RPA or just “Process Automation” can help streamline many business processes. Process automation technology continues to improve and has an incredible array of ways it can help your business. Process automation continues to innovate with new features, connections, and tools making it easier than ever to implement and improve existing processes.
Return on Investment (ROI) in RPA is a way to quantify the expected and actual returns on related to the implementation of RPA. An investment in RPA that can help companies optimize their processes, improve delivery of information, capture errors, alert users, and improve solutions that drive customer satisfaction.
ROI is based on a set of metrics that can help a business understand the cost and benefits in a quantifiable way. Understanding these metrics will help the business know how much cost reduction or revenue improvements have been made. Knowing these values will help the business to drive better business decisions. This is vitally important to creating an effective road map for implementation, building support, and validating assumptions.
Here is the simple formula to calculate ROI.
Return On Investment = (Net Return on Investment / Cost of Investment) * 100
Understanding the components of ROI will help you to understand the measurement and value itself.
Step #1 is to know what you are measuring. This starts with identifying the process for which RPA may be a good fit. Once this is identified, it will be easier to know what types of data to collect, analyze, and benchmark for the ROI calculation.
It is essential for business to choose the right processes for automation. Picking up processes that are either repetitive in nature or prone to errors leads to a significant increase in ROI. Not all process can be automated, and don’t automate a broken or bad process. Seek to eliminate any inefficiencies or improve process to make it more consistent and repeatable prior to applying process automation.
After brainstorming which processes to automate, assess which one’s are best to automate. Any process that is very manual, very repetitive, high volume, mundane, etc. are all options. Remember to ask “Why” the process is needed to ensure the goals and objectives are still in line with the business’ strategy. If the goal/objective is still in alignment, then consider this process to automate. If not, attempt find a better answer.
Consider the objective of the process, then document the current key issues and pain points.
Hard ROI is the tangible things we can see and quantify.
Soft ROI are the things we can’t see that are still meaningful to the business or process
These elements will help you to determine the cost components.
When determining the process to automate, you will begin to see the reasons and areas that require improvement. Keep asking why something is needed and challenge the status quo. If something can be eliminated, you have immediately added value. Value stream mapping (VSM) is a key process/tool for any process improvements. It helps a business document, eliminate, and reorganize a process into its must value added components.
Tip: RPA Process Automation can be implemented in scale. A process automation task can be running in parallel. This is effectively like have the process run multiple times simultaneously thus improving output X times.
The cost savings can be a variety of different elements.
Once all the elements in ROI are determined, add them up and calculate the ROI. It’s a normal process to review and update these figures as you dial in your approach to process automation. If you have several projects under consideration, you will be able to compare. This comparison is important to determine where to spend your time and money and how to best help the business.
Process Automation can help. There is no denying the advantage of efficient processes and significant cost-savings process automation has to companies. Businesses looking to adopt RPA process automation services need to understand the value brought to the business. Understanding the key performance metrics used to measure the ROI of RPA accurately will help you to get these business justifications right!
Do you need help with calculating the ROI for your RPA process automation project? Do you need help identifying prospected processes? Do you need guidance or advice to help improve processes or map the process for its value? Do you need help with process automation? Contact Flexware Innovation (form below) and let’s explore the best steps for you to take.
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