How do I understand that automation is needed and evaluate its benefits?

Automation is the replacement of manual labor. To put it slightly differently, it's the integration of technological solutions to simplify and speed up workflows. It's IMPORTANT to understand that automation is not a "cure-all pill." Nor is it just a bunch of fancy graphs suddenly showing numbers.

For example, if you previously counted on an abacus and switched to a calculator—or worse, Excel—you've automated basic mathematical processes. If you've added formulas, you're already building the foundation for a future IS (information system). And if you've plotted a graph, you're almost an integrator!)

Or imagine going from stairs to an escalator, then to an elevator, and finally linking all these elevators into one app so that Igor, who maintains them, follows precise instructions instead of doing things whenever he feels like it.

I think this makes sense. However, I'd like to emphasize that even these simple examples are iterative (sequential). It's not like you start with stairs and then suddenly jump to "The Matrix." I bring this up because more often than asking "how much does it cost?" we hear "can we automate the entire company at once?"

To drive the point home:
“Automation applied to an efficient operation will magnify the efficiency. Automation applied to an inefficient operation will magnify the inefficiency.” — Bill Gates

So, let's move on to practice.

First, let's understand how to compile a list of tasks for automation: Begin with an audit of your current processes. Remember, any process consists of five blocks:

• Goal — what is the desired outcome of the process?
• Steps — how do we achieve this outcome?
• Participants — what roles are needed to achieve the goal?
• Tools — what do we use to achieve the outcome?
• Metrics — how do we know we’re on the right track?

Next, identify tasks that:

• Require significant amounts of time and resources;
• Are frequently repeated;
• Have a high risk of human error.

Then, calculate how much time and resources are currently spent on manually completing these tasks. This will help you understand the potential savings from automation. Analyze how often errors occur in the current execution of tasks and what the consequences of those errors are.

Example:
Let's take email distribution as an example. This is a routine job performed by a person. Let's assume that each email takes 2 minutes to create, and 240 emails need to be sent daily. The person will spend 480 minutes = 8 hours per day on this task. Additionally, the person's labor costs $5/hour, adding a financial component to the resources consumed.

Now, let's look at this task from the perspective of an automated email distribution process. All 240 emails are automatically sent by the system simultaneously. Time expenditure — just a few seconds. Assume that developing and implementing an automatic email distribution system takes 5 days and costs $250.


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

Costs = (Hours worked per day) * (Number of working days in a month) * (Hourly wage rate)

Person works 8 hours a day.
Daily costs = 8 hours/day * $5/hour = $40
Monthly costs = $40/day * 20 days = $800
Cost of automation = $250 (for 5 days)

Benefit from automation:
Benefit = $800 - $250 = $550

If we consider automation in the long term, the benefit will grow. The longer the automated product is used, the greater the benefit.

Check out the article, it will be useful to you: "How to reduce IT development costs without sacrificing quality?"

Return on investment (ROI) in automation represents the measure of profitability of investments in automation projects.

ROI = (Profit from automation - Cost of automation) / Cost of automation * 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 investment in automation generated a profit equal to 120% of the initial costs.

Intangible benefits from automation are advantages that are difficult to measure or evaluate numerically, but they can significantly impact efficiency.

Since intangible benefits are hard to quantify, qualitative methods are often used to measure them. For instance, employee surveys can be conducted before and after automation to gauge changes in employee satisfaction levels.

Examples of intangible gains from automation include:

• Improved work quality

Automation can lead to more stable and higher product quality due to reduced human error.

• Enhanced employee satisfaction

Reducing tedious tasks and lightening employees’ workload can boost morale and overall well-being.

• Increased customer loyalty

Better product quality and service can lead to happier customers and stronger brand loyalty.

• Strengthening corporate image

Implementation of cutting-edge technologies can bolster market perception, attracting new customers and partners.

• Error risk reduction

Automation minimizes mistakes, reducing the costs of fixing errors and mitigating damages.

• Business agility enhancement

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

Assessing intangibles requires a holistic approach, involving data analysis, surveys, and other information-gathering techniques to capture and measure these less obvious benefits of automation.

Success in automation depends on multiple factors. Communication and mutual understanding between the client and developer play a significant role. Adequate preparation is also essential for successful automation.

Set the goal you want to achieve. To succeed, you need to clearly understand the result you expect.

For example, my goal is to automate the process of handling applications to speed up the work and reduce the likelihood of errors. I need to fully grasp how the application is processed, all the details, and which steps require automation.

Setting goals

After setting a goal and knowing what we want to accomplish, we need to outline the business processes involved.

Let’s take the same example of automating the application processing. What steps are involved in handling an application?

• Receiving the application.
• Registration and verification of the application.
• Assigning a responsible party.
• Processing and monitoring the application status.
• Completing and informing the client.
• Analysis and improvement.

List of business processes

Now, it’s time to analyze all the inputs. Which processes will be automated, and which ones won’t? 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".

Analysis

We need to devise a plan to reach our goal. Let's break down the steps, taking the example of processing applications:

• Process Evaluation.
• Selection and configuration of a ticket management system.
• Integration with existing systems.
• Staff Training.
• Testing and Debugging.
• Gradual Implementation.
• Monitoring and Optimization.
• System Upgrades and Expansion.

Making a plan

Here, we are discussing the interaction between developers and clients. The client must clearly communicate their desires, and the responsible parties must understand and execute them. Trust is essential for a successful collaboration.

There are instances when the client does not know exactly what they want and asks for something convenient and attractive. In such situations, an MVP is not feasible because there are no starting points. To avoid such circumstances, establishing a connection is crucial.

Understanding desires

Control, monitor, and comment—all these are vital for success. When the client actively participates in the development process and remains connected, it not only speeds up the process but also enables control, observation, and understanding.

Trust the development to us by leaving a request on our website. Weekly demos, flexible payment options, and full transparency throughout the process.

Participation in the process