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Building a Business Case for RPA: Defining the RPA Budget

Building a Business Case for RPA: Defining the RPA Budget

Like any other technology investment, building a business case for RPA (Robotic Process Automation) is a critical step for the project and the proper way to start your RPA journey. In this blog we’ll discuss one critical aspect in building your business case for RPA, defining the RPA budget.

The increasing speed at which emerging technologies are becoming key makes it difficult to plan ahead what will be the IT initiatives that the business will need to implement in order to stay updated on a highly competitive market.

RPA is one of those technologies that even when they have been available on the market from some time ago, may have not been seriously considered –and budgeted for- until one of the heads of department in the company communicates that he needs to implement it in order to reduce costs or improve quality and keep the pace of the business as set by the competition.

As vendors of ERP applications and automation (RPA) services, we at IT Convergence are used to face situations where a company desperately needs to leverage the benefits of RPA but has to wait until the next budgeting cycle to fund the automation project.

So accurately establishing RPA budget is key to be sure we will get the necessary budget and will be able to execute it during the next fiscal year, but at the same time we must make sure we do not overestimate the cost and risk having the project not approved.

 

RPA BUDGET: DIFFERENT APPROACHES

In order to accurately estimate the effort required to implement an RPA automation project, there are different formulas based on the parametric approach that will calculate the RPA budget required.

These formulas are usually provided by the vendors of the technology (the RPA products like UiPath or Automation Anywhere) but require a certain degree of adjustment in order to tailor the results to the reality of the company and the processes involved.

From our experience, the biggest complexity in automating processes based on ERP applications is related to the ERP applications themselves and not to the RPA tools. Developing an automation process is relatively simple and can be achieved after receiving a limited amount of training, which makes many inexperienced providers or independent vendors feel the confidence to offer RPA development services.

But while learning an RPA development tool is an easy thing to do, mastering a corporate ERP application is a little more difficult as they implement multiple layers of complexity in order to achieve their functionality and also these large applications are usually not available for vendors that do not previously have lines of businesses related to these applications and so can hardly learn about them.

This means that working with the proper vendor is key to get an accurate estimate and make sure you will have the necessary funding.

ASSESSING YOUR RPA PROJECT

Establishing the RPA budget for your project usually requires the execution of an assessment project that evaluates the different activities performed on a department and identifies good candidates for automation, that is, processes that can generate a benefit after being automated.

A good assessment will establish the right RPA budget and also identify the benefits you can obtain from this technology. These benefits are mostly related to cost reductions but there’s also another important set of benefits that come from the improvement of quality in the processes, the reduction of time required to complete the activities, and also the reduction of errors.

These benefits along with other implications (better SLA achievement, elimination of penalties due to errors in processing, better customer satisfaction, etc) are key to present you business case to your management and get the necessary funding.

This kind of assessment initiative requires working with experienced business analysts that know about your organization and industry, have extensive experience with ERP systems, can identify the need to implement changes to your processes before considering them for automation, and also have experience automating processes with RPA and other technologies.

When you combine all these elements, you can be sure that you will get an accurate estimate of the RPA budget needed for your project and also get a list of the benefits you will be able to achieve after automation.

 

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