Every business is constantly looking for ways to accelerate growth and improve efficiency, and automation is one of the key solutions. But how do you know if it's time to automate your business? We will look at the signs indicating the need for automation and show how to correctly assess 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, have been working since 2017, have completed more than 50 interesting projects and talk about automation. And I'm Maxim Belyakov, the director of all this splendor. Having earned a little "credit of trust", I'll get to the point.To decide whether to introduce automation, let's find out a few key things:

• What is automation?

• Which tasks should be automated?

• How much resources and time are spent on tasks?

• How often do errors occur when completing tasks?

Automation is a substitute for manual labor. If a little more complicated, it is the integration of technological solutions to simplify and speed up work processes. IT is IMPORTANT that this is not a “pill for all diseases”. AND it is IMPORTANT that these are not a dozen beautiful graphs that suddenly began to show numbers.

For example, if you used to count on accounts, and now you have switched to a calculator or worse, Excel, then you have automated the simplest mathematical processes. If you have also added formulas, then you already have the “germ” of a future IP (information system). And if they also brought out a graph, then it's almost an integrator)

Or there used to be a staircase, then they put an escalator, after an elevator, and then they also connected all these elevators into one application so that Igor, who serves him, would do everything according to the dotted lines and not when he wants, but when the elevator needs it.

I think this is already clear, but I want to draw attention to the fact that even the simplest examples above are given iteratively (sequentially). It's not like the ladder first, and then the “Matrix" abruptly. I point this out because more often than not the question is “how much does it cost?”, we only hear “is it possible to automate the whole company at once?".

And to finally fix it:

Automation of efficient operations increases efficiency, automation of inefficient operations increases inefficiency

Bill Gates wanted to kill us all with a virus

Actually, let's move on to practice.

First, let's understand how to assemble a list of tasks for automation: Start by auditing current processes. Remember that any process consists of 5 blocks:

• The goal - what is the result of the process?
• Steps - how do we achieve this result?
• Participants - what roles are needed to achieve the result?
• Tools - what do we use to achieve results?
• Metrics - how do we know that we are on the right track?

After that, identify the tasks that:

• They require significant time and resources;
• They are often repeated;
• They have a high risk of errors due to the human factor.

Then, calculate how much time and resources it takes to complete these tasks manually. This will help you understand the potential savings from automation.

Analyze how often errors occur in the current task execution process and what their consequences are. 

Example:

Let's take for example a clear task for everyone: sending letters. Let's imagine that this is a routine job that a person does. Let's say that he spends 2 minutes on each letter, and he needs to send 240 letters every day. A person will spend 480 minutes = 8 hours per day on this. A person also needs to be paid $ 5/hour, which adds a monetary coefficient to the resources spent.

Now let's look at this task from the side of the automated email distribution process. All 240 emails are sent automatically by the system at the same time. It takes only a few seconds. Let's say that the development and implementation of automatic mailing of emails will take 5 days and will cost $ 250, and you have to pay another $ 50 per month to maintain (hosting, domain, etc.).

We will calculate the benefit (in 20 working days):

Costs = (Working hours per day) * (Number of working days per month) * (Wage rate per hour)

A person works 8 hours a day.

Costs per day = 8 hours * $ 5/hour = $ 40

Monthly expenses = $ 40/day * 20 days = $ 800

Automation costs = $ 250 (one-time)

System support = $50 (month)

Benefit = $800 - $ 300 = $ 500

If we consider automation in the long term, the benefits will grow. The longer an automated product is used, the greater its benefits. Of course, ToC (full cost of ownership) is not taken into account here, with a la "improvements", servers, administration and a bunch of everything on larger projects. 

Look at the article, it will be useful to you: "How to reduce the cost of IT development without loss of quality?"

The return on investment in automation (ROI) is an indicator of the effectiveness of investments in automation projects.

ROI = (Profit from automation - Automation costs) / Automation costs * 100%

Let's go back to the example:

Profit from automation = $ 500

Automation costs = $250

ROI = (500 - 250) / 250 * 100%

= 250 / 250 * 100%

= 1 * 100%

= 100%

In this example, investments in automation brought a profit equal to 100% of the initial costs.

In any investment decision, mathematics must first come together "on paper". Therefore, always consider at least cost reduction and ROI.

And here is the basic formula that can help in making a decision:

Expediency of automation = (Cost reduction over the period × Payback period − Automation costs)/Automation costs

Where:

• Cost reduction over a period is the amount by which operating costs will decrease over a certain period after automation is implemented.
• The payback period is the time during which the return on investment in automation is expected.
• Automation costs — include all the costs of implementing and maintaining an automated solution.

If the result is above zero, automation may be justified. However, in addition to purely financial calculations, other factors should be taken into account.

And again to our example. Given:

• Cost reduction for the period (per month, we count according to the first one for simplicity): $500
• Payback period: we assume that this is 1 month, since the costs are paid off in a month.
• Automation costs: $250

We substitute it into the formula: 

Expediency = (500×1-250)/250

Expediency = (500-250)/250 

Expediency = 250/250

Expediency = 1

Thus, the result is 1, which means a 100% return on investment in automation in one month. This indicates that automation is financially feasible.

The implicit benefits of automation are benefits that are difficult to measure or quantify, but they can significantly affect efficiency.

Since implicit benefits are difficult to quantify, qualitative methods are often used to measure them. For example, you can conduct surveys of employees before and after the introduction of automation to assess changes in their level of job satisfaction.

Examples of the implicit benefits of automation:

• Improving the quality of work

Automation can lead to more stable and high quality products by reducing the human factor.

• Improving employee satisfaction

Reducing routine and reducing employee workload can improve their overall well-being and job satisfaction.

• Increasing customer loyalty

Improving the quality of products and services can lead to increased customer satisfaction and brand loyalty.

• Strengthening the company's image

The introduction of advanced technologies can improve the perception of a company in the market by attracting new customers and partners.

• Reducing the risk of errors

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

• Increasing business flexibility

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

The success of automation depends on many factors. Interaction and mutual understanding between the customer and the developer also plays an important role. Automation also requires preparation. Therefore, do not forget about the following steps.

Setting goals

Set a goal that needs to be realized. In order for everything to work out, you need to understand yourself what kind of result you expect.

For example, my goal is to automate the application processing process to speed up work and reduce the likelihood of errors. I must clearly understand how the application is processed, all the nuances and which processing points need to be automated.

List of business processes

After 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 application processing. What are the points of application processing?

• Receipt of the application.
• Registration and verification of the application.
• Appointment of the responsible person.
• Processing and monitoring of the application.
• Completion and notification of the client.
• Analysis and improvement.

Analysis

Now we need to analyze all the introductory ones. 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. For more information, see the article: “The cost of an IT product: from idea to market entry.”

Making a plan

We are making a plan to achieve the goal. We need to think through everything in stages. If we are considering an example of application processing, then the plan will be as follows:

• Evaluation of the process.
• Selection and configuration of the application management system.
• Integration of existing systems.
• Staff training.
• Testing and debugging.
• Gradual implementation.
• Monitoring and optimization.
• Updating and development of the system.

Understanding desires

Here we are talking about the interaction of developers and customers. The customer must clearly convey his wishes, and those responsible must understand and implement them. We need a trusting relationship.

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 PMu has nothing to work with, because there are no introductory ones. To avoid such situations, it is necessary to build a relationship.

Participation in the process

To control, observe, comment – all this is 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 gives the 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.

• We have listed all the key workflows.
• We have identified tasks that require significant time and resource costs.
• Tasks with a high repetition rate were noted.
• They noted tasks with a high risk of errors due to the human factor.
• We estimated how much time and resources it takes to complete the selected tasks manually.
• We calculated the cost of these resources and time for the company.
• We analyzed the frequency and types of errors in the current task execution process.
• We assessed the consequences of these mistakes for the business.
• We calculated the potential time savings and reduced resource costs after automation.
• We assessed the potential reduction of errors and improvement of the quality of work.
• We estimated the costs of implementing automation.
• We compared the costs of automation with the expected savings and improvement in the quality of work.
• We have chosen technologies and tools for automation.
• We have developed a plan for the implementation of automation, taking into account the time frame and budget.
• KPI was determined to evaluate the effectiveness of automation.
• We have planned testing of automated processes before full implementation.
• A monitoring system has been installed to monitor the operation of automated processes.
• We regularly analyzed the results of automated systems.
• Adjustments were made to improve the efficiency and quality of automation.

Following this checklist, you will be able to objectively assess which processes in your organization should be automated, as well as understand the potential benefits and payback of such investments. Some of this, of course, can and should be delegated to the contractor.

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