Build a business case for Robotic Process Automation (RPA) and Intelligent Automation (IA)

Whilst interest in RPA | IA continues to grow, clarity on how to successfully adopt RPA | IA has not kept pace. Organisations implementing Intelligent Automation should be looking to see a 30% reduction in cost across their operations. However, the time taken to achieve return on investment from RPA | IA is one of the industry’s biggest challenges to date.

This articles discusses how organisations might build a business case to ensure the financial benefits from an IA | RPA program significantly out weight the cost of implementation and ongoing maintenance.

“The first step of the RPA and IA journey, is to create a strong business case. The business case should include specific process-candidates for automation followed by all the required metrics (volumes, cases per day, average manual handling time, peaks, forecast volumes, exception rates, etc.). It should be created along with a Partner (consulting company or a smaller boutique), for companies without any internal knowledge, since it is the first and most important step on your journey.”
Konstantinos Vogiatzakis, Global RPA Lead at Babylon Health

It is highly recommended that you engage your CFO, or a member of your finance team, to assist validate your RPA | IA business case. That way you can be more certain of the returns and costs of your entire RPA | IA program.

“The key to a great business case is getting the true financial figures quantified by your CFO. ‘How much are you willing to invest in a Platform/ Vendor / Solution?’; ‘How much are you willing to spend on a great team to deliver the solution?’; ‘What is the ROI and how long will it take to recoup your investment?’. These are the key questions you need to be able to answer and your CFO is key in helping produce those answers. If you cant answer these questions then STOP and re-evaluate your program or approach”
Graham Lee, Pundit and RPA AI/ML Artist

Step 1 – Articulate the Business Outcomes You Want to Achieve Before You Begin

In order to build a successful RPA | IA program organisations need to to clearly articulate what success looks like (i.e. as Stephen Covey says ‘always begin with the end in mind’). If you can’t articulate what success looks like just yet, then wait until you can.

“When building a robust business case for your organisations intelligent automation program your organisations RPA | IA program needs to deliver benefits in line with your organisations strategic objectives.”
Gourav Datta, RPA and Intelligent Automation Delivery Lead

Clear KPIs need to be set so that your organisation might judge its success against its own unique IA | RPA balance scoreboard. Success should include a balance of metrics uniquely weighted to your organisation’s specific goals.

Figure 1: Example Success Factors from an RPA program

Step 2 – Discovery Phase – Building a pipeline of processes suitable for RPA | IA

There are a variety of ways to obtain ideas for automation which were considered in these articles.

“It is important to select the right processes especially at the beginning and show a quick return on investment. People have found it best to start with simple processes that are visible but not very critical to the working of the group. It is better to select processes with a few exceptions paths as possible to start with. Studies also suggest that you keep away from processes that have a lot of Audit involvement in the beginning lest we end up with questions you are not ready to answer yet.

Selecting the wrong initial processes could slow down or even stop the Automation initiative. Choosing the wrong pilot process has been one of the major reasons for failed Automation initiatives. Now that we have a database of processes that are fit for RPA, It is advisable to choose the initial processes with a strong fit.”
Nandan Mullakara Strategic Advisor on Intelligent Automation | RPA | AI

Step 3 Place a monetary value against processes in their current state

Organisations may have different reasons for implementing RPA | IA (e.g. increase productivity, reduce processing time, improve process compliance, reduce headcount, etc.).

Ultimately, if an RPA | IA program does not deliver profit in excess of cost, then an organisation should invest it’s finite resources in an alternative program.

Processes can be mapped, timed (i.e. calculate time spent by a person actively completing a process) and counted (i.e. both the number of process iterations and the number of full time equivalent staff manually completing the process itself).

Figure 2: Calculating the current FTE (Full Time Equivalent) Saving from RPA

A benefits calculator can further be improved by adding a calculation to determine the likely possible % a process can be automated. For example, if only 50% of an end to end processes is automatable then divide the total possible predicted saving by 50%.

“The market has moved from pure FTE reduction as a benefit (circa 2018) to what I call derivative metrics, ie metrics derived from an intangible correlation to automation. For example, hours returned back to the business – which is a metric that does not convey direct, tangible impact to the business (ask any CFO). Or customer satisfaction is improved because CS staff have more time and hence more empathy to deal with calls, because of automation. Build business cases that get past ‘Derivative metrics’.”
Shail Khiyara, CMO | CXO | CCO – RPA & Intelligent Automation

Step 4 Place a monetary value against processes if they were redesigned for automation (but remember you will need include the costs of redesign in your business case)

Organisations often find that their processes are not immediately suitable for automation. That’s ok. By using techniques such as ‘Lean for Digital’ or ‘Design Thinking’ organisations can redesign processes for intelligent automation. For example, data from a manual form manually entered into a database by a great number of people can be replaced by an online digital form. Data can be picked up by an robot and copied into a database at a fraction of the original human cost. However, do remember to include the cost of hiring Lean or Design Thinking experts as you plan your program costs.

Step 5 Use more than RPA to support your digital transformation program

Organisations often find that RPA alone is not enough to deliver sufficient value from their Intelligent Automation program. Remember RPA is not intelligent in of itself.

“Many people view RPA as the silver bullet to automation, when in reality, RPA is a single tool we can use to solve our problems. RPA is a limited integration tool; it can’t handle everything you need it to. By combining other specialized tools and software with RPA, we create a strong foundation that is absolutely necessary to ensuring an effective RPA program.”
William Roseberry, Owner of RoseberryPi LLC

To garner excellent returns from intelligent automation firms quickly discover that an intelligent automation digital toolbox is required (e.g. OCR, AI, ML, BPM, Chatbots, Python Coders, DLLs, etc).

“Consider more than RPA. RPA and IA are means, they are not the goal in of themselves. Once you seek the opportunity to improve a certain process you need to stay open for all possible solutions, even if the solution is not automation. From a business case perspective, it is wise to compare your preferred solution with the business case of the top 2/3 alternatives. That helps in making choices in where to spend the money. “
Pieter Joosten, Dutch RPA-Booster, Lean Finance Trainer and Brainwaver

Diagram by Nandan Mullakara Strategic Advisor on Intelligent Automation | RPA | AI

It is also possible to engage a Solutions Integrator (SI) or similar expert with experience of ‘the art of the possible’ when it comes to tooling and solutioning using RPA | IA.

Don’t skimp on paying for expert help. It is better to pay an expert $50k to help get you $500k from your organisations RPA | IA program, than not have the $500k at all.

Step 6 Filter the processes you discovered to avoid automating processes that don’t deliver long term strategic value

It is possible to identify multiple benefits from process automation (see balance score card above). However, there are two key criteria your organisations should map processes against (i.e. strategic fit and financial benefit).

If activities are being undertaken that are non strategic (i.e. part of a legacy you want to leave behind) or they cost more to automate than they deliver in terms of financial value, then it is time to assess their usefulness and redirect staff to more valuable activities.

Table 1 by Nandan Mullakara Strategic Advisor on Intelligent Automation | RPA | AI

Note: Organisations are recommended to filter processes according to their unique business needs. For example, if customer or staff attrition is causing your organisation significant pain then your organisation may correctly decide that all processes should pass employee experience (EX) or customer experience (CX) filters above any other. That said it is possible to put a financial cost against both.

Step 7 Build a business case for each automation and map them onto a 2*2 value benefit matrix

Every process should have an associated business case. A Business Analyst is invaluable in helping articulate a business case.

Figure 3: Example of a high level business case template

“Management is not interested in an 80-page proposal / powerpoint why it should invest in RPA / IA. If you can’t map -show and tell it in 1 page, stakeholder approval is at stake. That’s why it is critical to build for each use case a one page high level business case reflecting the before and after situation. It delivers on the wish to track benefits.”
Pieter Joosten, Dutch RPA-Booster, Lean Finance Trainer and Brainwaver

Business cases should be presented to a governance council that independently evaluate, reject or support prioritise the order in which processes more forward.

“If your business process is vertical then you will need to get buy in from other areas. You will then need to work out how to share the cost, ROI and successes.”
Graham Lee Pundit and RPA AI/ML Artist

Step 8 Map processes onto a 2*2 complexity benefit matrix

Assuming a process is are suitable for RPA / IA it can be mapped onto a 2 *2 complexity benefit matrix and then prioritised for automation. It is key to deliver wave after wave of value from your program to evidence its worth and to maintain a momentum around your RPA | IA program at all times. Success breeds success.

Figure 4: Example 2 *2 complexity benefit matrix

Step 9 Complete a POV / POC, build an MVP, learn valuable lessons and determine if all your assumptions to date are correct

Organisations are recommended to complete a Proof of Concept (POC) to refine their initial assumptions. A POC helps an organisation understand which processes or value streams may or may not be automated and to what degree (e.g can 10% | 30% | 60% etc. of processes be automated or not?)

It is recommended that you select an RPA | IA platform best suited to your organisation goals, and not just lazily consider the ‘so called’ top 3 market vendors.

40 essential selection criteria to choose an RPA platform.

If you have no understanding or RPA | IA then is it recommended that you engage an expert systems integrator to help during your proof of concept phase. In a large organisation, using an expert consultancy, this can cost between $30-$60k.

However, a POC does not have to be expensive. For example, you might download RPA freeware, or a 30 day trial Winautomation licence from Softmotive (note: this is not a recommendation for Winautomation). Your intended vendor(s) will often complete a small POC for free.

Note from author: Vendors, please note, your telling customers that they can judge the success of your platform by automating a small task in a 3 day POC is both fallacious and dangerous. Please stop doing that.

It is highly recommended that you select a process that will test your theories and don’t automate a very simplistic task that will prove nothing or teach you very little. A well crafted POC will take 8-12 weeks. At the end of your POC, your organisation should have a well developed minimal viable product (MVP) that demonstrates the value of your program (or not!).

Regardless of whether a systems integrator (i.e. consultancy) or platform vendor is doing your POC or not, you need to be intimately involved in every aspect. The proof of concept phase is the most important part of any RPA | IA program. The POC phase is one of the times that you will learn the most about RPA | IA and your organisations readiness for an RPA | IA program.

Step 10 Determine how you might deliver your program

An organisation may decide that they wish to go alone and deliver their entire intelligent automation program with their own staff. Others may decide to seek expert help from beginning to end. Alternatively, an organisation may find it more suitable to work hand in glove with an SI and pay a set fee or work on split risk-reward basis. This cost / benefit decision will be unique to your organisation.

“Make your strategic choice…..are you going all-in (high investment, high level of effort, impact and benefits hunter) or grow as we go (start small, learn step by step, keep control internally, accept longer payback). Take into account the level of “we don’t want to depend on external consultants to keep RPA/ IA running once we really got enthusiastic.”
Pieter Joosten, Dutch RPA-Booster, Lean Finance Trainer and Brainwaver

Remember it is not possible to quickly install a digital culture or digital capabilities in a company that was not born digital. Therefore, it is often recommended that companies seek expert support to help kick start their programs and then accumulate digital capabilities over time.

Organisations can delegate digitisation, in part, to their IT team but organisations should not delegate digital transformation. Do hire digital evangelists and digital completion experts who can articulate and action the change your organisation needs to be successful.

Step 11 Determine the ‘true’ cost of you RPA Platform and Program

Before you begin your RPA | IA program you will now need to determine the true costs of the program itself. An RPA | IA platform in certainly not cheap to buy, build and maintain. Every cost needs to be account for from the very outset (e.g. robot licenses, consultancy support, POC, COE, hosting costs, bot maintenance, CISO, etc.).

Engage your finance business partner to flesh out your business case introducing a cuff and collars approach (i.e. best case and worst case so that expectations are managed correctly from the very start).

“Build all costs into your overall #RPA business case and determine if you are likely to recover that cost in advance of beginning an #RPA program e.g. infrastructure; development; maintenance; change management; consultancy; development; design, delivery, planning, testing and deployment staff; configurations costs; training costs; governance costs; preventative maintenance costs; software licences; system integrator / consultancy costs; hosting costs; management costs; SME time; preventative maintenance; process mining software; other required software costs (e.g. OCR; bot servicing; hosting, network and disk storage costs); etc.”.
Kieran Gilmurray, Global Head of Intelligent Automation

Step 12 Seek executive permission, sponsorship and funding to begin

Now that you have your benefits and costs clearly outlined by your finance CFO you can progress forward and seek both funding and executive sponsorship for your RPA | IA program.

Building a business case for an intelligent automation program is a difficult task. Your organisation must decide today, what it needs to invest in for tomorrow. Do ensure your organisation instils strong financial rigour around your program. This will help ensure your organisation delivers a excellent financial return from its investment in any RPA | IA program.

An intelligent automation program offers an excellent opportunity to re-imagine your business model to drive new revenues in new digital ways. Think forward. Redesign processes to deliver exceptional digital customer (CX) and employee (EX) experiences with your digital transformation toolkit (e.g. DevOps, RPA, AI, ML, smart workflow software, BPM, OCR, .Net, etc.).

What factors do you consider essential when building a business case for an intelligent automation program?

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Build a business case for Robotic Process Automation (RPA) and Intelligent Automation (IA)