What's the ROI of FP&A Software? How to Advocate for the Upgrade You Need

Emily Mason | Senior Content Writer

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Investment in modern technology across an organization can yield efficiency and even competitive advantage in the marketplace. So why does FP&A consistently get passed over in decisions to upgrade a software platform or system?

2023 research from FP&A Trends uncovered that:

“24% of finance leaders report that FP&A is not considered a strategic investment area within their company.”

One reason rises to the top: 30% of the FP&A practitioners said it was difficult to justify the ROI on FP&A technology against investment in shorter-term sales and marketing activities.


But the evidence is mounting that those short-term investments can’t match the long-term ROI of an FP&A team equipped with modern budgeting and forecasting software.

Don’t delay this investment for another year until you’ve considered these factors.

Why are other investments winning over FP&A software?

You’re a finance leader: you care about the bottom line and want your software spending to have a definitive path to ROI.

  • The potential ROI of sales & marketing software can be easier to calculate than FP&A software. It’s hard to argue when Sales requests investment for Gong when they can draw a direct link between software investment and closing 20% more deals!
  • Sales and marketing software vendors have invested heavily in easy onboarding with low or no implementation costs. In contrast, legacy FP&A software often requires intensive IT support, time, and training to learn. Even though third-gen FP&A platforms now offer much faster implementation and ease of use, the stereotype persists and is hard to shake.
  • It’s a classic case of “the cobbler’s children have no shoes.” Finance wields a lot of influence when other departments pitch a new investment in software, yet your own team is fighting the daily battles against inefficient budgeting processes and disconnected operational and financial data. You’re secretly drowning in manual work, but no one else in the business will notice what is holding you back (let alone champion the tools you need to drive business performance!)

In light of these challenges, it makes sense why FP&A software investments get delayed year after year. But they shouldn’t – here’s why.

Why FP&A software is a good investment

FP&A has a superpower: combining operational + financial insights to collaborate across business units as strategic finance business partners. With a bird’s eye view of trends across the business, you can advise the leadership team and business partners with real-time data and insights to make wise decisions in uncertain times.

That’s why FP&A software investment is more than just software investment. It doesn’t just benefit your analysts (who will undoubtedly save time and sanity). It gets you beyond manual tasks so you can identify ways to save or generate revenue to drive business performance.  

FP&A generates revenue in direct and indirect ways, and both rely on modern technology. (thanks to Mohamed ElRouby, CFO MEA at Pharmanovia for this approach). When you build your business case to purchase FP&A software, remember these two angles.

Direct ROI

FP&A drives direct value when the team looks at the hard numbers of projected and actual expenses and hard data and finds immediate ways to save, like improving cash flow, collection, or cost savings. Analysis is FP&A 101, but it’s impossible to do it well without accurate, accessible, synchronized data to work with!

How FP&A software drives direct ROI

  • Spot anomalies and opportunities to save money – Real-time data access eliminates the delay of gathering data from disconnected business systems
  • Avoid costly mistakes - Data accuracy is key. Stale, disorganized, or incorrect data can cost you thousands in errors!
  • Improved business performance - With the ability to compare scenarios in a fraction of the time, you can support your C-suite to navigate through uncertain economic conditions – or even develop a game-changing idea.

Did you know that Amazon Prime was the brainchild of a strategic FP&A team? Jason Child’s FP&A team at Amazon analyzed the performance of offering free shipping vs a 10% discount and realized that free shipping was the more profitable option. Now, there are 230+ million paying Amazon Prime members. Now that’s the power of an FP&A team applying their unique insights to do more than simply cut costs.

Indirect ROI

FP&A produces value indirectly through business partnership. When analysts have the bandwidth to collaborate with stakeholders they can help them do their jobs better. And, when finance gives budget owners direct access to their financial data and insights, a ripple effect of more responsible spending will spread across the business.

How FP&A software drives indirect ROI

  • Savings through more responsible spending – Automated financial reporting and self-service access to data help stakeholders take ownership of their budgets, which translates to more responsible spending.
  • Increased capacity for finance business partnership – Automation reduces your manual workload so you finally have the time to understand and collaborate with budget owners. You’ll find ways to save or increase efficiency as you get to know their business unit and challenges.  
  • Increased revenue through more accurate plans –The best plans are informed by stakeholders themselves. Engage them with less friction in a collaborative planning process that yields more accurate plans and real fiscal results.

One VP of Engineering found immediate ways to trim his budget after meeting with his finance business partner to review his workforce and expense plans.

“Suddenly I was recommending a cut to my own spending. Let me tell you, that was a first.”

Read his journey from a ‘credit card mentality’ to budget accountability.

IT Resources are no longer a roadblock

Hopefully, your brain is humming with different ways an FP&A tool could prove its ROI over time. However, not all modern FP&A software is created equally.

Lack of IT resources remains a top objection to FP&A software investment (21% of respondents in the FP&A Trends survey). Legacy FP&A systems (including on-premise installations) are expensive to configure and maintain – but they’re no longer your only option.

Some 3rd gen FP&A platforms, like Stratify, enable you to get up and running fast because we have intentionally focused on faster deployment time, data integration capabilities, simplicity in forecasting and budgeting, user-friendliness, and stakeholder collaboration. The platform doesn’t require extensive IT resources to implement and maintain. FP&A finally has powerful and viable alternatives with fast time to value – just like those sleek sales and marketing platforms that are so easy to pitch.

Compare Your Options: Top FP&A Software Solutions

Make this the year you finally lock in FP&A software investment

“Companies with modern finance functions can make better decisions on mergers and acquisitions, negotiate better prices from vendors and identify new markets that will be completely invisible to companies that don’t modernize their finance functions.”
Ben Chacko, Grant Thornton Senior Manager, CFO Advisory

Uncertain economic times demand that FP&A be a proactive driver of business strategy. Investment in the right tools and software can’t be an afterthought. Your counterparts in the organization have modernized, and you can’t delay another year. Without the right tools, you can’t deliver the strategic financial planning the business needs.

When you make your case for an upgrade or overhaul, include both the direct and indirect ways you can drive revenue and help the business thrive for years to come.

Last Updated:
July 4, 2024

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