How to convince your CFO of your automation initiative Part 3
While the first two parts of this series (part 1 & part 2) were about getting as deep as possible into the head of your CFO (Chief Financial Officer) in order to prepare the automation initiative in detail and to be able to explain the advantages, but also the stumbling blocks, the last part is now about the nitty-gritty. In addition to the preparation of the business case from part one and the linking of a strategic plan from part two, in part three various scenarios are added which the CFO now has to weigh up. Additionally, it’s of interest to learn more about how value realizations in the form of productivity increases and competitive advantages look in the medium and long term, which should complement the picture of the big vision of the successful automation initiative.
Automation initiative 101: The cash invested today should bring in more cash in the future
Different scenarios for the CFO
Even if you as the initiator have set up a clear scenario, for example to achieve profit X over five years with investment Y, the CFO certainly has not just one, but several scenarios in mind at the same time. On the one hand, we are talking about the best-case scenario, and on the other hand, the worst-case scenario. Depending on the CFO, he will be willing to take more or less risk, to go more on the offensive or to take a more conservative course. This will be reflected in the presentations of his scenarios:
- Profit X is exceeded (offensive and best-case).
- Profit X is deliberately forecast lower (conservative and solid)
- Investment Y does not work, the automation initiative fails, the investment results in a loss (worst case)
An investment as large as the one in automation initiatives is always associated with a risk, but must be approached proactively to transform the company into a digital one and prepare for tomorrow.
A proactive rather than reactive approach to the automation initiative
Getting back to the big picture, the CFO wants to use the individual steps of the automation initiative as a comprehensive strategy to drive the company’s transformation to the point where the consequence is competitive advantage in the industry in the medium and long term.
In addition to the tangible return that the CFO wants to see in the short term, there is something else floating around in his head – the transformation of the company into new realms
The vision takes shape – from individual to comprehensive automation
While individual automation in the company can rapidly reduce the total cost of ownership in the relatively short term due to the reduction in error rates and the elimination of manual work, it is primarily the productivity increases in a second step that bring the big results. In this first step, automation, starting with the processing of incoming mail, for example, frees employees from tedious manual work. These created time or capacity resources allow them to engage in more valuable work. The benefits created by automated inbox processing include the following:
- Automatic extraction and preparation of data
- Automated management of all data – always up to date and ready to go
- Automated forwarding to the right departments
It is these points that allow the benefits of the first automation to take shape across departments in the next process step: The accounting department, for example, benefits massively from automated incoming mail processing in that all documents reaching it are already prepared and precisely classified. Error-free and faster further processing (automated) is the logical process optimization. These productivity increases through automation enable employees to concentrate on the essential tasks of their jobs, for example, to achieve (even) higher satisfaction ratings with existing customers, which in turn is reflected in more positive business results.
The linking of individual automation ensures the desired difference across departments and throughout the company
Competitive advantage as the ultimate goal of the automation initiative
As end-to-end processes are automated, eliminating repetitive and low-value work for employees, new capacity is created across the enterprise. You have convinced your CFO of your automation initiative. Now it’s up to management to properly identify and reallocate these gained resources. The competitive advantages sought with the automation initiative can also be accelerated enormously with the right deployment of employees in value-added tasks.