Key Metrics to Measure ROI of RPA

RPA has been around for a while, but many companies are still learning how to harness its full potential. Most repetitive and time-consuming processes impede employees from doing more valuable work and are the first to be automated.

As RPA Services is more widely used within an organization, more aspects must be considered to drive the automation pipeline.

RPA The Queen of ROI

RPA is, by nature, the queen of ROI. It's easy to use, does not require existing systems changes, and inexpensive. Cloud RPA can be used as a service, and it is easy to turn on and off, just like running water. There are no fixed technology costs. The total investment includes a development project and the service fee for running the robots.

Calculate the most basic RPA ROI using the following formula:

Cost of RPA Automation (Hours spent on Manually Performing the Process * Cost of Manual Labor)

RPA ROI can be measured in weeks, months, or years depending on whether you use it as a service or license the technology. RPA projects typically pay back in 3 to 9 months. Because of the lack of flexibility to adjust the capacity to meet actual needs, the payback time for a service model is typically shorter than that for licensing technology.

Additional costs associated with RPA in-house include hiring or training experts, project management, and running automated systems. Therefore, you should consider your internal capabilities and the cost of creating them. Also, consider the areas you should focus on when setting up and managing your RPA program. So, should your focus be on reporting and analysis rather than building an internal team to develop and maintain automated systems? Let's get the answer below here!

What is the key to success in measuring?

As with any other business tool, RPA should be managed by the company strategy. If you want to be the best customer service provider in your industry, prioritize automation processes to help you achieve this goal. Simple, right? It's the first step.

RPA strategy should be drawn from your overall strategy but also clearly defined. Clear communication is essential in the responsibilities of running the program. KPIs should be chosen to meet your goals.

There have been many instances where RPA success measures did not develop. This can lead to two problems: it makes the program challenging to manage effectively and creates the support needed across the organization.

Precise results are essential when scaling the program and getting other business-level stakeholders to support it. In a situation where the people who run the initiative move jobs, it is problematic not to have a system for reporting. Also, there isn't enough evidence to show the results to the person deciding whether the program is worth their faith.

What should You measure?

The strategic goals of your automation program and the process will determine the best RPA KPIs. Below are some RPA success factors to consider.

FTE

This measure is used in RPA ROI calculations. FTE (full-time equivalent) refers to the total number of hours worked by one full-time employee over a specified time. This could be one month or one calendar year. The cost of automating a process can be compared with the cost of performing it manually. Therefore, direct cost savings can be calculated using FTE. This applies to situations when automation is not an option.

Hours-Back-to-Business

RPA automations are rarely used to make people redundant. Automating processes is not a good idea. They often hinder people from doing their core jobs. Hours-Back-to-Business is measured by assigning a value to the hours freed up for more productive work or adjusting the FTE measure to reflect the value of returned work hours.

To reap the full benefits of your free time, you need to be able to manage change. So what can be done with the time saved by eliminating a task?

Lower Quality Costs

This measures how automated a process has made correcting or eliminating mistakes easier. Quality costs are associated with detecting, preventing, and remediating problems in the process. You need to understand the cost of error if automation improves process quality. By eliminating repetitive typing errors, you can save money on purchasing processes. This includes reducing cross-checking and filling slip orders.

Lead Time & Process Optimization

The time taken from the beginning of work to the completion of the process is called the Lead Process Time. This time usually includes some waiting. Automating a process can help optimize it.

For example, you could run preliminary actions on weekends or at night to cut down on wasted time during office hours.

Accelerating Lead Time can increase throughput and, in some cases, even grow revenue. For example, RPA pre-processing can help banks handle more loan applications.

Service Availability and Customer Satisfaction

Two numbers are the easiest way to measure Service Availability. First, the reporting period is the time the service should be available. This is the agreed service duration (AST). Any downtime (DT) during this period is measured.

Service levels can fluctuate in a manual process due to key person dependence or request overload. Automating can increase service availability by freeing up capacity, resulting in increased throughput and shorter queues.

A company can extend its hours of service significantly through automation, even if it is not available 24/7. Digitalization has allowed customer service to evolve over the past few years. Online service is expected to be accessible at all times. For example, offering RPA-enabled service 24 hours a day could be a competitive advantage that should be measured. Measuring the impact of improved service available via customer experience metrics is possible.

It is sometimes difficult to include Service Availability and Customer Satisfaction in your ROI calculations. There are two options to solve this problem: You can either calculate the cost of offering the same service level without automation or estimate the business value of increasing Service Availability and customer satisfaction by X%.

Increased Business Agility

Improved business agility is an important RPA success factor. Technology rigidity and a lack of human resources are two factors that often slow down business innovation. RPA can help to increase flexibility in both these areas. It frees up time for human workers and increases technological flexibility, such as better integration. By calculating the value of strategic initiatives and incorporating business agility into your ROI calculations, you can include Business Agility.

Business Continuity measures

Today, Business Continuity is more important than ever. Reduced human dependency in critical processes can often mean decreasing risks for Business Continuity. These goals can be achieved with RPA. Calculate the downtime cost and assess the risk. How important is it to reduce or eliminate these risks?

Employee Satisfaction

Employee satisfaction is an important measure, but it's a soft one. Overworked employees are often unhappy. Automation can help alleviate their pain.

You could include employee satisfaction measures in your RPA ROI to reduce staff turnover, improve productivity, and enhance employer image, making it easier for you to acquire new skills.

Other metrics may be appropriate for your situation. However, we have found that the above applies to most RPA ROI calculations, effective KPIs, and automation pipeline prioritization criteria.