You are not alone if you are excited about the amazing results business automation offers. Many businesses are applying RPA in different ways to create additional value, save thousands of dollars and foster cultures where their employees are able to do what they love and are not burdened with the drudgery of repetitive tasks.
As successful RPA deployments undoubtedly deliver tangible productivity gains and help your business adapt to increase competition and customer demands. However, to fully appreciate the value of RPA, companies should be keenly aware of the measures that quantify the demonstrated value of RPA. Commitment to monitoring some key performance measures in automation allows for predictable results and better overall results for your organization.
In general, RPA automation programs should have S.M.A.R.T. goals that are aligned with your company’s tactical objectives. These SMART goals should be further aligned with the 7 key performance metrics we will discuss in this report. In essence, each month, each quarter and each year, your performance in the 7 performance metrics should be reported and the results used to feed into plans to keep, change or introduce new automation functions.
Furthermore, with these 7 performance metrics in place, companies can more clearly demonstrate where RPA is providing the most impact, make evidence-based decisions for future interactions, and track their ROI.
7 Key Performance Measures:
- Less rework due to increased accuracy: Most companies understand that an unavoidable cost of doing business is human error. It is inevitable that after hours of working on a process, a document, or a deliverable, mistakes will happen. Due to “human errors” there can be significant rework (quality checks, reviews, etc.) required before a process can be considered complete. Oftentimes the answer to reducing rework is to optimize efficiencies by adding more people, revisiting processes and looking at ways to improve or eliminate waste in processes that are prone to errors. The challenge in this approach is that it is not 100% capable of eliminating errors altogether or even improving accuracy without a significant amount of time and money invested.
With RPA, you can eliminate all errors in a process. This, in essence, is the power of what RPA delivers; execution of processes end-to-end as designed, all the time, every time.
So how do you track less rework and increase accuracy? One way to track this is to measure the amount of work that normally needs to be redone due to human error as your baseline, then measure the amount of work that needs to be done after the implementation of RPA.
When you compare the amount of rework that is necessary before and after the implementation of RPA, the benefits of RPA become more tangible. In addition to the increased accuracy that RPA brings, the implementation of RPA produces an opportunity to revisit and improve bad processes. That is to say, during your RPA implementation, you and your RPA Business Analyst will review current operations, assess and optimize tasks to ensure the best possible processes are automated.
- Continuous Throughput
It is generally accepted that roles with a high frequency of repetitive tasks have the highest turnover rates. With that in mind, it has been reported that as much as 20% of an employee’s annual salary can be attributed to the cost of employee turnover. The impact of low employee retention or high turnover is shown, in part, in process throughput. Your company’s ability to churn through processes, respond to inquiries, and deliver on expectations requires efficient teams, system and processes. With high employee turnover, it has a direct impact on your continuous throughput and interns your ability to deliver through the ebbs and flows of a business. However, with automation, robots are not privy to turnover, they do not need rest or breaks like humans do and are able to work 24/7, 7 days a week if so needed.
So, how do you track continuous throughput? More specifically, how do you track the impact of automation on the throughput metric? It is recommended to compare before and after throughput and look at it from the perspective of quantity and consistency. In this comparison, measure specifically how many deliverables or processes are completed before an after automation and measured over a similar period of time looking at how well the pace of throughput remains consistent.
- Employee Satisfaction
Most organizations survey their employees with the goal of discovering areas of potential improvement, areas of success, and to uncover potential areas of human resource focus. These annual surveys take the form of online surveys made available to all employees, asking questions about their satisfaction with their work, with the reputation of the company, and their likelihood to recommend their place of work to a friend, or family member. One value of these surveys as that they can be distilled down to departments or even to specific teams. With this level of details, companies are able to start to understand why one team may be performing better versus another.
Often after the deployment of robots, surveys were done before and after the automation illustrate a rise in employee satisfaction attributed to the elimination of the manual, unpopular work. However, a key factor in getting true employee satisfaction results is dependent on your project change management and communication efforts. If changes in processes upstream or downstream are unknown to those impacted, survey results may not show true sentiments. Additionally, some employees may be uneasy about losing tasks to robots for fear of their job or reduction of their value to the organization. So clear communication as to the intent and strategy for your robot implementation is vital to ensuring employees understand why their roles are changing, what additional opportunities will be available to them and the value the bots are bringing to the overall organization’s goals.
- Increase compliance
We know the introduction of RPA is coupled with a reduction in errors related to processing execution.
Fewer errors mean fewer compliance infractions and increased compliance adherence throughout your organization. In many instances, bots have been used to protect data and allow for the rapid implementation of compliance changes. This is especially useful when new regulations such as the general data protection regulation, and its associated requirements are enforced.
As before, the measurement of compliance impacts of RPA is a before and after snapshot. Take stock of how many compliance errors occur on average during a given period of time, then after the appointment of RPA, monitor the performance and the occurrence of compliance errors to compare. It is also helpful to quantify the errors in dollar value to see the tangible savings from RPA.
- Deliverable Speed
Deliverable speed is often shown in improved customer service and felt materially in the bottom line. The faster an organization can churn through requests, processes, and respond to customer needs, the faster revenue is realised and in many cases trust between customers and services increases.
Measure velocity by the speed of processing tasks before and after your RPA deployment. If you are already tracking the amount of time it takes to manually process tasks in your organization in the form of average handling time (AHT), you are well on your way to understanding this vital statistic. As a side note, typically there is a 1 to 4 ratio between average handling time and development time. In other words, if a task takes one hour to manually execute, it will typically take up to 4 hours of RPA development time to automate. Continue to monitor your average handling time, or if not monitored introduce the metric of average handling time. Note before and after RPA implementation, assess your AHT to get a sense of how less time is required for manual management of task and conversely how quickly processes are executed with RPA.
- Labour Savings
One of the biggest misconceptions of RPA is that it is a labour force time and cost savings initiative. The fact is savings in your labour force are an inevitable positive result from RPA, however, that savings create a unique opportunity for businesses to leverage their talented, experienced and committed teams to focus on value-added work. RPA also provides an extremely helpful option during periods of high demand whereby past options have been to hire increased seasonal staff, or outsource the work too expensive supporting organizations to offload the additional peak period workload.
It is certainly a huge advantage of RPA to be able to eliminate some of the time and therefore the costs associated with employees working on the laborious manual task and allow those same employees to focus their experience and their talents on value-added work to help grow your company.
After automation to free employees to focus on value-added work, companies should measure the labour costs saved. This can be accounted for as training costs, direct salary costs or as it relates to full-time equivalents.
- Streamline Software Footprint
Until the widespread adoption of RPA, solutions that allowed for limited automation often required costly software suites, APIs or other types of software integrations, and ultimately resulted in a larger technology footprint with a difficult ROI. RPA leverages the graphical user interface (GUI) of applications and can eliminate the need for backend connected systems. The result is often reduced software footprints, primarily because backend and supporting software become redundant and therefore obsolete.
A streamlined software footprint has a direct cost impact particularly when software subscription or licensing costs are eliminated. Take stock of the software available and in use prior to RPA, and then what is required to operate the same business process after the appointment of RPA. In many instances, footprints reduce, licensing costs to reduce and simplicity in operations is achieved.
Experienced teams like the group at Impact Tactics are focused on working with organisations to deliver measurable results back by these 7 performance measures and others. If you’re ready to discuss how RPA can drive your organization forward or are interested in learning more about the performance measures shared, you are encouraged to reach out to Impact Tactics to have a discussion.