Why Step One in Any Automation Project is Defining Economic Value: 7 Key Considerations
IT leaders are continuing to invest in automation—specifically, robotic process automation (RPA)—in 2022. According to Gartner, this year 85% of their customers are going to increase or maintain the level of investment in automation technologies and capabilities. This is great news if automation is a top priority for your organization; as interest in automation continues, or what Gartner calls hyperautomation, there becomes more and wider ranging opportunities to run a successful automation project and realize economic benefits.
However, as the scale and scope of investment in automation grows, so does visibility and scrutiny. Business leaders must build the right business case to sell the project internally, and increasingly, part of this story is selling the strategy to organizational leaders and the associated teams charged with implementation. One way of becoming ready to have these conversations is to ensure that the team driving the automation project has thought holistically about the value it is meant to deliver. Yes, this sounds simple and obvious, but there are several key factors that contribute to the entire economic value of an automation project.
Here are seven key considerations that should be evaluated when understanding the value that automation can deliver:
- Identify the right measurements
First, define what success looks like. The most straightforward way to achieve this is with a top-level goal. This is a key metric where the economic value of automation, in theory, should be easy to calculate, simple to define and easily understood within the organization. For example, a large healthcare insurance provider may want to increase claim automation rates or operational first pass rates from 65% to 85% within the calendar year. This kind of clear example helps teams know how to measure the benefits of the automation project from the start, keeping the team laser focused on a specific goal from implementation through completion.
- Think about acquisition cost
How much do the software, robots, training, initial implementation and automation discovery cost? Are there benefits that ML and AI can provide when determining which tasks and processes are prime candidates for automation? What about analytics, is the right data available for a dashboard? Ensure that based in this initial acquisition cost, your organization can quickly determine which projects offer the most benefit from a time and processing perspective so that project selection can be prioritized to maximize value.
- Understand your labor costs
How much labor will be saved with the implementation of automation? What is the value of freeing up employees to perform more complex tasks? Ask these questions, in addition to understanding the value of removing repetitive tasks. How can implementing a digital worker enable your existing employees to be more effective in their current roles? Knowing the cost in both time saved and compute resources will allow for a calculation of the economic and productivity benefits.
- Determine ongoing costs
Implementing a successful automation project does not allow for a single implementation mentality. The world is constantly changing and evolving—regulations, business processes, new competitors and more all drive change and automation must be continually invested in to remain efficient and effective. In addition to software maintenance, plan on ongoing development, implementation of increasingly complex logic, the need to expand the scale of the software automation to processes more activities and the need to grow and train existing and new developers.
- Understand the competitive landscape
Competing in dynamic markets implies the need to continually raise the bar in terms of productivity and services offered. Speed for many organizations is viewed as a competitive advantage. When processing claims, approval and successful payment is critical in retaining customers. What new features and capabilities does your market require? Do customers need more notification? Do organizations need to communicate on all phases of the automation lifecycle? Have your customers’ expectations around customer service and communication increased? Automation can help serve the needs of providing more frequent customer touchpoints and help meet higher service level demands.
- Determine the customer impact
What is the cost of not meeting customer expectations? In a word, churn. Today’s marketplace offers customers endless choices and failure to meet market exceptions with regard to speed and self-service communication leads to a decrease in customer loyalty. Improving responsiveness to customers and increasing communication are benefits that automation can provide. One area that can be measured as an economic benefit is the increased retention of customers reflected by a lower churn rate. Understanding the value of each customer and accounting for improved customer retention allows organizations to have a holistic view on the automation’s value beyond internal productivity benefits and speed of processing.
- Highlight the benefits to employees
Similar to the customer impact, with today’s low unemployment and increased market competitiveness for workers, can you afford to have employees working on tasks that are repetitive and minimize engagement? A McKinsey study highlights the continued demand for technical skills and automation allows for the potential of proactively reskilling existing employees. Shifting time from repetitive tasks allows for higher level servicing of customers, additional time for training and increasing the value of the existing employees.
Rocket Software helps customers to understand the economics behind automation. Rocket is listening to our customers that need to implement and successfully measure their success in automation. To learn more about our solutions, future roadmaps or to talk in detail about how to build an economic model to value your automation investment visit us here.