Effort Saved Through Automation
Deb. CISSP, CISM, CISA, SABSA, TOGAF, AWS, GCP, Azure
Associate Director @ LTIMindtree | Cybersecurity Risk Mitigation
Automation has become a cornerstone of modern business operations, offering significant benefits in terms of efficiency, accuracy, and cost savings. However, one of the most critical aspects of implementing automation is measuring the actual effort saved. Calculating the effort saved through automation is essential not only for justifying the investment but also for optimizing processes and identifying further opportunities for improvement. This article provides a near-practical approach to calculating the effort saved through automation, focusing on key factors and methodologies that can be applied in real-world scenarios.
Identify the Processes to Be Automated
The first step in calculating the effort saved is to clearly identify the processes that will be automated. These processes could range from routine administrative tasks, such as data entry and report generation, to more complex activities, like customer support or IT operations. It’s important to document the current manual process in detail, including the steps involved, the time required for each step, and the frequency of the task.
For instance, if you are automating the generation of weekly reports, you would need to document how long it takes to collect data, analyze it, create the report, and distribute it. This detailed documentation serves as the baseline for measuring the effort saved once automation is implemented.
Measure the Baseline Effort
Once the processes are identified, the next step is to measure the baseline effort required to complete these tasks manually. This involves calculating the time taken to perform the tasks, the number of employees involved, and the frequency of the tasks. The effort can be quantified in terms of person-hours or Full-Time Equivalent (FTE), which represents the workload of an individual working full-time.
For example, if a task takes 2 hours to complete and is performed 5 times a week by one employee, the total weekly effort is 10 person-hours. If the task is performed by multiple employees, the effort should be aggregated to reflect the total time spent by all involved.
Determine the Effort Required Post-Automation
After implementing automation, it’s crucial to measure the new effort required to complete the same tasks. In many cases, automation will significantly reduce the time required, but it’s important to account for any remaining manual work or oversight. For instance, while a report generation process may be fully automated, there may still be a need for a final review or adjustment by an employee.
The post-automation effort should be calculated in the same way as the baseline effort, considering the time taken, the number of employees involved, and the frequency of the tasks. This allows for a direct comparison between the manual and automated processes.
Calculate the Effort Saved
With both the baseline and post-automation efforts quantified, the next step is to calculate the effort saved. This can be done using the following formula:
Effort Saved = Baseline Effort - Post-Automation Effort
For example, if the baseline effort for a task was 10 person-hours per week and the post-automation effort is reduced to 2 person-hours per week, the effort saved is 8 person-hours per week. This calculation can be extended to a monthly or annual basis to provide a more comprehensive view of the savings.
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Translate Effort Saved into Cost Savings
Effort saved can be directly translated into cost savings, which is often the most tangible benefit of automation. To calculate the cost savings, multiply the effort saved by the average hourly wage of the employees involved. This provides a clear financial metric that can be used to justify the investment in automation.
For instance, if the effort saved is 8 person-hours per week and the average hourly wage is $30, the weekly cost savings would be:
**Cost Savings = Effort Saved Hourly Wage*
**Cost Savings = 8 hours/week $30/hour = $240/week*
Over a year, this translates to a savings of:
**Annual Savings = $240/week 52 weeks = $12,480/year*
This calculation provides a straightforward way to demonstrate the financial impact of automation on the organization.
Consider Additional Benefits
While the direct effort saved is a critical metric, it’s also important to consider additional benefits that automation can bring. These may include increased accuracy, reduced error rates, faster turnaround times, and improved employee satisfaction due to the reduction of repetitive tasks. While these benefits may be harder to quantify, they contribute significantly to the overall value of automation.
Regularly Review and Optimize
Finally, it’s essential to regularly review the automation processes and the effort saved. As the business evolves, new opportunities for automation may arise, and existing processes may need to be adjusted to maximize efficiency. Continuous monitoring and optimization ensure that the organization continues to benefit from the automation over the long term.
Conclusion
Calculating the effort saved through automation is a practical and essential step in assessing the impact of automation on your organization. By identifying the processes to be automated, measuring baseline and post-automation efforts, and translating these into cost savings, businesses can gain a clear understanding of the value automation brings. Additionally, considering the broader benefits of automation and regularly reviewing the processes will ensure that the organization remains efficient, competitive, and well-positioned for future growth.
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