Last month, a colleague and I presented a webinar on how to build a killer business case for Record to Report transformation (view the eBook) to finance professionals and transformation managers, all of whom had a common goal – to start a finance transformation project. As with any kind of project within an organization, funding is always a challenge. The purpose of the webinar was to highlight the importance of underpinning an internal business case by a robust Return on Investment (ROI) analysis. This blog post will delve deeper into this topic by looking at a recent client who was able to obtain the green light for their project by successfully quantifying their future benefits.

My role at Trintech is, in part, to help analyse and improve the Record to Report (R2R) process within global organisations. Business Process Re-engineering is often a costly and time-consuming process. For this reason, we are seeing an increasing number of organisations turning to software solutions to help enable global standardisation and greater process efficiency and effectiveness within Finance. Nevertheless, a software implementation still requires a business case to release funding for the project and convincing executives that one project is of greater importance than another can be a challenge.

The challenge is proving one project is of greater importance than another

This was especially the case when I recently engaged with a client, who will remain unnamed, who wanted to start a finance transformation and automation project but had previously been rejected by its funding board. They were attempting to re-submit their business case but required help with making it sufficiently compelling. They had been advised that only 8 of a possible 30 technology projects would be approved due to financial and IT resource constraints.

The constraints and bottlenecks of resources are a common reason organisations are required to submit internal business cases and therefore creating a compelling proposal that outlines both the long-term strategic benefits as well as shorter-term financial benefits is essential. The original, rejected business case focused on these strategic, non-quantifiable benefits in the long term as well as outlining the costs of undertaking the transformation project. It had, however, neglected to take into consideration those financial benefits and cost savings of an automation project which had ultimately resulted in the rejection of the proposal.

The key to success, in this case, was to fully understand the as-is process and compare it with the target operating model. With any kind of automation project, greater efficiency and effectiveness in a business process will generate time savings. By factoring this with the fully-loaded cost of employees, we can calculate a quantifiable financial benefit resulting from the project.

“We are asked to improve a process, but never told how.”

By having a deeper understanding of their as-is financial processes, organisations can calculate ROI to a more precise level. In the example of my client, after working through a number of areas and metrics that would see efficiency gains from the project, we were able to determine 16 unique areas of savings.

When looking at the list of benefits my client stated, “We are asked to improve a process, but never told how. This list shows us the many ways in which the process will be made more efficient.” The largest four or five benefits were big savers in terms of time and efficiency. However, the remaining, smaller benefits hadn’t previously been considered. Although they seemed individually, financially insignificant, together they represented a material saving. Furthermore, they were more likely to be related to the more strategic, less quantifiable benefits of the project. These included better visibility, control and mitigation of risk. Therefore, when incorporating the full list of benefits, a greater return could be generated by the project than originally anticipated.

As a result of being able to underpin their business case with a robust ROI, my client was able to be placed in the top 8 of 30 projects to receive the funding required to undertake their finance transformation project. By fully understanding their as-is Record to Report process, they were able to quantify the short-term future benefits. Most importantly, they could show the project had a positive Net Present Value (NPV) with a payback period of under six months from their go-live date. When combined with the long-term strategic benefits such as process visibility and harmonisation, this resulted in a successful proposal.

Trintech partnered with an independent third-party research group of experienced ROI-analysts to build a robust ROI tool that can help build your killer business case for a finance transformation project. Contact us today for a custom evaluation of the benefits you can achieve by automating your financial close process. For further information on this topic, you can also download our Record to Report Insights Piece, “Building a Killer Business Case for Record to Report Transformation,” below.

Written by: Tom Edwards

Tom Edwards started his career working at Johnson & Johnson within Commercial Finance. He subsequently moved to technology consulting specialising in SAP, with a focus on Finance solutions. This covered solution design and implementation, project management, pre-sales and Business Process Advisory with numerous FTSE100 and other £1bn+ organisations. He is now Finance Transformation Manager at Trintech.

Tom graduated from the University of York with a BSc Hons in Accounting, Business Finance and Management and continues his studies to become a Chartered Accountant.