How to Calculate ROI on Business Process Automation

Are you tired of spending countless hours on manual tasks that drain your energy and resources?

Do you want to maximize your ROI and take your business to the next level? Look no further than Business Process Automation (BPA).

BPA is a game-changer for businesses looking to streamline their processes and boost efficiency.

In this blog, we will take you through everything you need to know about BPA ROI analysis and share 2 interactive calculators that will help You build your case and get internal buy-in.

Understanding ROI on Business Process Automation

BPA optimizes workflow, enhancing efficiency and service quality while reducing repetitive tasks. Embracing no-code technology leads to substantial cost savings and creates a competitive advantage for businesses. RPA and BPM play a key role in this transformation, replacing the traditional approach with TBO strategies for long-term success. By investing less time in manual tasks, businesses can realize a significant ROI and position themselves for sustained profitability.

What is Business Process Automation?

BPA leverages machine learning to automate manual processes, including workflow automation and intelligent data entry. By eliminating rework and ensuring consistency, BPA maximizes total benefits and enhances employee satisfaction and customer experience.

The Impact of Business Process Automation on Businesses

Improving business processes through automation enhances productivity and efficiency, leading to tangible cost benefits. It also ensures regulatory compliance, process improvements, and influences leadership decision-making positively. Moreover, automation optimizes human capital and saves employee time. Embracing automation technology over the traditional approach fosters a positive long-term impact on businesses.

The Role of Business Process Automation in Maximizing ROI

Embracing technology leads to improved service quality and significant cost savings, fostering better leadership team decision-making and work quality. Business process automation plays an integral role in achieving a competitive advantage, driving better service quality, customer satisfaction, and cost savings. By enabling organizations to achieve a solid business case, automation initiatives contribute to better leadership team decision-making, thus maximizing total benefits and total value of ownership.

How Business Process Automation Enhances Efficiency

Businesses can reduce labor costs, translating to improved efficiency. This technology optimizes workflow consistency, leading to enhanced customer satisfaction and regulatory compliance. Additionally, embracing automation ensures scalability and a competitive edge while significantly reducing human capital costs. By embracing a less time-consuming approach with business process automation (BPA), organizations can achieve long-term cost benefits and a more efficient workflow.

The Impact of Business Process on Profitability

By incorporating business process automation, organizations can positively influence ROI calculations and profitability metrics. This technology contributes to regulatory compliance, business processes, and scalability. Furthermore, it enhances competitive advantage, workflow automation, and operational metrics. Embracing automation results in labor cost savings, consistency, and fosters better leadership team decision-making. By improving processes and leveraging automation technology, organizations can achieve greater profitability and a competitive edge.

Measuring ROI from BPA

Measuring the returns on business process automation relies on a robust business case and best practices. Embracing automation technology elevates business process, offering long-term benefits. Such initiatives facilitate informed decision-making by the leadership team and lead to ROI from cost savings.

Additionally, process automation enhances service quality, customer satisfaction, and the calculation of ROI.

Moreover, it optimizes work quality, employee satisfaction, and metrics, fostering continuous improvement and efficiency.

Identifying Costs Involved in BPA

Embracing automation technology entails understanding the total cost of ownership and roi calculations. Business process automation requires identifying labor costs, total benefits, and regulatory compliance. Process automation involves cost savings, labor costs, and business process roi calculations. Automation technology involves quantifying the benefits of business process automation. It requires a solid business case, process improvements, and better service quality.

Quantifying the Benefits of BPA

The use of technology in automation leads to process enhancements, aids decision-making within the leadership team, and provides measurable ROI metrics. Automation initiatives also contribute to higher service quality, increased customer satisfaction, and improved business processes. Additionally, automation optimizes work quality and enhances employee satisfaction. Embracing automation technology results in less time spent on repetitive tasks and a more efficient long-term approach.

Calculating the return on investment (ROI) for business process automation involves understanding the impact on process improvements, service quality, and cost savings. Embracing automation technology requires scalable ROI metrics and regulatory compliance.

Why is Calculating ROI on BPM Projects is so Difficult?

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1. ROI Approach is wrong. Companies are looking at 1st 3 months or 12 months and strictly on direct revenue calculations.  
2. Complexity of Processes: BPM projects often involve complex business processes that span multiple departments and functions. Quantifying the impact of changes to these processes on the overall efficiency and effectiveness of the organization can be intricate..
3. Intangible Benefits: BPM projects frequently bring about intangible benefits such as improved collaboration, better decision-making, or enhanced customer satisfaction. These benefits are challenging to quantify in monetary terms, making it difficult to measure their contribution to ROI accurately.
4. Longer Time Horizons: Realizing the full benefits of BPM initiatives often takes time. Changes to processes, technology implementations, and organizational adjustments may not yield immediate results. The longer time horizons make it harder to attribute specific benefits directly to the BPM project and distinguish them from other factors influencing business performance.
5. Changing Variables:Business environments are dynamic, and various factors can change during the course of a BPM project. Economic conditions, market trends, and internal organizational changes can impact the expected returns, making it challenging to predict and measure metric accurately.
6. Data Collection and Accuracy:Gathering accurate data before and after the implementation of a BPM project is crucial for calculating ROI. However, obtaining reliable data and ensuring that it accurately reflects the impact of the BPM initiative can be a complex task.
7. Resistance to Change: Resistance to changes in processes and workflows is a common challenge in BPM projects. If employees are not fully on board with the changes, it may affect the successful implementation and, subsequently, the ROI.
8. Interconnectedness of Processes: BPM projects often involve interconnected processes within an organization. Isolating the impact of a specific change on a single process without considering its effects on other related processes can be difficult, leading to challenges in accurately attributing benefits to the BPM initiative.
9. Software and Technology Costs: It becomes complex when considering the costs associated with implementation, maintenance, and potential upgrades of these technologies. It is especially hard if You choose the wrong tools!

To overcome these challenges, organizations should carefully define their goals and metrics before embarking on BPM projects, establish clear baselines for measurement, and adopt a comprehensive approach to evaluating both quantitative and qualitative aspects of the project's impact.

There are actually 4 ROI calculations You need to do to see total picture.

4 calculations to get the final ROI analysis right (Interactive Calculators Included!)

These are the formulas that we have used for hundreds of companies around the globe.

1. ROI (Return on Investment)

ROI of business process automation is the first number.

It answers the question: what is monetary value of all hours saved when process is automated?

To do it right You need 5 costs, number of hours saved per employee and 12 months and as wells as 24 months perspective (when configuration and training is done).

Make sure you take into account all 5 costs factors.

1. Annual cost software or full techstack software cost for all employees.  
2. Cost of development. Varies greatly. No code development and configuration.
3. Costs of training. Average cost of training is $500/employee.
4. VERY OFTEN IGNORED: Internal hours cost to manage the process. Only developers can tell You the average. Usually 3-4 hours are required per month(depends on the complexity).
5. Yearly costs for support. You might still have some questions, or need help with updating the automations. (Be careful: Many agencies don't talk about it).

2. What is TRG (Total Resources Gained)?

Total Resources Gained (TRG) indicates how much annual employee capacity has been freed up through process automation.

Use our TRG (Total Resources Gained) calculator

This is an example:

Process automation should help free up 5 hours per week for employee. That means 20 hours per month or 240 hours per year.

If You have 5 employees annually You gain 1200 hours back annually.

NOTE: After 6 months we see 70% automation capacity usability,  while after 12 months you can expect 100%.

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RESOURCE: CALCULATE BOTH ROI AND TRG WITH THIS CALCULATOR

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3. TBO (Total Benefits of Ownership)

This requires full feasibility and business analyst audit.

Process Natives tried to put the most critical factors.

One method, I use it It is best to look at OKR (objectives and key results) plan for next 12-24 months and see if TBO help them to achieve You.

Search for dependencies across categories and OKRs.

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CASE STUDY: Sales OKRs and Total Benefits of Ownership that come from Process Automation.

This example will show You how to structure process automation projects to reap TBO (total benefits of ownerships).

Objectives and Key Results (OKRs) is the method

Let' say Your Objective is to increase revenue in the next 12 months. You have 3 key results:

1. Hire more sales reps (3-5 more) and onboard them fast.
2. Shorten sales cycle from 90 days to 60 days.
3. Boost Average Transaction Value by 10%.

In the image below You see that we would be looking at 3 categories of benefits AND see

11 Benefits  that is nice number for Your 1 Goal.

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If You decide to work with Process Native, we would start with your key results and then adapt the Requirements of Process Automation project.

Critical: NOT every provide of process automation implementation would provide all benefits.

For example, automating your sales pipeline DOES not directly mean You would get access to strategic KPIs.

Process Natives puts emphasis on increasing total benefits of ownerships, therefore we look across all the categories of benefits.

LESSON: Total Benefits of Ownership are easier to reach if you have specific goals - OKRs. Otherwise they would be very generic and not relevant.

They would still be benefits, yes. But You want process automation benefits to work for Your OKRs.

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RESOURCE: CALCULATE TBO using this calculator

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4. TVO (Total Value of Ownership)

Final calculation You have to do it TVO.

The formula is NOT strictly mathematical. But it also allows to grasp true value of the project.

TVO= ROI (monetary value of hours gained) +TBO (Total Benefits of Ownership) + TRG ( Total resources gained/annual hours)

Now You see a full picture!

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Long Term ROI Metrics in BPA

Unleashing sustainable success lies in uncovering long-term ROI metrics. Embrace strategic measurement to optimize initiatives and maximize its value. These metrics evaluate total benefits, scalability, and empower your organization with actionable insights. Within NLP, the traditional approach is being challenged by RPA and BPM, offering TBO like never before.

90 Days or Less:  Low-Hanging Fruit

Embrace a time-sensitive approach for immediate business impact. Identify low-hanging opportunities for process improvements. Achieve quick wins with business process automation, realizing ROI in 90 days or less.  Drive tangible results within 90 days through agile initiatives with high ROI potential.

3 months to 12 months:  Scaling and Onboarding

Leverage intelligent automation technology for accelerated ROI and enhanced business process efficiency. Strategically plan and execute initiatives to maximize gains in the mid-term.

1 year to 3 years: End-to-End Automation with AI

Embracing end-to-end strategies yields sustained ROI within 1 to 3 years, ensuring enduring business impact and substantial ROI. Leveraging comprehensive solutions drives lasting ROI gains over the 1 to 3-year horizon, implementing strategic measures for long-term value. Transformative changes and enduring business improvements are achievable through strategic end-to-end automation initiatives, positioning the organization for sustained success and growth beyond traditional approaches.

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Getting Started with BPA for Higher ROI

Eliminate mundane tasks, saving valuable time with tech. Embrace intelligent automation to reduce labor costs and enhance employee satisfaction. Implement automated workflows for improved service, cost-effectiveness, and a competitive edge.

10 Steps to Implement HIGH ROI BPA

1. Identify opportunities to streamline business operations effectively. Assess process viability.
2. Align Total Benefits of Ownership with  OKRs (Objectives and Key results).
3. Choose no code or low code tools that will cut Your costs.
4. Utilize machine learning and AI for simplified data entry and document processing.
5. Enchance processes with Voice capabilities.
6. Ensure compliance, scalability, and consistency.
7. Present ROI using the right calculations to gain leadership buy-in. You can get full ROI analysis from Process Natives when You signup for OpsAmplifier program.
8. Make sure that configuration brings more visibility and reports on KPIs. Data capabilities is one of the main winners in Total Benefits of Ownership.
9. Always include new employees onboarding structure and knowledge base about automated process. That helps with business scalability.
10. NEVER save on training.
11. When automating across departments, consider long-term Process Center of Excellence initiative.
12. Always have a a dedicated Process Champion.

Optimize human capital by automating repetitive tasks and enhancing customer experience.

Embrace less time spent on manual processes and focus on long-term gains with strategic RPA and BPM implementation.

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What is the average ROI for automation?

Average financial ROI is 250% after 6 months of deployment. However, at Process Natives our goal is to also gain 1200 hours per 5 employees team.

Use ROI calculator with TBO (total benefits of ownership) calculator and that way calculate the value.

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How do you calculate ROI for process automation?

It's important to assess financial ROI, TBO (Total Benefits of Ownership) and TRG (Total Resources Gained).

Total Benefits of Ownership can be monetised if aligned with quantified OKR (objectives and key results)

Then use all 3 formulas to get TVO (Total Value of Ownership).

Conclusion

In conclusion, BPA is a game-changer for maximizing ROI. By implementing tools and streamlining workflows, businesses can enhance efficiency, reduce costs, and improve profitability. It's all about finding the right balance between technology and human resources to achieve optimal results.

Just like the real-world examples we discussed, businesses across various industries have experienced remarkable returns on investment through BPA. Whether you're a tech company or a manufacturing firm, BPA can revolutionize your operations and drive growth.

So, why wait? Start by identifying the costs and quantifying the benefits of BPA, then measure your ROI using the formula we provided. With a strategic approach and a commitment to workflow optimization, you can unlock the full potential of BPA and take your business to new heights.

You get get a comprehensive ROI analysis  with a Feasability study if you go for Opsamplifier Program. Initial cost is only $1200.