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Four Ways to Win Executive Buy-In for Automation

Gather baseline measures, determine the right metrics, and then package them to demonstrate return on investment and business value.
Jul 27th, 2023 7:40am by
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Automation can have a positive impact on today’s organizations. Anything from streamlining software deployments to automatically remediating incidents can save costs, accelerate value and improve output. Demonstrating both current and future value to executives is a vital prerequisite for securing funding for such projects. But how do you do it?

Although the value of automation can vary, there are some basic, repeatable steps which should help to get projects off the ground. Gather baseline measures, determine the right metrics, and then package them to demonstrate return on investment (ROI) and business value. Here’s how.

Working Out a Baseline

Automating incident resolution and service requests can reduce labor costs and waiting time by up to 99%. But demonstrating value requires reporting these savings in the context of complex business workflows — sequences of human and machine-based activities. Begin by creating a baseline of the organization’s “as is” state, related to relevant key performance indicators (KPIs) for business processes and departmental functions. These will help to track the value generated by any automation project. Next, collect more detailed statistics on the workflows earmarked for automation.

For IT operations, KPIs should focus on meeting customer and internal service-level agreements (SLAs), responsiveness and cost. For IT service and incident resolution workflows, these could include mean time to completion, mean time to resolve, processing time and cost, incident response productivity and workflow productivity.

With these metrics captured, the organization can then calculate process productivity — that is, total benefit produced by a workflow over a period of time, like incidents closed per month. And they can help to compute process efficiency — total benefit produced by a workflow per person over a given time, like incidents closed per responder per month.

Four Ways to Measure the Value of Automation

Now comes the really important bit. How can this be reported to the broader business. Consider the following ways to help measure and report the value of automation projects:

  1. Value Per Automation Run

This is the simplest model for calculating the business value of automation, which assumes value is generated whenever automation runs. Consider a data-transfer job that may take a single staff member a quarter of their work hours per week without automation. From that “as is” process, they might switch to a “to be” process that takes zero human time per week, thanks to full automation. You would report that labor savings per automation run as the generated business value.

  1. More Complex Workflows

It’s important to remember that automated tasks don’t exist in a vacuum. They are part of a business workflow, with inputs, outputs and even possibly some human interaction. So showing business impact on a workflow requires calculating composite metrics, many of which can be captured in the systems that start, end or track a workflow, such as your IT service management (ITSM) system or even the inbox for an email alias.

  1. When Automation Runs Frequently 

Often automation runs much more frequently than humans have time to do it. In such a case, different measurements are required to truly capture the business value generated. Take that data-transfer job previously mentioned, which saves so much time it reduces weekly personnel costs by 99%. But consider this: It doesn’t just reduce staff costs, it also runs much faster than before, meaning the organization can increase its update frequency, from once a week to more than once daily. This could be compared to having more people manually running this job.

However, it would not make sense in this instance to report the outrageously good result if we ran this process every five minutes. This would amount to something outlandish such as labor savings of 500 employees per week. Instead, an alternative approach is required. In this case, it would eschew measuring each update execution in favor of measuring every instance of someone pulling the data as if a human had to gather fresh data right then. That would result in a more realistic value calculation of 100 hours of cycle savings.

  1. The Value of Improved Operations

Many batch processes involve validation and verification of data. An organization could measure the labor saved from replacing human toil with automation, but this would be an inadequate measure of the true potential business value. Automating validation checks could reduce liability caused by missed deadlines, for example, in which case it would be more accurate to express delivered business value as reduction in liability. Or an automated verification process could improve the quality of operations, in which case it may be better to use metrics like reduced downtime, operational cost savings or reductions in end-user on-call rotations.

Going High Level

Detailed metrics are one thing. But some executives will be satisfied with higher-level metrics to assess the impact of process automation. In this case, it’s vital to understand the relevance and contribution of those automated workflows to the top-line KPIs of the business processes they help implement. This will be highly dependent on workflow, business process and organization.

To get there, first understand the workflow in more detail. Is it a core process that helps to drive revenue, a supporting process related to business expense or cost control, or a management process linked to governance and risk reduction? Next, understand the cycle value of the workflow to be automated or the impact of its iterations. Things like cost improvements, faster processing times, improved quality and higher productivity should be linked to the business function KPIs of the process.

Finally, it’s time to analyze ROI. For a monetary calculation, consider metrics such as cost of automation, reduced costs of workflow execution and error reduction, and opportunity delivered by freeing people to work on higher-value tasks. Some calculations may want to add qualitative improvements that are harder to translate into costs, such as improved employee morale, customer satisfaction and net promoter scores.

Make It Personal

To show automation ROI, identifying the right workflow metrics and tying them to KPIs and goals for the relevant business process is a great place to start. Above all, remember to customize any approach to the relevant stakeholders, their priorities and the benefits that matter most to them. After all, it takes more than great ideas to secure funding and buy-in for process automation.

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TNS owner Insight Partners is an investor in: Pragma.
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