The Business Case for Thoughtful Automation
What is Thoughtful Automation?
If you read my previous article (What is Robotic Process Automation), you learned about the revolutionary technology known as RPA that is redefining the human-computer relationship. To summarize that article, software bots are now replicating what people can do on computers and removing the need for people to operate computers.
The Robotic Process Automation industry up until this point has been focused on the protocol, the layer at which bots are programmed, powered, and orchestrated. This has been immensely valuable to create this new technology that can now be scaled to the entire SMB, mid and enterprise markets.
Getting your bots into production is great, but having your bots run efficiently for the lifetime of the process is the most important aspect of automation.
Welcome to the world of Thoughtful Automation. Thoughtful Automation is the innovative new approach that is re-defining RPA and democratizing this technology for every company in the world. Instead of investing in your own automation group, a CapEx (just like companies now are investing in the cloud versus on-premise servers), you invest in a portfolio of bots, OpEx, that act as your new digital workers in the cloud that run through repetitive, tedious workflows at a fraction of your current operating expense. This is the concept of Bots-as-a-Service (BaaS).
So what is the actual cost to design, build, deploy and maintain these automations?
Here's everything you need as an organization to start building a minimum viable automation capability:
- 1x Program Lead — runs the automation program and coordinates activities.
- 1x Process Analyst — designs the process workflow functional specs for engineering.
- 1x Pipeline Analyst — builds the pipeline of automation opportunities; performs ROI analysis.
- 2x Automation Engineers — develops, deploys, and maintains the bots.
- 4x IT Administrators — manage cloud, infrastructure, and control.
So what's that going to cost you on an annual basis?
The team above will cost you in the range of $850K-$1.15M per annum. This team will be able to deliver 14-16 bots per year. Without any 3rd-party licensing, server costs, etc., the team cost alone per bot is ~ $66,000 per bot.
Now let's add all the 3rd-party fees to run your bots:
- Legacy RPA technology provider license fee: $8,000 per bot
- Legacy RPA technology orchestrator fee: $1,500 per bot
- Legacy server costs: $12,000 per bot
In total, you're looking at a cost of $87,500 per bot.
Now if I was investing in people or bots, would I rather hire a highly-skilled person for 87.5K per year that can think, communicate and be creative or a bot that can only run through workflows?
I believe most people at this stage of automation would rather hire a person than a bot.
What if we outsourced our automation and only payed for outcomes?
Instead of focusing on being the best RPA IT admins and being the best at running commodity servers with generic software, we instead focused on what our business differentiators are. This would free up our time to focus on better value-add business initiatives.
Thoughtful Automation brings the Program Lead, Process Analyst, Pipeline Analyst, Automation Engineer, and IT team to you on day one. No heavy investment to learn a capability. Rather, the Thoughtful Automation approach is to identify valuable automation opportunities, design, build, and deploy your bots, then host and maintain your bots, ensuring value is delivered within 3 - 6 months versus 3 - 6 years.
The Value of Thoughtful Automation
Using the SaaS model, Thoughtful Automation aligns long-term incentives to ensure value is being delivered sooner and for a longer period. Thoughtful Automation is automating and streamlining the entire automation journey so that customers realize value immediately.
In the in-house automation example above, an average bot might cost $87.5K in year one. Thoughtful Automation takes that same bot and amortizes it over 5 years or 60 months. This comes to approximately $1,500 per month to use the Bots-as-a-Service that TA provides. With that $1,500 per month you get the more important piece of automation... the maintenance and ongoing quality assurance.
A bot only provides value if it's running smoothly. To ensure this, you need an active maintenance platform that monitors breakage, triages the break to the appropriate dev resource, fixes the break, tests it, then redeploys it back into production. Thoughtful Automation is investing heavily in its core product, which is this maintenance platform.
To keep a bot up and running over the lifetime of the automation, it typically takes 5-10 hours of development effort per month to achieve this. This is why we give our customers 10 hours per month in the Bots-as-a-Service contracts (with one month of rollover), so that they have a healthy, efficient bot providing value over the long run.
The ROI for Thoughtful Automation
For this ROI calculation, we're using this Case Study.
- Healthcare company was using two FTE to run their invoicing process.
- 2x FTE cost to company = $89,500 per year (fully burdened)
- Thoughtful Automation created a bot that reduced the human time spent on the process from 100% → 10% (90% times savings) and reduced the backlog to zero.
- Thoughtful Automation charged a one-time implementation fee of $7,500 and a recurring SaaS fee of $1,500 per month for this bot (charged at deployment in month two).
Year 1 ROI for Healthcare Company using Thoughtful Automation
Healthcare company total cost of ownership in year 1 (TCO) = $7,500 + ($1,500*11) = $24,000
Value realized from reduced payroll in year 1 = $90,000*.9 = $80,550
Payback period in Year 1 = 3.6 months
ROI in Year 1 = 235%
Years 2-5 ROI for Healthcare Company using Thoughtful Automation
Healthcare company TCO for years 2-5 = $72,000
Healthcare company growth of invoices sent = 15%
Value realized from reduced payroll in years 2-5 = $80,550*(1.15^1) + $80,550*(1.15^2)... = $462,548
ROI in Years 2-5 = 542%
Why automate now?
As the world's workforce adapts during the global pandemic, talent and resources are now being sourced from any location. Demand slumps and spikes are becoming harder and harder to estimate. Now is the time to invest in automation and build processes/technologies that can help your displaced workforce scale. Once demand picks back up, your company will be positioned to handle not only its existing business but also 10x more capacity by utilizing software bots to manage your workload.
About the Author
The Co-Founder and CEO of Thoughtful Automation, Alex Zekoff, has spent his career working with Fortune 50 clients developing streamlined processes, enterprise applications, and software bots. Now he wants to bring this revolutionary technology to everyone with Thoughtful Automation's revolutionary model: Bots-as-a-Service.