My kids hate it… really hate it when I tell them they will use math for the rest of their lives. Not just math I tell them… Algebra… Formulas (l love them). On the other side, the rooms of accountants that I talk with…when I say that we will always use math… they agree with me (shocker).
I write a lot about return on investment and cost per invoice. They both go together because you need to know you cost per invoice (CPI) before you can ever calculate your return on invoices (ROI)… CPI – ROI., I feel like I have the beginnings to a very bad children’s song.
I had the pleasure of being interviewed by a financial magazine. The reporter and I had a good two-hour conversation. I started getting nervous in the middle of the conversation that I wasn’t making my point. Don’t get me wrong, I wasn’t frustrated, it was just one of those things that I wanted to really (really) do well. As I look back on that conversation, not making my point, I believe, is due to the fact that things about Accounts Payable Automation are becoming more and more clear to me. It reminds me of the saying when you make a speech, which is essentially what I was doing with the reporter (poor guy – I warned him though). You practiced your speech, which I did, then you give your speech, again… which I did and then you remember (afterwards) the speech you wanted to give.
Here is what I wanted to give.
In regards to the middle market and automation, which is what the article is about, ROI isn’t as apparent. The middle market doesn’t have the ability to get huge numbers from headcount reduction. Stay with me, that is only the set up. Because the ROI is different in the middle market the big automators can’t play (bold statement I know). The point I wanted to make was; the ROI is different, the big automators don’t help in their council and message to automate becomes… well… unattractive to the middle.
Here is looking at you!
Here you go middle… something to think about and it’s a simple formula for ROI:
(Current Cost – Automated Cost) X Time = ROI
The above formula is the premises to my second book The Argument to Automate. I have been wanting to change the name of that book… and I think I will (in opposition to my publisher’s advice – very sorry). I think the new name should be… “Why the Middle Should Automate… How Innovation Can INSPIRE not Fire”.
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