Automation - Understanding the Costs to Automate Processes

Sometimes, businesses fail to consider all associated costs with implementing automation, and the costs mount unexpectedly. The hidden costs include system integrations, employee time spent in project meetings and related activities, support required post-go-live, use of office tools and equipment in project-related activities, consultant fees and travel costs, change management efforts, and leadership’s time required to oversee and manage automation projects.

When considering investing in an automation initiative, take the time to calculate the estimated cost to implement and maintain the automation. Then, compare this with the manual process cost and confirm if the ROI exceeds the investment.

Companies looking to scale may implement automation to reduce the number of headcounts needed as growth occurs. If this is the main objective for an automation implementation, include that benefit in the ROI analysis.

Point Solution vs. Platform Solution

Automation costs may vary depending on the type of solution implemented. The most common solutions for process automation include point and platform solutions. Between the two, the cost to implement and scale can vary greatly.

Point solutions focus on a narrow scope of automating one process. RPA is a common point solution, and there are many front-runners in the industry, including Automation Anywhere and UiPath.

These solutions are generally easier, quicker to get up and running, and much less expensive to purchase and implement. A few drawbacks to this tool are a lack of flexibility in its use and an inability to scale in larger organizations. Point solution automation works for the process initially designed for and does not easily scale across other processes without redesigning the automation flow.

Platform solutions provide robust and flexible capabilities that allow automation to scale and expand across multiple applications and workstreams. This option usually includes business rules that define how various use cases will be handled within the automation tool.

This solution type often takes longer to implement and comes with a much higher price tag than point solutions. Because platform solutions include capabilities ranging from OCR to predictive AI and can address the most complex scenarios, companies looking to scale invest in this automation option.

Required Resources (Emp + Consultant)

Implementing automation is a group effort and may include many company and third-party roles to get the project across the finish line. In the intake phase of the project, the business process experts are engaged in understanding the current process and desired future state process. Project sponsors contribute to the project's scope and the requirements-gathering phase.

Once the Requirements and Design phases are complete, the build teams perform development work based on the requirements shared by the project sponsors. Depending on the complexity of the implementation, third-party consultants are sometimes engaged to provide guidance and support during the project implementation.

When the Build phase is complete, the QA team performs QA testing to confirm the development work completed works as expected and meets the requirements provided by the business.

Assuming the QA test phase is successful, the ball is passed to the business to perform user acceptance testing (UAT) and confirm that the final solution meets the requirements submitted during the Requirements Phase. If UAT testing is successfully completed, the project is moved to the Deployment Phase, where the Build and Release teams work together to move the final product to production at the agreed-upon go-live date. The support team follows up the go-live with hype care and post-go-live support.

Of course, we need to keep in mind our teams within the organization that help us ensure we look at the overall end-to-end process through the lens of security and compliance. Suppose the process or applications impacted by the automation flow are within SOX scope.

In that case, Audit may need to review the proposed end-to-end process flow and implement controls to ensure the company stays compliant. Security will need to review the end-to-end architecture to identify any areas of concern that may expose the company to risks.

As noted above, the automation process requires skills and knowledge across many cross-functional teams within the company and outside if consultants are engaged to guide the team through the implementation phase.

Employee Change Management

With new software implementation, a certain level of change management is needed to ensure end users and impacted stakeholders are prepared to adopt the new system and the processes that follow.

The Change Management effort may include in-person training sessions, webinars, recorded how-to videos, Q&A sessions, and training guides. Significant effort is required to prepare the training content and deliver it to the intended audience. Associated costs may include training platforms, presenters, training facility costs, and travel costs for employees who need to travel to the designated training location.

A series of email updates and meeting presentations may be required to communicate the project updates to the wider audience for awareness and transparency. These efforts require time, employee resources, and some expense.

Other Required Tools/Integrations

For automation flows that cross over multiple applications, integrations may be required to keep the data flowing from end to end of the automated process. Depending on the integration type, there may be a cost involved for the integration tool or service.

Post Go-Live Support

As with any new technology implementation, support is needed for the application post go-live. Even if the automation platform is cloud based with built-in support, automation has its own unique challenges and requires regular monitoring to ensure any dependencies such as integrations, access to applications included in the automation flow, and exception handling are properly monitored and supported throughout the automation life cycle.

Exception Handling

One of the biggest misconceptions about automation is the belief that once a process is automated, it’s hands off. While the goal of automation is to relieve the manual effort required by employees, there is still a need to address issues that occur when the automation is unable to complete its assigned task. When this situation occurs, it is referred to as an Exception.

Exceptions are usually grouped by type and get assigned to the appropriate teams or departments to address the failure in the automation flow. For example, if the automation fails due to a broken integration, the Business Systems or IT team may be assigned the exception type to resolve. The act of completing this task is referred to as Exception Handling.

The cost of automation increases when employee resources are required to manually resolve exceptions generated from a break in the automation process.

In Summary

While the goal of automation is to streamline operations and reduce repetitive manual processes, this improvement does come at a cost. It is important to properly vet each potential automation candidate or process to confirm that the anticipated ROI exceeds the current cost.

The long-term investment in automation must add value to the bottom line and enable the business to scale its processes as growth occurs.