How do you know you need automation and evaluate its benefits?

Every business is constantly looking for ways to accelerate growth and improve efficiency, and one of the key solutions is automation. But how do you know if it's time to automate your business? We'll look at the signs that indicate the need for automation and show you how to properly evaluate the potential benefits of implementing such solutions. This article will help you make an informed decision based on specific criteria and examples.

Hi, we're from Sailet. We specialize in medium and complex development, we've been working since 2017, we've done more than 50 interesting projects and we talk about automation. And I'm Maxim Belyakov, the director of all this splendor. Having earned a bit of credibility, I'll get to the point.

• What does automation represent?
• What tasks to automate?
• How much resources and time is spent on tasks?
• How often do errors occur when completing tasks?

1. What is automation?

Automation is the replacement of manual labor. More complex, it is the integration of technological solutions to simplify and speed up work processes. It is IMPORTANT that it is not a "pill for all diseases". And it is IMPORTANT that it is not a dozen beautiful graphs that suddenly start showing numbers.

For example, if you used to count on calculators, and now you have switched to a calculator or worse Excel, then you have automated the simplest mathematical processes. If you have added formulas, you have already "embryo" of a future IS (information system). And if you also added a graph, you have almost an integrator).

Or before there was a staircase, then put an escalator, after the elevator, and then also connected all these elevators in one application, so that Igor, who maintains it, did everything on points and not when he wants, but when the elevator needs.

I think it is already clear. But, I want to draw your attention to the fact that even the simplest examples are given iteratively (sequentially). Not in such a way that first the ladder and then sharply "Matrix". I point this out because more often than the question "how much does it cost?", we hear only "can we automate the whole company at once?".

And to finalize it:
"Automating efficient operations increases efficiency, automating inefficient operations increases inefficiency." - Bill Gates

Actually, let's get down to practice.

2. Tasks, time and resources. What are the benefits of automation?

First, let's understand how to assemble a task list for automation: Start by auditing your current processes. Remember that any process consists of 5 blocks:
Purpose - what's the result of the process?
Steps - how do we achieve this result?
Participants - what roles are needed to achieve the outcome?
Tools - what do we use to get results?
Metrics - how do we know we're on the right track?

Afterward, identify the tasks that:

• Require significant time and resources;
• Often repeated;
• Have a high risk of error due to human error.

Then, calculate how much time and resources it takes to perform these tasks manually. This will help you understand the potential savings from automation.
Analyze how often errors occur in the current task process and their consequences.

Example:
Let's take the following task as an example: mailing letters. This is a routine job that a person performs. Let's assume that he spends 2 minutes on each letter, and he needs to send 240 letters every day. The person will spend 480 minutes on this = 8 hours in a day. The person also needs to be paid 5 $/hour, which adds a money factor to the resources spent.

Now let's consider this task from the side of the automated mailing process. All 240 mails are sent automatically by the system at the same time. The time consumption is only a few seconds. Let's assume that the design and implementation of the automated mailing process will take 5 days and cost 250 $.

Let's calculate the benefit (in 20 working days):

Costs = (Hours worked per day) * (Number of working days per month) * (Labor rate per hour)

A person works 8 hours a day.
Costs per day = 8 hours * 5 $/hour = 40 $
Costs per month = 40 $/day * 20 days = 800 $
Costs for automation = 250 $ (for 5 days).

Benefit of automation:

Benefit = 800 $ - 250 $ = 550 $

If you take a long-term view of automation, the benefit will grow. The longer an automated product is used, the greater its benefit.

Check out the article, you'll find it useful: "How to reduce IT development costs without losing quality?"

3. How to calculate the ROI of automation?

Return on investment in automation (ROI) is a measure of the efficiency of investment in automation projects.

ROI = (Automation Profit - Automation Costs) / Automation Costs * 100%

Let's take an example:
Profit from automation = 550 $
Cost of automation = 250 $
ROI = (550 - 250) / 250 * 100%
= 300 / 250 * 100%
= 1.2 * 100%
= 120%

In this example, the automation investment yielded a return equal to 120% of the original cost.

4. How to calculate the implicit benefit of automation?

The implicit benefits of automation are benefits that are difficult to measure or quantify, but can have a significant impact on efficiency.

Since implicit benefits are difficult to quantify, qualitative methods are often used to measure them. For example, employee surveys can be conducted before and after automation implementation to assess changes in job satisfaction.

Examples of the implicit benefits of automation:

• Improving the quality of work

Automation can lead to more consistent and higher quality products by reducing human error.

• Increased employee satisfaction

Reducing routine and reducing the workload of employees can improve their overall well-being and job satisfaction.

• Increasing customer loyalty
  

Improved product and service quality can lead to increased customer satisfaction and brand loyalty.

• Strengthening the company's image

Implementing advanced technology can improve a company's perception in the marketplace, attracting new customers and partners.

• Reducing the risk of errors

Automation reduces the likelihood of errors, which can lead to lower error correction and compensation costs.

• Increasing business flexibility

Automated systems are easier to scale and adapt to changing market conditions.

Assessing the implicit benefits requires a comprehensive approach, including data analysis, surveys, and other information-gathering techniques to capture and measure these less obvious benefits of automation.

5. Practical tips from Sailet for successful automation

The success of automation depends on many factors. The interaction and understanding between the customer and the developer also plays a big role. Automation also requires preparation.

Goal setting

Set a goal to be realized. For everything to work out, you need to understand yourself what result you expect.

For example, my goal is to automate the process of processing requests to speed up work and reduce the probability of errors. I need to clearly understand how an application is processed, all the nuances and what points in the processing need to be automated.

List of business processes

Once we have set a goal and know what we want, we need to make a list of business processes.

Let's take the same example with the automation of request processing. What items does the request processing consist of?

• Receipt of Application.
• Registration and verification of the application.
• Assignment of responsibility.
• Processing and monitoring of the application.
• Completion and notification to the client.
• Analysis and Improvement.

Analysis

Now we need to analyze all the inputs. Which of the processes will be automated and which will not? How much time is needed? What is the cost of automation?

These and other factors need to be taken into account. Read more in the article: "The cost of an IT product: from idea to market launch".

Making a plan

Make a plan to achieve the goal. We need to think through everything step-by-step. If we consider the example of processing applications, the plan will be as follows:

• Process Evaluation.
• Selecting and configuring a requisition management system.
• Integration of existing systems.
• Staff Training.
• Testing and debugging.
• Gradual implementation.
• Monitoring and optimization.
• Updating and developing the system.

Understanding desires

Here we are talking about the interaction between developers and customers. The customer must clearly communicate his wishes, and those in charge must understand and realize them. There must be a relationship of trust.

There are cases when the customer does not know what exactly he wants and asks to make it convenient and beautiful. In this case, the PM has nothing to work with, because there are no inputs. To avoid such situations, it is necessary to build a relationship.

Participation in the process

Control, observe, comment - all of these are necessary for success. When the customer takes an active part in the development process and is always in touch, it not only speeds up the process, but also provides an opportunity to control, observe and understand.

You can entrust the development process to us by leaving a request on the website. Weekly demo results, flexible payment system and full transparency of the process.