In this third instalment from our series covering the overall RPA Implementation Lifecycle, we will focus on the Benefits Assessment activity as part of the Plan phase.
RPA Implementation Benefits
The value added by implementing RPA and associated automation technologies for a firm is manifold. In both Customer value, for example monetary gain against the price of products or services offered by a firm, and Enterprise value, the value created for the firm by creating customer value in the first place.
Enterprise value is distributed amongst multiple stakeholders, such as employees (wages, benefits), owners (shareholder value), government (taxes), and lenders (interest.) A good stakeholder management approach to distribute Enterprise value is to balance the interest of different stakeholders. For example, shareholders to one side and employees, state, and enterprise, to the other side. There is more to a business than just maximising shareholder value which often leads to short-termism in their approach to value creation.
The goal for value creation through automation should not just be limited to achieving cost savings and short-term gains for shareholders but aimed towards long-term sustained benefits for all stakeholders.
The below table provides a comprehensive list of key benefits/value-adds that can be generated by implementing RPA and associated automation technologies. The benefits presented in the table are aligned to different stakeholders and highlight their key effects, metrics for validation, and indicative timescales in which they can be realised.
The benefits that can be achieved in immediate to medium term are at least to be assessed for appropriateness when selecting and prioritising automation use cases from a pipeline of automation candidates.
Return of Investment generated from implementing RPA can be determined by applying the below formula-
ROI from RPA Automation = Monetary Savings from Automation – Cost of Implementing Automation
Monetary Savings from Automation = (Hourly Time to execute a process as automated – Hourly Time to execute a process as manual) * Number of transactions * Manual labour cost per hour
Cost of Implementing Automation = DevOps Cost (Plan, Design, Develop, Test, Deploy, Run, Monitor, Optimize) + Maintenance Cost + Licensing Cost + Infrastructure Cost + Training Cost
Some of these cost elements are recurring in nature, such as licensing or maintenance cost, and so ROI can be projected and later confirmed for different time durations. For example, 1 Year, 2 Year, etc.
Please contact us at SQA Consulting, to see how we may assist your company in developing the necessary skills needed for implementing RPA projects.