Measuring the ROI of Automation Software

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One of the first questions that comes up when assessing the value Business Process Automation (BPA) is whether the cost is worth it? Answering this question is a crucial step in convincing managers to implement BPA software and it's important to define how it can be measured before embarking on a project. 

Identify What Can Be Measured

Being able to quantify the impact of BPA software isn't always possible. Sometimes the relationship isn't as clear as 'I paid y and profited x'. In some cases, such as employees not having to stay late to complete a project or a reduction in human error, measuring ROI is not tangible. It is important to determine where ROI is tangible and focus measures on those processes.

Don't forget to include non fiscal benefits from BPA when assessing ROI, such as the ability to retain information, capture data, and apply analytics.

Demonstrating ROI Quickly

In order to demonstrate ROI quickly it is best to first go for the low hanging fruit. Identify processes that can easily be automated and produce a immediate returns on investment, such as email automation. This can help validate the decision to automate to all stakeholders. 

Calculate Time Saved

Add up the amount of time that certain tasks take, such as data entry, and multiply it by the employee's wage in order to calculate how much money has been saved through BPA. If you are adding a self-service portal be sure to measure the reduction in calls to customer service. If you previously spent a lot of time training staff to do tasks that are now automated include this training time in any ROI calculations.

Some time saving activities may not actually be quantifiable, such as customer service and mean time to resolution, but provide value by helping businesses avoid service interruptions. 

Measure Growth

In addition to demonstrating the financial savings of BPA software it is important to account for growth or expansion that has been made possible by BPA. Look for increases in sales that can attributed to automation or increased volume. In many cases automation leads to better business analytics that can improve marketing strategies, inventory management, and other business processes. 

In the end ROI may not be a direct dollar saving, but enable you to do more with less. This is especially important for growing companies, startups, and those with limited funding. For small businesses and startups automation will indeed result in savings by not having to hire as many people.