Determining ROI for Your RPA Project

Determining ROI for Your RPA Project

Nowadays, every business needs to reach seamless Business Process Automation and offer the best possible customer experience. In 2021, the old-school way of going by your business won’t cut it. The introduction of RPA services (Robotic Process Automation) is crucial in simplifying your business processes. Its benefits are difficult to overstate. 

Since it is non-disruptive, the implementation of RPA is not as complex as it appears to be. However, calculating the Return On Investment for RPA automation isn’t straightforward. You have to consider things that you won’t even realize are countable. Calculating the costs and gains for RPA services can put you in a pickle at times. But fret not. 

This article will shed light on everything you need to know and consider before calculating the ROI for your RPA project. 

How to Calculate ROI for your RPA Project? 

1. Determine Your Automation Goals

Before you start automating business processes with RPA services, you need to first step back and figure out what goals you want to achieve and where you want to be when you are done. Hence, find the answers to some of these questions first. 

•    What are your business goals?
•    Do these goals align with your overall business strategy?
•    What processes can you automate? 
•    What processes should you automate?
•    What are the results that you are expecting?

Find the answers to these questions, and you will have the foundation for your automation plan. You can now choose an RPA tool, outline the scope, and secure buy-in from your stakeholders. 

2. Figure Out the Scope of Your Automation Tasks

Let’s take an example to explain this point. Say you want to improve your customer experience. You can do this by improving the team’s overall efficiency. The best way to achieve that? That’s right. Automation! By having RPA services take over customer service by automating most of the process, you are freeing up your employees of mundane jobs and spending more time with the customers when they need human intervention. 

Hence, team efficiency is boosted, and RPA has done its job. However, there are two approaches that you can go ahead with when it comes to calculating the ROI for RPA services. They are:

•    You can pilot the RPA for a particular process, say manual data entry. Then, you can calculate the ROI based on the employee hours saved. This way enables you to calculate the RPA ROI almost immediately.

•    If not, you can calculate the RPA ROI in the long run instead. You can pilot RPA for a set of business processes for a certain business function. 

You May Also Like: How to Choose the Right RPA Platform for Your Business?

If you are successful with your approach, the first one will eventually transform into the second one. To optimize RPA automation, you will need to merge them into one system for high-level KPIs. Although, you need to understand that not all processes can be automated using RPA. Here are the few basic requirements the processes need to fulfill to undergo a successful RPA automation transformation. 

•    The task must be rule-based. 
•    The task in question is mundane and time-consuming.
•    The given data is standardized and structured. 
•    Presence of readable data. 

Ensure that the task you want to automate checks all these boxes, and you are good to go!

3. Determine Success Metrics And KPIs 

Now that the scope of the automation process is set, time to figure out what you expect at the end of a successful RPA automation implementation. Next, you must make these goals tangible by setting up appropriate success metrics and KPIs (Key Performance Indicators). According to studies, it has been found out that there are a minimum of four quantitative outcomes of a successful RPA implementation. Here are a few examples. 

•    Labour cost savings - To back this point up, consider a general statistic. Usually, an RPA solution uses up no more than ⅓ of the companies’ off-shore resources, and 1/10 in the case of on-shore. 
•    Time savings - You can significantly cut down on processing times with RPA bots, gaining the ability to convert tasks in seconds. 
•    Reduction in human error - Automation will leave no room for human or operational errors. Hence, you will also save the money you would otherwise have used to fix the mistake. 
•    Speed of RPA implementation - RPA is not something that will take a very long time. Successful integration and implementation of RPA services should be comfortably done in a couple of days, or worst-case scenario, a few weeks. 

Given that you take the right approach from the beginning, RPA can boost your ROI by almost 300%. This can be a tough pill to swallow, but it is. RPA automation is the way forward for any and every business. Some other benefits of RPA include improved customer experience, business agility, and the complete elimination of downtime.

4. Calculate the Value of Time Gains (VTG)

One prevalent error in the calculation of ROI is mistaking the difference between the cost of processes executed by employees and the costs of processes executed by bots for ROI. It isn’t ROI. It is simply a component on which the calculation of overall ROI depends. To put things into perspective, let’s look at the formulae. 

VTG = (EC – AC)/AC x 100%
EC = Employee costs
AC = Automation costs 

Estimation of EC or employee costs is one of the reasons why calculating ROI for RPA is so tricky. You have to consider all the direct, indirect, and miscellaneous expenses of an employee. Moreover, an employee will perform the task you want to automate for only part of the time. Hence, it would help if you calculated the FTE coefficient to calculate EC. 

Let’s take an example. Say your employee spends only 40% of their daily work hours performing the task you seek to automate. The FTE coefficient, in this case, would be 0.4.

EC = (Direct + Indirect + Miscellaneous Expenses) x FTE Coefficient
And for AC, 
AC = (Direct + Indirect Expenses) x FTE (Full Time Equivalent) Coefficient

5. Calculate the ROI for RPA

Now, all that is left is the calculation of ROI for RPA processes. You can use the below-given formula.

RPA ROI = [(VTG*AC + VOPA + VOER) – AC]/AC x 100%


Value of process acceleration (VOPA) refers to how much RPA will speed up the task that is now being automated. For example, if a process that initially took ten days is now being completed within three days, it can usher in profits. Value of error reduction (VOER) refers to the amount of money saved by industries by eliminating human error and all costs to fix those errors. By using these two new factors, you can easily calculate the ROI for your RPA services. 

Bottom Line

Calculating ROI for RPA automation can be a tough nut to crack, but it isn’t an impossible task. Follow all the steps mentioned in the above blog, and you can get by it easily. Just make sure that you don’t skip a single step, and you are all set. 

Also Read: Uipath vs Automation Anywhere vs Blueprism

Recent Comments:-

There are no comments yet.

Leave message