The CFO wants a business case. Not enthusiasm about digital transformation or vague promises about efficiency—actual numbers. What will this cost? What will it return? When will we see payback?

These are reasonable questions. Procurement technology isn't cheap, and competing priorities always exist for investment budgets. Making the case requires speaking the language of finance: return on investment, calculated credibly and presented clearly.

The Challenge of Procurement ROI

Calculating ROI for procurement software is genuinely difficult. Benefits are often distributed across the organisation, materialise over time, and can be hard to isolate from other changes happening simultaneously.

Did savings come from the new software, or from the new category manager hired the same quarter? Did efficiency improve because of automation, or because the team finally documented their processes? Attribution is rarely clean.

CFOs know this. They're appropriately sceptical of vendors' claims and internal advocates' enthusiasm. To get investment approved, you need an approach that acknowledges uncertainty while still making a compelling case.

Hard Savings: The Starting Point

Hard savings are tangible, measurable, and directly affect the bottom line. They're the most credible component of any ROI calculation and should form the foundation of your business case.

Reduced duplicate payments are often the easiest to quantify. How many duplicate payments did you make last year? What was their value? If the system prevents 80% of those duplicates, that's a concrete saving. Pull actual data from accounts payable to ground this in reality rather than assumption.

Early payment discounts become capturable when you have visibility of payment timing. If suppliers offer 2% for payment within 10 days and you currently pay in 45, there's money being left on the table. Calculate the value of discounts on your largest suppliers to size the opportunity.

Price reduction through better negotiation is harder to attribute but often substantial. When you can see consolidated spend across suppliers and categories, you negotiate from strength. A 2% improvement on addressable spend can dwarf other savings categories.

Fraud prevention has measurable value when you can estimate current fraud exposure. Industry benchmarks suggest organisations lose 5% of expenditure to fraud and error. Even preventing a fraction of this represents significant return.

Soft Savings: Real but Harder to Capture

Soft savings are genuine but don't flow directly to the bottom line. They represent efficiency gains, risk reduction, and time freed for higher-value activities.

Time savings from automation are substantial. Calculate how many hours are currently spent on manual supplier onboarding, document chasing, data entry, and report compilation. Multiply by loaded labour cost to size the value. The question is whether that time translates to reduced headcount or redeployed capacity—different organisations will answer differently.

Risk reduction is valuable but hard to monetise. Better supplier monitoring reduces the probability of supply chain disruption, but what's that worth? What's the expected cost of disruption multiplied by the reduced probability? These calculations require assumptions, but structuring them explicitly is better than ignoring risk value entirely.

Compliance improvement has both cost and risk dimensions. Avoiding regulatory penalties has calculable value. Reducing audit preparation time has measurable benefit. Demonstrating control to customers may protect revenue that would otherwise be at risk.

Building the Financial Model

A credible ROI model needs several components assembled clearly.

Investment costs include software licensing or subscription fees, implementation services, internal staff time for implementation, training costs, and any required infrastructure. Be comprehensive—hidden costs that emerge later undermine credibility.

Ongoing costs cover annual subscription or maintenance, support contracts, internal administration, and periodic upgrade or enhancement work. Total cost of ownership over the evaluation period, not just initial investment, is what matters.

Benefits should be itemised and sourced. For each benefit line, document the calculation methodology, the data sources, and the assumptions. Be explicit about confidence levels—some benefits are nearly certain, others are more speculative.

Payback period answers "when do we get our money back?" For most procurement software, payback within 6-12 months is achievable if the case is genuine. Longer payback periods face harder scrutiny.

Net present value accounts for time value of money. A pound saved three years from now is worth less than a pound saved today. Apply appropriate discount rates to future benefits for accurate comparison.

Conservative Assumptions Win

Overstating benefits destroys credibility. CFOs have seen many business cases that promised the moon and delivered disappointment. They're professionally sceptical, and they should be.

Conservative assumptions serve you better than aggressive ones. Underestimate benefits. Overestimate costs. Build in contingency. When you exceed modest projections, you build credibility for future investments. When you miss aggressive projections, you lose trust.

Sensitivity analysis shows what happens if assumptions don't hold. If the case only works with best-case assumptions, it's weak. If it works even with conservative assumptions, it's robust.

The Qualitative Dimension

Not everything that matters can be quantified. Strategic value, competitive positioning, stakeholder satisfaction, and organisational capability are real but resist monetisation.

Include qualitative benefits, but don't lean on them too heavily. CFOs primarily want numbers. Qualitative points support the case but don't substitute for hard savings.

Risk of not acting deserves mention. What happens if you don't invest? Competitor advantage? Regulatory exposure? Continued inefficiency while others improve? The status quo isn't free, and its costs should be acknowledged.

Presenting to Finance

How you present matters almost as much as what you present. Finance leaders have limited time and extensive scepticism. Tailor your approach to their perspective.

Lead with the summary. What's the investment? What's the return? What's the payback? If those numbers are compelling, they'll want details. If you bury the conclusion after extensive context, you've lost attention before reaching the point.

Provide supporting detail but make it accessible. The full model should be available for scrutiny, but the presentation should highlight key numbers rather than walking through every cell.

Acknowledge uncertainty honestly. "These projections assume..." is more credible than pretending certainty exists where it doesn't. Finance professionals respect intellectual honesty and distrust overconfidence.

Connect to strategic priorities. If the organisation has stated goals around digital transformation, risk management, or supplier relationships, show how this investment supports them. Financial return matters, but strategic alignment helps too.

After Approval: Delivering on the Case

The business case doesn't end at approval. It creates expectations that you need to meet.

Track actual versus projected benefits. Build measurement into implementation from the start. If you promised £200,000 in savings, be able to demonstrate you delivered them.

Report progress regularly. Keep the sponsors informed of benefits realisation. Celebrate wins. Address shortfalls with explanation and corrective action.

Use success to build future cases. A track record of accurate business cases makes future investments easier to approve. CFOs trust colleagues who deliver what they promise.

The ROI calculation is ultimately about credibility—making a case that's honest, grounded in evidence, and conservative enough to be believable. Get that right, and the investment typically follows.