Rethinking ROI in Finance: Key Questions to Ask

“What’s the ROI?” 🤔 This is a fair question that I have often asked during my FP&A career, but it’s not always the right one.

To be clear, if the amount is large enough and/or the return is forecastable, then ROI is the right way to go. However, for ‘small-to-medium-sized’ requests with uncertain payoffs, there is a better set of questions to find investments that move the company forward.


Let’s use an example that most FP&A teams will be familiar with: What is the ROI of forecasting software? 📊

Forecasting software should improve efficiency, but savings may not hit the P&L quickly, unless the software is implemented instead of hiring. There may be potential to save on FP&A headcount in the future, but only if the forecasting software scales and the team is focused on efficiency.

However, forecasting software still might be a good investment.

One of the biggest benefits that I have realized from these tools is that they illuminate doors that you didn’t know you could open and act as a steppingstone to new capabilities.

For example, the right forecasting software can directly impact the bottom line by enabling more precise product profitability analysis, identifying underperforming segments, or empowering leaders to better control costs proactively, to name just a few.

💡 The key is thinking critically about potential upside and where the tool will drive value—even if it’s not immediately quantifiable.


Finance should focus on enabling good investments, not just gatekeeping. These questions are a good place to start when addressing a new investment request:
+ Is the return on this investment clear and forecastable?
+ If not, where could this investment create upside, and when would the benefits materialize?
+ What conditions must be met to capture this upside, and what proactive actions are needed?
+ What’s the opportunity cost, in both time and forgone investments? How does this fit with our portfolio of investments?
+ Does this align with our strategic priorities?
+ How can the finance team help make this investment successful?


I would only ask these questions if investment dollars are available. Sometimes, if there is no measurable ROI quickly enough, and the company is already expected to miss the budget, the answer may have to be no, for now. I would be upfront if that’s the case.

However, if investment dollars are available, the focus should be broader than ROI for ‘small-to-medium-sized’ requests with uncertain payoffs.

⌛ I heard from a very successful CFO who said something along the lines of, “if the benefit is not clear after 10 minutes of explanation, then the answer should probably be no.”

This may be overly harsh, but the questions above should help illustrate the soundness of an investment better than an ROI analysis built on layers of questionable assumptions.

How does your finance team with these types of investments?