The ROI Conundrum in Technology Investments

In the evolving landscape of corporate finance, Australian Chief Financial Officers (CFOs) are increasingly tasked with navigating the complexities of technology investments. Recent research shared by ADAPT at their CFO Edge event highlights a pressing challenge: 80% of Australian CFOs are struggling to accurately assess the return on investment (ROI) from their technology expenditures.

A striking revelation is the widespread difficulty in tracking the value of technology investments. This struggle is compounded by significant declines in visibility around both cost and outcomes. These gaps can erode confidence in tech initiatives and undermine their strategic potential.

Key Challenges Identified

Declining ROI Visibility

Nearly half of CFOs report a 47% drop in their ability to track the benefits technology delivers to their organisations.

Reduced Cost Transparency

A 30% decline in visibility into tech spending has made it harder for finance teams to pinpoint areas of inefficiency or waste.

Resource and Expertise Constraints

Many organisations are grappling with stretched resources and a lack of specialised knowledge to fully leverage their technology investments.

Inflationary Pressures

Rising costs are making it harder for finance leaders to justify and optimise their tech budgets.

Fragmented Metrics

Without unified frameworks to evaluate performance, CFOs face inconsistent and incomplete data when assessing ROI.

Why AI and Data Governance Are Critical

Artificial intelligence (AI) is emerging as both a solution and a challenge for CFOs. When applied effectively, AI can enhance forecasting, streamline financial operations, and improve decision-making. However, without proper data governance and integration, AI initiatives risk falling short of their potential.

CFOs must adopt an approach tailored to their organisation’s data maturity and broader IT strategy. Those that view AI as a scalable, long-term investment—rather than a quick fix—are more likely to see sustained benefits.

Practical Strategies for CFOs

To address these challenges and optimise their tech investments, CFOs can focus on:

Enhancing Transparency

Implement tools and processes that provide a holistic view of technology costs and benefits. This might include dashboards or frameworks that link financial performance to tech outcomes.

Fostering Collaboration

Build stronger partnerships with CIOs and IT teams to align technology priorities with business goals.

Standardising Metrics

Establish unified benchmarks to measure ROI, ensuring consistency across departments and projects.

Investing in AI and Automation

Leverage AI for data-driven decision-making but prioritise robust governance and ethical use.

Engaging External Expertise

Consider consulting with external partners to bridge gaps in knowledge or resources, particularly when navigating complex technologies.

Prioritising Flexibility

Adopt a modular approach to technology investments, allowing for adjustments as business needs evolve or new opportunities emerge.

CFOs as Strategic Partners

In this dynamic environment, CFOs are no longer merely financial stewards; they are strategic enablers of digital transformation.

Their role requires a delicate balance: safeguarding financial health while championing innovation and agility. By addressing the ROI challenges head-on, CFOs can turn technology into a competitive advantage rather than a source of uncertainty.

The road ahead is undoubtedly complex, but for CFOs ready to embrace these strategies, the payoff is clear: a stronger alignment of technology with business objectives and, ultimately, a more resilient and agile organisation.