, they've got access to more powerful tools, which, you know, can automate processes, enhance data-driven decision-making, improve marketing performance, things like that.

With so many tools available, how do you choose the right one? So Rob, I guess with your financial leadership perspective, how should a business evaluate MarTech investments? Because it can be quite expensive. A new content management system, a new CRM, a new something can be big digit numbers. So what are the key factors that a CFO and a CMO should consider when deciding which tools provide real value versus those that are just nice to have?

Rob Nicholls (11:49.301)
I mean, I'm not totally versed on the way this is done in every organization, but I know the way I prefer to look at it. I prefer to look at it at a competitive, know, checkbox, tick, cross. What attributes does the product or service offer? And I always do all the distributions. Like, okay, don't want the cheapest. I don't want the most expensive. I want the one in the middle that has the best bang for buck in terms of valuation for tools.

But I also need to recognize the culture of the organization. Are we adept at using technology? In which case, that's fine. If we're not, and I work with one client who's a chartered surveyor, they don't really have the time to sit at their desk for six hours a day working with the system. They have to have a relatively simple system that just does the job. And so for them, the lower cost solution is probably better

than perhaps a more technically capable IT technology business that might realize that the attributes of something like a sales force and the depth of reporting, and I think reporting is a key attribute here. Most systems have decent reporting systems, Xero for one on the finance side, in my opinion, doesn't have a very good reporting system, and yet it is the most popular system. There are lots of add-ons and extensions you can get

but it really is bespoke to the system, the way the system is used and who's using it, if you will. So I think there's, I mean, I'm a big proponent of HubSpot on the marketing side because there are a lot of tie-ins, a lot of APIs, a lot of integrations with other applications. And for me, that's a good determinant, if you will. The more add-ons, the more extensions, the more APIs that you can integrate with other incumbent systems, the better.

some of the worst ones, I think, are some of the most expensive systems, whether that's a Salesforce or service. Now, there's a lot of them out there that are very expensive, but have limited connections and integration with other tech stack. And I think that's one of the bigger issues we're dealing with here is the lack of integration within the tech stack in any organization, whether you're a million pound turnover business or a 50 million pound turnover business.

Rob Nicholls (14:11.978)
Most of the systems that they've got in company in each of those types of organizations don't really integrate and talk to each other. So I think that's a big criteria is how does it integrate with your ERP system, your customer facing customer journey CRM system or CMS system? How does it integrate with the finance system? That's probably one of the most critical and an awful lot of organizations, their systems do not integrate with

Xero or QuickBooks or even Sage. that's, that's even In this day and age, it shouldn't be the case. But there's an awful lot of, of, of organizations that are running with systems that were implemented three, five, eight, 12 years ago, that are simply standalone systems. And they're not integrated. So I think that's a big criteria. Cost is clearly one of them. But I think the, the way that the

the system or the application integrates with other is probably an unseen cost because if they don't integrate and they don't talk to each other, you're going to have problems down the line. And equally from a valuation perspective, any acquirer, any P firm, venture capital firm that's looking to put their capital into a business, they're going to look at the tech stack and they're going to have preferred systems and applications. Their CIOs and the CTOs that they work with are going to have

preferences. So if you're not utilizing those preferred solutions, you'll often find that, you know, if you're not running a CRM system, or if you're running Salesforce, they'll have a preferred solution that they'll just rip out your existing system and put in their portfolio preferred solution, if you will. nothing is forever. Although some businesses are still running on, you know, finance systems from the 1990s, if you will, because cost is a huge factor.

but also personal preference, I think is a big factor too. But I would say cost and integration and integration of the tax tax. The two bigger issues that I look at, I go into many of these businesses and they either have literally just half, three or four systems or the half dozen systems or more they have just don't talk to each other. And that's a big issue.

Paul Mills (16:30.512)
I think you're absolutely right. I've been in several organizations where I guess the data lake just doesn't work. There's lots of data in it and you can't fish it out. And you sort of think, actually in today's modern era with technology and APIs, AI, everything should be easy to get out.

I still know large organizations that still have one of their biggest business weaknesses as an organization is getting data and extracting it from their systems. And I think really when choosing any tech for the organization, whether it's a CRM, CMS, integrations with the various financial apps, it's really, is it easier to get information out?

Rob Nicholls (16:59.022)
Yeah

Paul Mills (17:18.222)
that for me is one of the first things. Is it easy to put information in? Is it easy to get it out and interpret it from which you can then make an intelligent investment decision for the business? And I think the other thing as well is that the integration, if the systems don't integrate,

there becomes quite a lot of manual processing that needs to happen. You get fatigued, you get manual fatigue, trying to manipulate the data that comes out maybe half-baked and you've got to spend a lot of time and human hours trying to assess it and analyze it and then try and make something out of it, which probably doesn't exist. I think the other issue as well is...

A lot of these technologies, all these applications, they are built by manufacturers that have kind of defined what the perfect process should be. And that process should fit any organization with your product led organization, a service led organization, regardless of sector. And often what happens is the process within the CRM or the CMS doesn't actually reflect the reality of how the business operates.

So two things change and invariably it's the system, it's the new tech that changes, not the business. And I always advocate before making any investment decision in a new tech, let's map out how the business operates. Can we find efficiencies in the business or can we adjust the way we operate the business to might kind of reflect how the new tech works and operates? Because if you can adjust that first, the implementation is going to be a damn slight easier. You'll get less.

tech fatigue, you'll get more uptake in usability and you get the information out. I don't know if you've seen that or witnessed that.

Rob Nicholls (19:05.862)
I think you're absolutely right. think Adapting the system to the processes within the organization is probably the wrong way. I think you're absolutely right. But it's difficult. You're dealing with people the way they've always done things. And oftentimes those processes aren't documented. They're just the way we've always done them. So sometimes the solution can be to adapt the system the way we work. But you're absolutely right. think the better way to do it is...

is to implement the system in a cleaner way and adjust your internal processes to that as well. I think you make a really good point there about reporting and data output as well, because this data has got to be utilized for better decision-making. And I really don't see oftentimes today better decisions being made based on better data because the systems have been integrated and are working well. We're often working a little bit more from the gut in terms of how we feel about

what's working and what isn't, rather than, you know, the term of choice is the data-led decision-making. That's often not the case in businesses today. It's unfortunate, but it's just the way we were.

Paul Mills (20:16.22)
Yeah, I that that gut assumption thing, it really triggers me because I don't think any business should make decisions based off gut assumptions. You know, use a gut assumption as a starting point and then evaluate it using real grown up data. Don't make a, you know, a multi hundred thousand pounds tech project. Don't make a decision based on you think it's the right thing or you feel it's the right thing to do because you're going to end up in trouble. Absolutely.

Rob Nicholls (20:42.38)
Yeah, I mean, I've got a situation at the moment with one of my clients where we did an implementation, we did a conversion from one system into another, and we're not getting good financial data out of it. So it's kind of stymieing our decision making right now. We're literally not making decisions based on the data because we can't trust the data. And that's a really tricky situation that we've been in for a couple of months now, you know, going into two quarters now. That's not a good situation. So you literally can't make any decisions based on

Pricing, margins, profitability, product portfolio. That's not a good place to be. So we're wrestling with that at the moment. Hopefully we'll be out of it by in the next 30 days.

Paul Mills (21:23.838)
And that probably walks us in nicely to the next topic, which is how to leverage digital to open new revenue streams. Certainly, The rise of digital commerce, it's transformed the way businesses generate revenue. But with these new opportunities, with these new technologies, with the opportunities come challenges. Some of those challenges might range from

customer acquisition costs, digital infrastructure, investments. These have to be considered by the CFO, by the CMO, by the CEO. How can businesses navigate this landscape effectively? And in terms of your experience, Rob, what are the key financial and operational considerations when scaling an e-commerce or digital platform?

Rob Nicholls (22:15.394)
Well, it's something that we've been wrestling with for several years now. think some businesses are doing it quite well. Some businesses are not wrestling with it well at all. Revenue generation is perhaps the primary thing most businesses are struggling with. And I still don't have good line of sight to what processes or what systems will generate revenue generation capability. mean, A good product, a good service is an obvious one, but

Having line of sight to good data what's working, whether it's out of a CRM system or a CMS system, is difficult to be had. I don't see a lot of great examples in the UK of good systems being implemented that are driving good decision making that is generating revenue capability. I think in the UK, we've got a lot to be learned from looking at other markets. Other markets in places like Asia are adopting technology.

way, way faster capability. The US has already always been doing this and there's a lot of, awful lot of business opportunity there that is captured through good technical capability.

Paul Mills (23:27.432)
No, you're absolutely right.

Yeah, you're absolutely right there, Rob. I think we do need to make sure that digital, it's not optional anymore. It's essential for survival. I certainly think, and I observe UK businesses do fall behind other places, the US, Southeast Asia on digital. And I think businesses that fail to invest in...

the digital space, whether it's digital branding, social media, e-commerce, they're at risk of becoming irrelevant. And we know that there's lots of stats thrown out there. More than 70 % of B2B buyers, they start their purchase journey online. if brands, if your brand can't be found, if you don't have a strong digital presence,

If your digital presence is weak, if it doesn't explain, you know, the problem you solve and how you solve it and why someone should buy your brand rather than someone else's, you will struggle to attract and retain customers. It's as simple as that.

Rob Nicholls (24:28.76)
I think you're right. think the decision oftentimes is already made by a B2B buyer before they even come to your landing page or your website if you will. One of the biggest risks in business is just not being known. And unless you've got a digital strategy today, a whole swathe of the market potential client base, you're just going to miss. If you're not doing blogs, if you're not on the socials, if you're not ranking on Google, if you're not out there on a regular basis, reinforcing your message,

building your brand strategy, investing in all the things we talk about, you're just going to wither and die over time because there's going to be businesses out there that are really gung-ho, that are building brands, that are building brands for their business, but moreover building brands for the founder, the managing director. You need everyone, I'm a big believer in everyone needs to have a brand and you need to be talking about it on a regular basis.

You and I are both on the socials. I do socials every day. I engage on socials. Pretty much everyone knows what I do. They know where I am. They know how I work with. And that's through just, you know, repeating the message on a regular basis, telling people what you do, reinforcing it. And there's an awful lot of businesses. I was sat with at a dinner table last night with a dozen people. I would say at least half, more than half, just don't have a personal brand. People are just not known.

And it's that resonance with the person, it's you, it's Paul, it's Rob. It's not so much the business you work for, the organization as such, it's you, it's your brand. So there's a huge movement, if you will, to reinforce the person brand. And you can do it relatively inexpensive. You don't need hundreds of thousands of pounds to do this. It's relatively easy to do, to build a brand. And there's lots of people who've done it, but they're a very, very, very small minority.

I was under 1 % of people are posting regularly on the primary platforms for B2B business like LinkedIn. It's just ridiculous. And the traction you can get if you do do it for relatively low cost and everyone knows about you. mean, I say, was at dinner last night. Everybody knew me from my social media presence. You know, I'm no influencer, but that's how you get your brand out there. It's relatively low cost and it's remarkable.

Rob Nicholls (26:52.75)
the number of businesses where the founder, the managing director, the senior marketing director, the finance director, oh my God, there's no one in finance out there other than people like me. And it's relatively easy to do. And you've got to keep putting the message out there. You've got to put the story out, the narrative, what you're doing, who you're doing it for, what the outcomes you can expect. And it's remarkable the number of people, 90, 95 % of people aren't doing it. And so over time,

that person's brand, the value, the rate that the income they're going to generate is just going to degrade, isn't it?

Paul Mills (27:30.396)
Absolutely. And I think to add to that, I think there's a lot of business leaders out there when it comes to understanding that there may be a data weakness or a digital weakness in the organization that is going to be a big six figure plug to fill financially. And that

financial investment is kind of off putting. You think you must have the best CRM or I don't know, whatever system it might be. But I think the best digital strategies, they combine short term wins with long term scalability. And I think if you start small and gradually grow, and if you pick the tech stack that is scalable, it can integrate with other platforms, it can be done incrementally. That's the approach I would take.

Build it gradually over time. And it really does minimize all risk really, because you're basically investing incrementally. So you don't have to have that big six figure outlay straight away. You can make it much less. But I think the real where the magic really happens is when you take that incremental approach, get some external expertise into the business to help you map out where your business is at.

what your priorities are for the information requirements, what you're going to do with that data once you've got it, and what systems give you easy access to that to make those decisions.

Rob Nicholls (28:57.102)
I you're right. I think that the fractional consultant as a CTO or CIO is a really good way to go out there for, you know, 10, 15, 20 K. You can make a good investment, you know, over say six to 12 months, that'll save you a multiple of that with poor decision making around poor investment in the wrong systems, systems that don't talk to each other, systems that don't create any information from data that lead to better decisions. So I think that I think there's a relatively low cost.

I work with a lot of startups, a lot of early stage scale ups. And unfortunately, they're too worried about developing the right tech stack, getting the right systems in place, rather than focusing on building clients, building revenue, building a brand, relatively low cost. There's an awful lot of founders out there that have little or no revenue, but they have a really good personal brand that actually generates

revenue opportunities because people are learning about them. They're reading about them. They're hearing about their narrative. They understand their product or service. So they're generating income revenue opportunities through just building a personal brand. But some of them are too inwardly focused looking at the tech stack they're building. know, Should we put slack in place? Do we need a sauna? Do we need Monday? You know, what finance system do we run? You know, do we need husband? Well, no, you don't probably.

You just need a decent personal brand to build a decent narrative, to build a decent brand out in the marketplace that the people know about you. So you build revenue. And that's the primary thing. I think way too many businesses, startups, even scale-ups are focused on getting the right people, getting the right systems in place, rather than focusing on getting customers onboarding, onboarded, building value with them, getting pricing with them.

Getting them, making them sticky, staying with you and scaling them over time. Getting customers saying good things about what you do is the best marketing out there and it's relatively low cost too.

Paul Mills (31:04.335)
And relatively low cost to come from a CFO. That's probably a good point to close this show, I thought Rob. that's probably, you know, let's close it there. think if you've been listening or watching this episode, I hope you found value from the discussion. In the next episode, Rob and I will be discussing how to assess the role of marketing in international expansion. So stay tuned for that one. Rob, thank you again for giving up your time to share your perspectives. I really enjoyed this show and look forward to the next episode.

Rob Nicholls (31:30.817)
Yeah, looking forward to it. Cheers, Paul.

Paul Mills (31:34.93)
Right, let's.


People on this episode

Head Shot

Paul Mills

Host
Head Shot

Rob Nicholls

Guest