How CFOs can get more value from finance process automation: Metric of the Month
Finance process automation is generating strong returns, but maximizing the value requires CFOs to understand what is driving those gains and to make deliberate use of the capacity created.
Current benchmarking data collected by the American Productivity & Quality Center shows the median organization reports a 45% cumulative return on investment from finance process automation over the previous 12 months (35% at the 25th percentile and 55% at the 75th percentile).
For CFOs, that benchmark is a useful reference point for what finance automation can deliver. But to justify continued investments and build future business cases, they need to show where that return is coming from, whether through fewer errors, shorter cycle times or the ability to support growth without adding headcount. Just as important is a plan for how any capacity automation creates will be used.
Reaching that level of clarity and evidence requires finance leaders to define success before implementation, consider how jobs and roles may change and identify benefits that fall outside the formal ROI calculation.
A credible automation ROI case starts with a baseline, not a post-implementation estimate. Finance leaders should decide before implementation which outcomes matter and capture the measures needed to prove change later. That could mean documenting error rates and their associated costs, cycle times for key processes, processing costs or the volume of work handled per FTE.
Success does not have to mean headcount reduction. Automation may instead allow a finance team to absorb higher transaction volumes to support business growth while delaying the need for additional hires.
Unless those measures and baselines are defined before implementation, real gains can become anecdotal, leaving finance leaders with a weaker case for the value automation created for the business.
Put freed capacity to work
Once automation begins to reduce transactional work, the management question shifts to how the resulting capacity is used. Other APQC benchmarks offer some perspective. The median organization reports a 20% reduction in finance personnel time spent on transactional activities. Another measure shows that 8% of finance FTEs have been redeployed to higher-level tasks. These measures use different samples and measure different things, so they should be read as directional signals rather than as an apples-to-apples comparison. Still, they reflect a familiar reality: Creating capacity does not automatically reallocate it to higher-value use.
Automation often changes transactional work rather than eliminating it. Employees may spend less time entering data and more time reviewing workflows, monitoring systems and investigating exceptions. That is more efficient, but it does not necessarily translate into the higher-level analysis or business partnering that organizations expect.
Some of the capacity created by automation will also be absorbed by growth. A finance team can process more transactions and become more productive without moving large portions of its workforce into strategic roles. When capacity does open up, however, leaders need to be explicit about how that time should be used.
Redirecting freed capacity takes deliberate change management. It may require adding new responsibilities, creating opportunities for cross-functional exposure or coaching on how to contribute beyond a familiar process. If finance leaders expect automation to create more strategic capacity, they need to decide where that capacity should go and whether employees have the skills to take it on. Otherwise, automation may improve efficiency without delivering the broader value leaders expected.
Look beyond labor savings
Some of automation’s most valuable benefits will not show up as a reduction in labor costs. More current data, faster closes and fewer errors can improve how quickly finance responds to the business and how much confidence leaders have in the numbers.
Those gains often become most visible when the business needs something quickly: an auditor asks for information on short notice, a CEO needs an answer before a board meeting or a business leader needs current numbers to inform an important decision. Automation can make those requests routine rather than requiring a scramble to update records or reconcile data first.
Those benefits may sit outside a formal ROI calculation, but they still belong in the broader business case for automation.
Automation’s payoff depends as much on management choices as on technology itself. A credible business case starts by defining success before implementation, establishing measures that can show progress and considering how newly available capacity will be used.
With those pieces in place, finance leaders can see more clearly what automation is delivering and use those gains to relieve pressure, support growth and take on more valuable work.
