According to Gartner, 85% of finance teams are currently undergoing a transformation.
But what is a finance transformation?
The goals of finance transformation—among them automation, instant access to more diverse data, and the faster delivery of more strategic financial knowledge—provide obvious benefits, but it’s sometimes difficult to sell those benefits to those who control the budgets.
Even when armed with a compelling ROI and a bulletproof plan, you should expect to spend 40% of your time selling the change before you even get started on the transformation.
So how do you convince decision-makers that the next step in your finance transformation is worth the time and investment? Here are 6 recommendations for successfully making your business case to get to an emphatic “yes” from the powers that be.
- Identify a Considerable Pain
- Quantify the Pain
- Quantify the Benefits
- Show the ROI
- Be the Best Alternative
- Sell It
- Conclusion: Get a "Yes" on Finance Transformation
1. Identify a Considerable Pain
Any investment in finance transformation must solve a problem that’s worth solving. Positioning your transformation as, well, transformational, is the first step in getting leaders to take notice. Once you’re in the door, sell the plan like the big deal that it is. Show real areas of pain and the real solutions that will solve them. And, make it more than just your team or even just Finance; make sure it supports company-level goals and objectives.
2. Quantify the Pain
The numbers behind the problem aren’t just expected, they are what leaders use to make important business decisions. So start by quantifying the pain in terms decision-makers will understand and agree with. Quantify inefficiencies in hours or days wasted. Frame errors or friction points in terms of money and opportunities lost. It not only puts the problem in a common language, it shows that you’ve done your homework and understand the scope of both the pain and the eventual benefits. Once the numbers get big enough, it’ll be hard for any business leader to ignore the impact of solving the problem.
Sometimes the benefits are difficult to quantify, especially if they relate to compliance, risk reduction, and strategic benefits. Make sure to address these points, either in a broad calculated estimate or on additional talking points.
3. Quantify the Benefits
Transforming Finance to become more efficient and more accurate is the goal, but your effort is going to be measured in time and dollars, so be sure your benefits are as well. Once you’ve done the homework to quantify the pain, it’ll be easier to quantify the efficiency, productivity, and speed gains in the same terms. So if financial reporting consumes 50 hours of aggregate manual effort per month, show that automation and integration will save the company 600 hours and $60,000 annually. The numbers will quickly add up, making it easier for executives to see that this is a significant pain and the benefits are worth the investment.
4. Show the ROI
If you’ve followed the previous tips, the ROI of your transformation should now sum up to a no-brainer for leadership. The purpose of an ROI analysis is to show that the dollar value of the benefits is greater than the dollar value of the cost of the project, expressed as a percentage.
ROI % = (Net Benefits from Project / Total Cost of Project) x 100
As a general rule, an ROI of 20% or higher is considered a good use of capital. But remember, cash is a finite resource and your leadership team can’t invest in every project simultaneously. The higher that percentage, the more compelling the business case and the more likely you’ll get a yes from management.
By the way, you can use our free ROI calculator to build your business case for an FP&A platform.
5. Be the Best Alternative
Your company is only going to take on so many budget- and bandwidth-consuming initiatives at a time. Prove why your finance transformation project is the best choice, and make sure the need is crystal clear and the impact is overwhelming. A higher ROI makes finance transformation a higher priority, especially when it’s well aligned with company goals. When done right, the decision-makers should say, “There’s no way we can afford NOT to do this project.”
6. Sell It
Treat this entire project as a sales pitch and use sales techniques to get the win. Leverage the psychological principles of persuasion, like scarcity, reciprocity, and social proof. Put a time limit on the need (“it’ll only get worse”) or the imperative (“everyday we don’t solve this problem costs us $1,000”). Include benefits for the decision-makers, and make sure they get some credit. And, do your research to show how competitors and market leaders have already done this same finance transformation with this same software solution and realized great success.
Conclusion: Get a “Yes” on Finance Transformation
Like anything in life, getting a yes for your finance transformation comes down to the story you tell. Finance relies on storytelling to sell a vision and get buy-in from the business, so leverage those skills. But, couple them with good, old fashioned sales tactics that leave your decision-makers with no other option but to approve this project.
Hopefully these best-practices will put you on the right path to getting a big fat yes from your boss.