Business Automation and Software Blog

What is the Return on Investment for Business Process Automation?

Posted by Robert Baran on Tue, Feb 28, 2012 @ 08:15 AM

Many organizations are losing more money than they realize through lost productivity and redundant tasks.  It may be a good idea to perform a thorough assessment of your company’s manual processes and the time your employees are spending on them in order to evaluate your needs. This is an important step in calculating the savings that can be made through business process automation. The costs associated with defining, scoping and implementing a business process management solution will be quickly defrayed as the savings is quantified.

Take this example of a common business process:

Each week, ABC Company distributes 10 different management reports from their Enterprise Resource Planning (ERP) software. These reports communicate the changes that have occurred in the previous 7 days in regards to cash flow, stock balances, sales, purchases and overall trading.

Let’s do a quick calculation of how much this process is going to cost the business over the period of one month:

The employee that processes the reports generally spends 5 hours per day, Monday-Friday on report generation, restructure, and distribution. For the purposes of our example we will presume the employee’s fully loaded labor rate (i.e. pay rate + taxes and benefits) is $15.00 per hour.

Using these figures we can determine the following:

  • Time spent per year = 1,300 hours (5 hours X 5 days X 52 weeks)
  • Amount spent per year = $19,500 (1,300 x $15)
  • Amount spent per month = $1,625  ($19,500 / 12 months)

If this process was automated ABC Company would save $1,625 per month, and allow the employee to focus on other areas of the business. Maximizing your return from Business Process Automation requires picking the right process targets, assembling the right team and following an iterative methodology. 

PositiveVision can help you with automating your business processes. Download our whitepaper Business Process Management and the Benefits of Automation now or contact us to talk about an automation strategy for your business.

Complimentary Whitepaper ► ► Business Process Management and the Benefits of Automation

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Topics: business process automation, business management software