Business case for RPA
To calculate the business case for RPA you must factor in two parts: the cost part and the savings part. They are interlinked and determine each other. For example, if you have a process with a high frequency you will need more robots to execute the work. If you have a complex process that will impact the price of the implementation.
The cost part consists of three components: licenses for technology, services need to implement it and the maintenance of the solution. We have open prices policy and different licensing model to suit your needs so that part can be calculated relatively simply. Estimating the cost of implementation is a bit trickier part as it depends on multiple factors: experience of the partner, level of details you provide and the complexity of the processes in scope.
Try to provide as detailed process specification as you can because you will get more exact estimation from the partner. In the table below we provide estimations for different process complexities. This is a general rule of thumb and it serves as a guideline. Take the average man/day price in your country and you will have a general estimation of the cost to automate the process. As for maintenance you can assume 20% of the implementation cost on an annual basis.
Let’s cover the savings part of the equation. Savings will be most impacted by what process you pick for the scope. This is the most important part and good process selection is crucial.
When selecting processes, you can follow couple of important guidelines:
Focus on process with high frequency which are rule based – automating a process that executes once month won’t bring you much savings. Also processes need to be exact and rule based.
Avoid process that deal with unstructured data – unstructured data are scanned PDF’s or unstructured emails. Processes with this type of data require OCR or NLP (natural language processing) components which increases the cost significantly.
Follow the pareto principle (80/20 rule) – Don’t count on 100% automation of the process (all the different cases). Focus on the 80% of the most frequent cases, and the rest will be covered by humans. Also, you don’t have to automate the process end-to-end. Maybe you can just automate the repetitive task within it. This way you will lower the cost and simplify the maintenance.
Look at the big picture – when choosing the processes try to have a holistic approach and talk with everyone from your organization. Very often we see that the initiative comes from one department within a company and they focus only on their processes. This way you may miss some processes that can bring you large savings.
When calculating the savings, you should have three pieces of information for the process candidates: annual volume, average duration and average cost. Then we can calculate savings = volume * duration * cost. Try to create a scoring matrix and then compare all your process candidates and choose the ones that give you the biggest ROI.
With this information we can then calculate the total business case and the ROI period. One the most appealing marks of RPA is fast ROI and with the guidelines we gave you have a high chance of making a big impact in your organization.