How can we calculate the ROI of implementing strategic planning software and justify this investment to senior management?
An interesting question was recently raised by a potential client:
How do we justify implementing your strategy execution platform in front of our senior management team?
If you are advocating for automating strategic planning in your organization, the facts and ideas below can help support your case.
Starting Point: Empirically Proven Overall Time Savings
As with other digital transformation efforts, understanding expected improvements starts with analyzing the current situation and identifying time and cost centers.
Based on surveys of clients who ran a pilot of BSC Designer, here is what we know about the BEFORE state:
4 hours per week is the average time a manager spends updating the “strategic plan” spreadsheet.
A typical AFTER state, as reported by pilot users, is:
70% time savings compared to spreadsheet-based strategic planning.
The idea of maintaining/updating a “strategic plan” spreadsheet can be vague, but it typically includes activities such as creating scorecards, updating KPIs, attaching supporting evidence, and producing reports.
Depending on the business domain and organization type, this can translate into $25k to $100k per year saved in reporting effort alone. We also provide a strategy execution ROI calculator where you can enter your own data to estimate potential savings.
A significant part of the investment is the time required to master the software. In the case of BSC Designer, pilot users reported about 15 hours on average, including experimentation with the software, training videos, and live training sessions.
Will the same benchmarks apply to your organization?
We found that the most important differentiating factor is the organization’s maturity in strategic planning discipline. Organizations with established workflows and a clear strategy architecture require less time to adopt new technology. In this sense, a strategy self-audit is a good starting point.
Benchmarking The Cost Of Planning
To add another benchmark and validate the empirical estimates from another perspective, we can look at the broader problem of planning automation.
According to APQC, as reported by CFO.com1, organizations spend about 0.1% of revenue on planning and management accounting. While this category is broad, it gives a rough estimate of the total cost of budgeting, forecasting, management reporting, variance analysis, and other activities that fall under strategic planning.
Another estimate comes from a McKinsey survey2. Managers reported spending nearly half of their working time on non-managerial work, including administrative work, strategy-related work, and talent and people management. Spreadsheet management often appears across all these segments for tracking goals, maintaining KPIs, attaching evidence, or calculating incentives.
Error Rates And Risk Of Data Inconsistency
If time-saving estimates are not convincing, another perspective is to assess the risks of managing strategy in spreadsheets.
The article “Errors in Operational Spreadsheets”3 reports that 94% of spreadsheets contain errors.
Similar estimates of 86% to 100% appear in “Spreadsheet Errors: What We Know. What We Think We Can Do.”4
In strategic planning, data consistency issues lead to:
- Errors in calculations
- Errors in data structure
- Errors in uploaded evidence
These issues translate into additional rework time that is already reflected in the time estimates above.
Less tangible, but often more important, is the risk of not having the required data or evidence when needed for management discussions or audits, or making decisions based on incomplete or incorrect information.
Combining ROI Factors
The ROI of strategic planning software comes from three main sources:
- First, measurable time savings in maintaining scorecards, KPIs, and reports. Even conservative estimates justify the investment within the first year.
- Second, reduced risk of errors and improved data consistency.
- Third, improved strategic discipline. Clear strategy architecture, transparent ownership, evidence-based tracking, and better alignment across teams create long-term value that is harder to quantify but critical for execution.
Conclusion
To evaluate ROI in your organization, follow these steps.
- Estimate your current cost of spreadsheet-based strategic planning. You can use our ROI calculator.
- Run a pilot using one representative strategic planning spreadsheet.
- Measure BEFORE and AFTER time metrics.
- Calculate savings using your real data and compare them with the software and training costs.
- Finance Team Collaboration Drives Lower Process Costs: Metric of the Month, Perry D. Wiggins, CFO, 2024 ↩
- Stop wasting your most precious resource: Middle managers, 2023, McKinsey ↩
- Errors in Operational Spreadsheet, Powell, Baker, Lawson. Journal of Organizational and End User Computing, 2009 ↩
- Spreadsheet Errors: What We Know. What We Think We Can Do. Dr. Raymond R. Panko, 2000, University of Hawaii ↩
Alexis Savkin is a Strategy Implementation Architect and founder of BSC Designer, a strategy execution and Balanced Scorecard software platform. He helps organizations automate performance management and turn strategy into measurable results. Alexis is the creator of the “Strategy Implementation System”, author of 100+ articles on strategy and performance measurement, a regular speaker at industry events.