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Four ways to measure the ROI of an RPA deployment

Human error, heavy workloads, and mind-numbing processes. What do they all have in common? Robots can solve these problems. But instead of R2-D2, think RPA.

Robotic Process Automation, or RPA, is autonomous software programmed to follow rule-based tasks just as a human would. The difference is that robotic decision making and outcomes are predictable, consistent, and 100 percent accurate.

Moreover, scalability makes RPA essential in today’s business world, Sutherland RPA Center of Excellence Director Jeff Smullin says. Businesses facing linear growth gain more clients and customers, so their systems must grow accordingly with them. RPA makes that easier and more efficient, and it can save companies millions of dollars in the long run.

Companies exploring RPA find it difficult to establish ROI because traditional measures often do not justify the deployment cost, according to Institute for Robotic Process Automation and Artificial Intelligence Program Director Christopher Surdak. While the organization estimates RPA deployments bring 20 percent to 25 percent cost savings, on average, there’s more to measure than the just the financial impact.

Here are four metrics to measure the full ROI of an RPA deployment:

  1. Velocity — Measure the start time versus stop time of a back-office process before and after an RPA deployment and compare

    How much time does it take to go from an input to an output in a back-office process? How much time does the overall back-office process take? Sutherland has seen improvements of between 20 percent and 110 percent in process speed after RPA deployments. Companies can also expect improved service level agreements because robots can handle processing that used to be done manually or over several systems. Those sorts of tasks normally take days, but RPA can complete them in just hours.

  2. Productivity — Measure the length of time human workers spent on a task versus how quickly robots complete that same task
    How much time do human employees interact with technology to make a process happen? How much of that time have the robots shaved off that process? Most companies can expect an average of 70 percent reduction in manual work through a successful RPA deployment. However, Sutherland has seen productivity savings as high as 1,000 percent, particularly with retail clients. Robots cut down the time it takes to do repetitive tasks. They outwork humans as a digital workforce. They bring scalability.
  3. Quality — Measure output accuracy before and after RPA deployment — it should be 100 percent after
    Are the RPA inputs accurate? If they are, companies should see 100 percent accurate outputs because robots do not deviate from the design process, according to Sutherland. If a company has installed the correct rules, correct governances, and correct decisions, the human error is eliminated completely. Some companies measure in terms of rework, others in the cost of dissatisfaction.
  4. Compliance — Measure compliance before and after RPA deployment — it should be 100 percent after
    Are the robots making sure the rules, laws, or regulations that govern some processes always being followed? Robots can be programmed for compliance issues and will alert employees to compliance issues every time so decisions can be made safely. For example, in the insurance business and banking and finance industries, there might be three points of validation required and other compliance rules. With RPA, that compliance can be built-in. The robots will not allow anything to pass a decision point unless specifically set compliance criteria are met, eliminating human error.

Smullin says companies should expect RPA deployment and robotic development to take anywhere from six to 12 weeks, followed by a 60- to 90-day “nesting period” where vendors tweak the robots, add efficiencies, and tighten the rules and governance. After that, companies can expect to see the full ROI realization.