How To Measure RPA Success? A Guide to Robotic Process Automation Metrics

One of the coolest things I find about Robotic Process Automation development and implementation is that you can measure virtually everything.

I am not talking about the performance of bots or other highly technical metrics that can be understood only by RPA developers. I have in mind actual business- and money-related metrics that can help you measure your ROI, calculate business gains, and get a clear answer to how much (or: if) RPA automation is profitable for your company.

That’s the true beauty of RPA: being able to generate a data-based report showcasing the exact effects of automation implementation (be that saving $$$, shortening the payment cycle, or decreasing the time needed to perform processes) ready to share with your CEO, board or other stakeholders.

Below you will find the collection of RPA metrics worth considering following from the business project management and technical perspective.

Should you know all of them? Yes. You should get familiar with all the metrics below to get a better understanding of what and how can you measure in regard to RPA projects.

Should you use all of them? No. Over-measurement can be worse than no measurement at all. When you track too many metrics, you lose focus on what is essential and suffer from information overload. You should select a handful of metrics and stick to them over a more extended period of time.

It can also depend on the type of RPA project you are managing, e.g., for some projects, time-related metrics are entirely irrelevant (because the process can be executed overnight or there is no set deadline). For others, timing may be super important (e.g., due to the tight SLAs.)

Value of Time Gains (VTG) tells the difference between the cost of the process carried out by human employees versus the cost of the process carried out by RPA bots. It can be calculated with the following equation:

VTG = (EC – AC)/AC x 100%

Where:

EC = costs of the processes delivered by employees: payrolls (with leaves and holidays), taxes, costs of office and workplace (rent, utilities, etc).

AC = costs of the processes delivered by bots: license fees, cost of development, virtual machine/hosting, and maintenance.

VTG is your base metric for calculating RPA ROI.

Robotic Process Automation Return on Investment is a key business metric that should tell you how much money you saved (in other words, earn) by implementing RPA in your business.

RPA ROI is calculated using the Value of Time Gains (above).

To build a complete picture of RPA ROI, you need to take two factors into account:

Value of process acceleration

The value of process acceleration tells you how much money was gained by implementing the automation.

For example, this can be represented by the effects of shortening the client onboarding cycle: a difference between the number of clients processed before and after the automation multiplied by the average gain on one client.

Value of error reduction:

“Value of error reduction” shows how much money was saved on eliminating mistakes. It should be aligned with what’s essential in your organization.

For example, it can represent the total cost of deals lost due to errors or lengthy processing or the cost of fixing the errors manually (represented by payroll costs, e.g., 30% of 1FTE), the improved percentage of cases under SLA, improved quality of data, or anything necessary for a given process/organization.

After calculating VoPA, VoER, and VTG, we can calculate the RPA ROI as follows:

RPA ROI = [(VTG*AC + Value of process acceleration + Value of error reduction) – AC]/AC x 100%

Want to see an example? Read how our client from the finance sector achieved the 300,000% ROI (yes, you got the zeroes right!) with one RPA implementation.

Expected Business Value is an RPA metric that combines all other RPA business-related KPIs. It represents the sum of all the cost savings (from increased performance, resource utilization, and error reduction) multiplied by the average FTE costs over a given period of time.

“Gained Productivity” is one of the most common metrics companies use to measure RPA gains. It tells you how many FTEs were gained by automating a given process (or multiple processes). For example, if automation has replaced the manual work of 4 people, who would spend 2 hours of their time each day carrying out the process, the gained productivity here would be 1 FTE/month.

Business Value lost in Downtime tells you how downtime hurts your Expected Business Value.

You can calculate the Business Value lost in Downtime by subtracting the quantified downtime from your Expected Business Value over a given period of time.

This metric tells about the average cost of an error in a given automation. It should be the sum of the value lost due to downtime and the cost of working hours needed to fix the error (Break-Fix Person Hours).

It shows the difference between the estimated budget before starting to work on the project and the final budget. In RPA development (as in other types of software development), estimations usually vary from reality due to the unpredicted software issues or changes in the project during the development phase. Everything over 70% accuracy is considered acceptable.