Gartner research indicates that nearly 70% of companies are increasingly turning to automation to streamline labor-intensive, time-consuming processes, enhance efficiency, and drive growth. But the vital question is, how can companies confidently invest in automation and trust that their investments will yield tangible returns? This is where measuring the Return on Investment (ROI) for process automation becomes essential.
Symtrax provides software solutions that deliver measurable ROI by enabling faster turnaround time (TAT), reduced errors, increased productivity, and improved resource allocation. This highlights the importance of organizations understanding how to evaluate the success of their process automation initiatives.
The Importance of Measuring ROI
Calculating ROI enables companies to justify their investment in process automation, optimize strategies and demonstrate value gains over manual processing.
“Process Automation, when implemented correctly, delivers a high ROI. According to Symtrax, businesses achieve an average ROI of 240%, typically recouping their investment within six to nine months after deployment. Top performers—companies that adhere to industry best practices—achieve an average ROI of 390% on their process automation investments.”
Understanding the Costs of Business Process Automation
Before calculating the ROI of process automation, it’s essential to have a clear understanding of the costs involved in onboarding automation solutions.
Key Metrics for Richer Analysis
Expanding the conventional ROI calculation to include overall gains ensures that qualitative and strategic benefits are thoroughly assessed. The following metrics are essential for effective calculations:
- ROI is the ratio of the annual benefits gained from automation to the total investment. Factors such as deployment time and maintenance costs are also considered.
- Total Benefits of Ownership (TBO)- This captures the total benefits derived from the automation process, highlighting qualitative impacts like increased productivity, reduced processing time, or improved customer experience.
- Total Resources Gained (TRG)- This measures the number of full-time equivalent (FTE) job positions freed up due to automation.
- Total value of ownership (TVO)- This represents the cumulative result of automation, providing a holistic view of the ROI generated from the investment.
TVO = ROI+TBO+TRG
Measuring the ROI of Automation: A Practical Framework
While the benefits of process automation are clear, justifying the investment requires a data-driven approach. Here’s a practical framework for measuring ROI:
Real-World Success Story:
A large manufacturing company implemented Symtrax’s automated invoice processing solution to streamline vendor invoice management. By calculating the ROI, the company achieved significant cost savings, reducing processing time and increased productivity.
ROI Calculation:
- Achieved break-even in 6 months
Tangible ROI
- ROI after the 1st year= 290%
- TRG= ₹30,00,000- ₹0 = ₹30,00,000
- Total Cost Savings after 1 year= ₹30,00,000- ₹1,00,000 = ₹29,00,000
Intangible ROI
- Total time saved= 66,667 hours i.e. 8,333 days
These measurable financial benefits encouraged further investments in automation across other departments, highlighting the power of effective ROI measurement for our client.
Quick Tips for Maximizing ROI on Process Automation
- Select the right processes for automation: Focus on repetitive, time-consuming tasks, error prone processes that incur high costs or demand significant resources.
- Monitor and evaluate regularly: Continuously ensure that automated processes remain effective and aligned with evolving company objectives.
- Train employees effectively: Equip your workforce with the skills and knowledge needed to maximize the potential of automation solutions.
- Ensure software scalability: Choose scalable solutions that can support business growth with minimal disruption or downtime.
- Accelerate transformation with a single-source integrator: Relying on a single vendor for all automation needs streamlines the process, leading to higher ROI and greater value. This approach eliminates the complexities and delays associated with managing multiple vendors, ensuring faster implementation and reduced operational challenges.
- Plan for the long-term: Consider how automation can continue to deliver value as your business evolves, ensuring sustained benefits over time.
- Accelerate transformation with a single-source integrator: Partnering with a single vendor for all automation needs ensures a streamlined process, resulting in higher ROI and greater value. This approach eliminates the challenges of managing multiple vendors, accelerates implementation timelines, and reduces complexity.
Plan for the long-term, considering how automation can continue to deliver value as your business needs evolve over time.
Key questions to consider when measuring ROI
- How do you measure the ROI of your automation projects?
- Which key metrics are crucial for assessing the financial impact of your automation solutions?
- How can data-driven insights enhance decision-making for future automation investments?
- What steps can you take to improve accountability in your organization’s automation initiatives?
