A few years ago, RPA was widely applied by businesses for their mission-critical processes because of its ability to perform tasks quickly, with 100% accuracy, and more stable than humans. According to the Deloitte Global RPA Survey 2018, by the end of 2025, RPA will reach almost universal adoption, becoming an indispensable technology trend worldwide. At present, as RPA is taking the world by storm, automation ROI now becomes the top concern for businesses besides automation ability. This article will shed light on ROI in RPA and how to measure ROI more accurately to help businesses continuously improve and optimize project efficiency.
There’s no one-size-fits-all formula
ROI (Return on investment) is a key measure for businesses to evaluate investments with real data and facilitate strategic decisions. There’re multiple methods to calculate ROI, and some common formulas include:
- Formula #1: ROI = Net Benefit ÷ Total Cost
- Formula #2: Net Benefit = Total Benefit – Total Cost
- Formula #3: ROI = Benefit/Cost
Measuring and calculating ROI for RPA projects is essential for businesses. (Source: founderjar.com).
However, attempting to apply simple formulas to RPA projects seems not to work because some intangible returns are difficult to calculate.
Hence, businesses need to interpret ROI calculations more carefully to have smarter results. It is essential to distinguish whether you want to calculate ROI for a specific process, or the whole project. Besides, including all the benefits that your business enjoys in your calculation is also a major consideration.
Then, break the formula down to have a thorough analysis of ROI for your RPA projects.
- Cost of automation tool: This is the initial cost that you have to pay when purchasing the license. It is crucial to consider the ratio of bots per automated process. While normally you can start with a one-one ratio, but chances are your vendor can minimize the number of licenses and allow one bot for various processes, so the cost can range differently.
- Cost of infrastructure: This includes the compulsory hardware, software, and networking infrastructure cost to launch the RPA solution.
- Cost of development: This cost is complex to evaluate since it varies depending on how businesses deliver automation projects. At akaBot, the automation process involves multiple critical processes such as identifying processes, process assessment, process design, process details definition, development, UAT, and hyper-care.
For the company chooses to perform the whole process itself, the cost might be relatively more expensive than partnering with a vendor since they have developed a full-scale IT team with integrated solutions to effectively support businesses. Besides, it is critically important to consider process complexity and time spent on development since it would affect the overall development cost.
- Cost of maintenance: The cost of monitoring and maintaining RPA bots and software. This includes any maintenance and upgrades of infrastructure/software/hardware during the operation.
Measuring financial advantages is the first step in assessing ROI for an RPA project. (Source: findlaw.com)
To get a complete picture of RPA’s ROI, it is also necessary to look at some potential benefits.
- Optimize Full-Time Equivalent (FTE) resources: A RPA bot can perform as many tasks as 4 FTES can achieve manually, according to Signity. Therefore, when manual processes are automated, businesses can significantly save human resources and efforts, allowing for optimized costs.
- Save FTE’s fully loaded annual cost: With RPA, virtual bots are inexpensive so businesses can save a huge amount of cost.
- Reduce task processing duration: RPA allows businesses to automate repetitive tasks with fast, robotic speed, thus significantly reducing processing time.
- Improve business operation: The combination of humans and RPA leads to greater efficiency, facilitating end-to-end business operations.
But the benefits are not only about financial saving. They are also intangible benefits, such as:
- Productivity: Evaluate whether employees can execute more amount of work in the same period.
- Quality: Keep track of errors (reduce errors/improve the accuracy)
- Efficiency: Evaluate the amount of time bots effectively perform the task.
- Employee satisfaction: Assess the level of satisfaction of the workforce.
- Customer experience: Consider whether an RPA adoption delivers a superior customer experience.
- Business agility: Consider whether the organization can adapt and adjust quickly and effectively to changes in the market.
- Business continuity: Assess whether the business can sustain critical business operations during and after the disruption.
When evaluating the effectiveness of an RPA project, in addition to cost, it is necessary to consider intangible benefits for accurate predictions. (Source: bluleadz.com).
With all the key criteria, businesses can then have a general calculation for potential RPA ROI.
akaBot is the ultimate choice for businesses to achieve maximum ROI in RPA. While most vendors increase their price by 30% this year, akaBot offers a lower cost for a license with superior features. We also carefully develop an automation roadmap beforehand to ensure ROI can be realized within a short amount of time. Not only that, we have been recognized by G2 seasonal reports 6 seasons straight with the capability to shorten the payback period, providing a competitive edge for organizations.
akaBot (FPT) is the operation optimization solution for enterprises based on RPA (Robotic Process Automation) platform combined with Process Mining, OCR, Intelligent Document Processing, Machine Learning, Conversational AI, etc. Serving clients in 20+ countries, across 08 domains such as Banking & Finances, Retails, IT Services, Manufacturing, Logistics…, akaBot is featured by Gartner Peer Insights, G2, and ranked as Top 6 Global RPA Platform by Software Reviews. akaBot also won the prestigious Stevie Award, The Asian Banker Award 2021, etc.
Leave us a message for free consultation!