McKinsey Digital has found that implementing RPA can result in an ROI of between 30 and 200 percent in just the first year! Sounds great. But how can you achieve such a result, and where to start?
This article will help you figure out the problems associated with calculating ROI in RPA projects. We will show you what results to expect, identify the factors that form ROI, and show you real examples of ROI in RPA projects.
What is RPA: Definition, Use Cases, and Tangible Benefits
Robotic process automation is the use of technology to automate business processes. By building algorithms based on a unique platform, developers provide robots with specific instructions and configure them to perform the necessary tasks.
Automation can include data processing, interactions between different digital systems, and more.
For example, your company needs to automate order processing. With the help of RPA, you can configure software robots to get the orders via email in PDF format. Every order contains a list of products that your company has to produce and deliver. The robot then adds the order in the ERP software, sends it into production and sets the date and time for delivery.
With RPA, your team will be able to significantly reduce the cost and time it takes to input invoices into your system. This way, you can save about 60 hours of labor work for one person (or around 720 hours a year). What is also critically important is that robots help to eliminate human errors.
Another example is leveraging RPA for accounting. In this case, a software robot can be configured to perform the following tasks:
- read the bank statement
- isolate specific transactions
- recreate the statement keeping only the data needed
- input this data into the accounting software
For every task, the robot operates around 10,000 statement lines with zero errors. In this case, RPA can save one week per month for two full-time employees.
Robots free humans from routine tasks and interact with data the way humans do: they interpret human actions and perform them autonomously. Retail, banks, industrial sectors most often use RPA in finance and accounting for operational tasks, procurement and in customer service.
Software robots can repeat any process if their data is structured and they have a clear repeating algorithm. For example, bots might reconcile data in formalized electronic documents but not in emails with unstructured information. You can set up software robots to simulate routine actions in the workflow.
7 Metrics to Measure when Implementing RPA
There are multiple ways to evaluate the effectiveness of robotization. But at the start, it is essential to know what to pay attention to. Here are several metrics that should change once you implement an RPA solution:
- Time. One of the main benefits of implementing RPA software is saving time. It is not a big surprise considering that a robot can do everything fast and eliminate human errors. Even the most diligent employee won’t copy a hundred questionnaires with 50 fields in each, making no mistake. And robots can do that.
- Accuracy. Robotic process automation reduces operational, data input and processing errors to zero.
- Cost savings. RPA will cost the company 3 to 10 times less than if these tasks were outsourced. Companies often have to hire new employees to control the accuracy of data input and transfer, which, in turn, leads to additional expenses. And RPA process automation helps to avoid this.
- Durability and flexibility. The robots are customizable and can work efficiently at any time and on any schedule, even 24/7.
- Implementation speed. The average time to automate a process using RPA is from several days to a couple of weeks.
- Employee motivation. Implementing RPA frees employees from tedious routine work. It allows teams to focus on more creative tasks, thus increasing employee performance and motivation. You may quickly check this by asking them to complete two questionnaires with respective questions before and after the implementation of RPA software.
- Business flexibility. The pandemic compelled every company to accelerate digital transformation, to become more agile and ready to change further. RPA allows companies to accelerate processes and quickly adapt to ever-changing conditions.
Wondering how to calculate ROI with these metrics? The easiest and most precise way to measure performance is to calculate the hours and money saved. If we know how much time a person and a robot spend on a specific task, we can calculate the hours saved. Knowing the hourly rate, we calculate the money saved. As an example, to calculate efficiency, we can use a calculator that takes into account costs associated with:
- work performed by employees;
- electronic document management;
- implementation of automation.
Knowing these indicators, we calculate the payback of the implementation.
However, each company has its own set of factors that are involved in the final calculation. You can use your performance data for internal accounting and justify the implementation of the project in the company.
Steps for a Successful RPA Implementation
We have discussed the ways the RPA software can automate and streamline business workflows, what metrics you should focus on and how to calculate ROI from them. But how to start implementing the software? And how to do it successfully?
First of all, you have to create a clear automation plan that should be based on the following points:
Ask yourself: What are my business goals? Look at your business strategy, focusing on the goals that you want to achieve with RPA. For example, your business goal is to increase your sales. In this case, your automation strategy should focus on tasks that are consistent with this goal.
Think about processes that you want to automate. Not all tasks can be automated. But with RPA, you can streamline routine tedious tasks and thus save time for the areas that can’t benefit from automation. Figure out what processes can be streamlined and prioritize them.
Ask users. Gather client stories to understand what are the current requirements of your customers. It’s valuable for your business to understand your end-users clearly and see ways they benefit from RPA automation.
Choose an RPA software. Well, here you should ask yourself and your team the following questions:
- Are you looking for an easy-to-use platform for basic automation actions or a platform for broader business needs that can scale with your business growth?
- Will the solution work in the cloud or on an internal server in the organization?
- Will the business manage the implementation, or will the IT department be responsible for programming the solutions?
- How secure is the platform?
- How quickly does the RPA vendor respond if support is needed during the initial phase of the operation?
Note: Some RPA vendors take all the steps listed above as their responsibility. They get to know your company, observe and analyze all the processes. They diagnose workflows based on their efficiency and productivity and help you decide which ones are optimal for automation.
Start implementing the software and test RPA processes. A reliable software provider will guide you through the installation and testing processes. These steps are critically important to figure out pain points, bugs and so on at the beginning.
Deploy the software. If you are satisfied with the provider, you may confirm the results and deploy the complete RPA solution.
Here you are! Delegate routine tasks to software robots and enjoy innovative work, having time to create and collaborate with your team.
In a Nutshell
Robotic process automation is a game-changer that helps to accelerate business processes by automating tedious tasks. With the proper implementation plan, you will be able to enhance company productivity and lower costs.
By focusing on the proper workflows, understanding how to justify the benefits of implementation and determining how the investment will pay off, you will get the most out of the technology and achieve tangible business growth.