1187: Pattern Recognition: How CFOs See Around Corners | Alex Chun, CFO, NEOGOV

That investor mindset now shapes how he leads finance. After joining NEOGOV in 2021, Chun focused on transforming finance into the company’s “centralized insights engine,” bringing quantitative discipline beyond the finance department and into sales, customer operations, and product decision-making, Chun tells us.

He contrasts the polished presentations of boardrooms with the reality of operations, where even changing the pricing of a product can require “90 steps” across multiple teams, Chun tells us.

Today, Chun is equally focused on AI’s impact across the business. At NEOGOV, teams are using AI to analyze customer conversations, automate workflows, and rethink scalability itself, Chun tells us.

What we do all day long is build HR suites dedicated to the public sector, along with personnel management and compliance tools, particularly for public safety organizations, to ensure their personnel are well trained, well monitored, and up to speed on the latest compliance requirements. It’s a classic vertical software story where you focus on a very specific niche and become the leader in that space.

When Warburg first bought NEOGOV in 2016 or 2017, the company had been around for about 15 years. It was founder-owned, had two-and-a-half products, and a very loyal customer base in public-sector HR, primarily around recruiting. The opportunity we saw was twofold. First, we wanted to build out the suite. HR directors needed far more than two or three products, so we expanded the platform. Second, we wanted to dramatically expand the go-to-market function because public-sector software adoption was still relatively early. We believed that with the right products and the right go-to-market motion, we could build a very large business.

That’s exactly what we did. We went from three products to 12 products and quadrupled or quintupled our sales and marketing investment. Right before I joined, NEOGOV acquired a company called PowerDMS in the public safety space. It looked very similar to the original NEOGOV business: one core product, 5,000 law enforcement agency customers, and a highly loyal customer base. We applied the same playbook there, expanding from one product to nine products and continuing to grow the platform.

The attractive thing about the public sector is that the customer base is incredibly stable. The city of Denver is not going out of business. Retention rates are very high, customers are loyal, and if you do right by them, they do right by you. At the same time, there’s still a tremendous amount of opportunity to help them adopt software solutions that improve how they operate.

CFOTL: I wanted to ask about your go-to-market function and how you architected it. Finance, I imagine, had a hand in it along with other parts of the organization. What’s different about it? I wonder whether the public sector requires you to engineer it differently.

Chun: It does, in a few ways. First, from a top-of-funnel perspective, public-sector buyers like to be communicated with differently. Traditional software go-to-market motions are often marketing-led, inbound-led, and driven by email campaigns. But public-sector agencies are “phone people.” They like conversations, relationships, and knowing the person they’re dealing with.

Our go-to-market model is built around that. We focus on creating personal interactions from the very first touchpoint and building trust before sending generic marketing emails. We’ve really honed the outbound call motion — understanding the best times to call, how to pitch, and what value points matter most because you have about 20 seconds before someone hangs up on you. That has worked very well for us.

As you move through the funnel, public-sector agencies — particularly the upper-middle-market and lower-market agencies we serve — often don’t have the bandwidth to buy and implement 12 products all at once. They’re busy and not heavily staffed. So the buying motion tends to happen in smaller stages. Agencies will adopt one or two products first, implement them successfully, and then come back later for more.

We adapted to that model by leading with one or two “spearhead” products that prove value quickly without overwhelming the customer from an implementation or change-management standpoint. Once we establish trust and demonstrate value, we have a team that manages that relationship for years and gradually expands the customer into the broader suite. That land-and-expand motion isn’t unique to the public sector, but it is very inherent to how this market buys software.

CFOTL: What are maybe the early signals that tell you customer demand is changing?

Chun: The CEO and I meet with our sales team every week and review a very detailed Excel spreadsheet that, honestly, looks like “a bag of Skittles was thrown on the table” because it’s full of red, green, and yellow indicators across every stage of the funnel. We track 18 different metrics across every segment we serve.

Every week, we look for areas where metrics suddenly turn red or green, and then we double-click into what’s driving the movement. Are we seeing a market shift? Did something change internally? Are customers telling us something different? For example, if the rate at which outbound calls convert into demos declines, or demos convert into qualified opportunities at a lower rate, we want to understand why. Do we need to adjust the product offering? The messaging? Or is it simply a macro issue tied to government budgets?

One thing I’ve focused on is building dashboards and heat maps that help us anticipate problems before they actually show up in the financial results. That level of instrumentation gives us earlier insight into what’s happening across the business.