27 Jun ROA – Making your bots pay their way!
If you are like a lot of people, you’ve had good success in deploying bots. You’ve simplified process, improved throughput and shortened process time, maybe improved customer experience too. But how do you know the investment is paying off?
Have you considered calculating your Return-On-Automation – ROA. Similar to an ROI calculation, you consider your development effort in hours, against the tangible time saved, in hours, resulting from the automation. You can avoid a lot of cost accounting arguments this way, and make it really simple. So many hours went in to driving so many hours of activity out (that can now be returned to the business to do more important things). Your ROA is calculated by dividing the out hours by the in hours. Hard to argue with that.
And here’s the interesting part. Baking ROA into planning can become a powerful tool in building the case for more automation. If you’ve listened to the Horses for Sources soundtrack that “RPA is dead…” what they are really saying is not that RPA is dead, but rather that you will likely hit a ceiling on RPA impact if all you do is bits of tactical automation here or there. The real opportunity is taking a more strategic and broader approach. Their point is don’t put the cart before the horse, figure out your strategy and then begin the tactical deployment.
It’s a great hypothesis…and one that is probably true. But in a world of competing priorities and constrained budgets, it’s hard to call a time out to figure out your strategy. Keeping an eye on ROA, and publishing the results, can be an effective way to build momentum from initial tactical gains, that then buys you the room for a more strategic approach.
What do you do? First, pick some automation opportunity and do it. Look for something relatively simple but with a visible impact (the usual suspects include where you have dis-integrated legacy applications requiring manual intervention to complete a full business process…like transferring data from one system to another). Second, measure the outcome using ROA, and then tell the story. As you get a couple of these under your belt you are building momentum to the more strategic play (more on that later).
And here’s what happens. Your ROA gets better and better. Think about it – there are at least two variables at play – and both to your advantage. The first one is your ability to automate. You’ll get better at it each time so your relative implementation costs will go down. The second is that you’ll naturally move up the complexity/impact scale with each successful deployment. The impact (i.e. value creation through cost reduction or revenue enhancement) will be greater. You don’t have to be a math major to figure out that is the numerator is going up, and the denominator is going down…you’re on to something.
Now back to the strategic play. As your ROA improves, and you have the facts to prove it, you now have the facts to build the strategy, and sell it to your stakeholders. Your returns start to climb off the charts as you move from tactical RPA to strategic cognitive automation. Good luck climbing the curve, and of course a partner like transformAI can accelerate your journey.