How to improve ROI on automation: 4 tips

How to improve ROI on automation: 4 tips

Want to achieve strong ROI on your automation project? Take these steps to avoid disappointment

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November 16, 2017
CIO IT Investments 2

Automation technologies have generated plenty of buzz during the past few years. COOs and operations teams (and indeed, other business functions) are thrilled at the prospect of being able to redefine how costs have historically increased as work volume rose.

Robotic process automation (RPA) seems to promise the Holy Grail to operations: “Our platform provides out-of-box features to meet most of your daily process needs – checking email, saving attachments, getting data, updating forms, generating reports, file and folder operations. Building bots can be as easy as configuring these features and chaining them together, rather than asking IT to build them.” It’s a seductive conversation.

Lower cost, fewer errors, better compliance with procedures – the benefits seem real and achievable to COOs and operations leaders. The fact that RPA tools promise to pay for themselves from the operational savings (with short payback periods) makes the business case even more attractive.

Automation conversations tend to follow a similar script: COOs and their teams want to know how automating operations can benefit them. They want to know about RPA platform features and capabilities, and they want to see real-world examples of automation in action. The journey from this point to a proof-of-concept implementation is often short.

[ For advice on implementing AI technology, see our related article, Crafting your AI strategy: 3 tips. ]

But the reality of automation benefits can sometimes lag behind expectations. Companies that adopt RPA may find themselves questioning its ROI after implementation. Some express disappointment about not seeing the expected savings, and confusion as to why.

Are you automating the wrong things?

What could explain the gap between the promise and reality of operational automation in these cases? To analyze this, let’s explore what typically happens after the decision to proceed with an automation proof-of-concept project (or a full-blown implementation, even) has been made.

After deciding that automation is the path to take, the COO typically asks operational leaders and their teams to decide which processes or tasks should be automated. While participation should be encouraged, this type of decision-making sometimes leads to sub-optimal choices in automation candidates. There are a few reasons for this:

First, team leaders often have a “narrow field of deep vision:” They know their processes and tasks well, but might not be deeply familiar with those that they do not participate in (especially if they have not had wide operations exposure). This means that they are able to identify good automation candidates within their own scope of work, but not necessarily across the entire operations landscape. Softer factors like “I want my process to be picked as the first automation candidate” can also come into play.

Second, candidate process selection can sometimes be driven by matching automation features and capabilities rather than by the value of automation. A common misunderstanding is that any task that includes activities like email or folder monitoring, downloads, calculations, etc. is automatically a good candidate for automation. If automating such tasks doesn’t provide value to the organization, they are not the right candidates.

So what can leaders do to ensure that their automation implementation delivers the ROI they are seeking? Take these four steps, up front: 

1. Educate your teams

It’s very likely that people in your operations team, from the COO downward, have heard of RPA and operational automation. It’s equally likely that they have many questions and concerns. It is critical to address these issues before you start your implementation.

Proactively educating the operations team can go a long way in drumming up enthusiasm and buy-in for automation. Training can focus on what automation and bots are, what role they play in a typical process, which processes and tasks are best positioned for automation, and what the expected benefits of automation are.

Recommendation: Ask your automation partner to conduct these team education sessions, with your moderation: They will likely be eager to assist. The leadership should shape the message before it is delivered to the broader team.

“The first step in automation is to get to know your processes better.”

2. Examine your internal processes

The first step in automation is to get to know your processes better. Every RPA implementation should be preceded by a process inventory, activity analysis, and cost/value mapping exercise.

It’s critical to understand where the value add (or cost, if value is unavailable) happens in the process. And this needs to be done at a granular level for each process or every task.

This will help you identify and prioritize the right candidates for automation. Because of the sheer number of tasks that can or may need to be automated, processes typically get automated in phases, so prioritization is key.

Recommendation: Set up a small working team, with participation from each group within Operations. Nominate a coordinator from each group – typically a group leader or team manager. Conduct a workshop at the group level to build the process inventory, identify candidate processes, and drive buy-in. Your automation partners are likely to have accelerators – questionnaires, scorecards etc. – that can help you speed up this activity.

3. Provide strong direction on business priorities 

Implementations often involve driving consensus (and sometimes tie-breaking) between operations teams on process selection and automation priorities, based on business value. Though team participation remains a critical part of the analysis and implementation exercises, leaders should own final decision-making.

Recommendation: Schedule regular sessions to get updates from the working teams. In addition to factors like driving consensus and buy-in, teams will also look to leaders for directional decisions on ROI, platform selection, and automation prioritization at the group level.

4. CIO and COO should drive close cooperation

Automation rollouts are much smoother when there is close cooperation between the operations and technology teams. The COO needs to help drive this coordination with the CIO’s team.

Involvement and oversight of the COO and other operations leaders are critical for successful automation implementations.

Recommendation: The COO and CIO team should set up a joint working group (a “war room”) with the third-party automation partners. Responsibilities for each participant should be clearly demarcated and tracked on an ongoing basis. Ideally, the COO and CIO should dedicate at least one resource to the group, at least during the initial rollouts.

Automation can create significant value for an organization. However, to achieve optimal returns on the investment in their automation journey, CIOs must map before they leap.

Comments 1

RPA provides many advantages

RPA provides many advantages to help businesses. However, no solution comes without potential barriers to the successful implementation of a new technology. A few roadblocks that could hinder ROI are also: lack of employee, support, selecting the wrong processes, and unrealistic expectations. Read more about RPA potential opportunities and difficulties: https://www.cigen.com.au/cigenblog/implementing-robotic-process-automati...

Rajesh Kamath heads incubation and solutions for the Financial Services business unit at Incedo Inc. a California-based technology services firm specializing in data management, product engineering and emerging technologies.

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