Slippery Slope of Overlooking SLAs in RPA projects leading to huge loss in Business Value
Mario Dominic
Founder & CEO @ Beez Innovation Labs | Talks About Clean Core & SAP BTP, Automate Desktop Less, Experience AI Agents
Welcome to our latest newsletter, where we delve into an important aspect of enterprise automation projects: Service Level Agreements (SLAs) for Robotic Process Automation (RPA).
Today, we explore how overlooking the significance of SLAs can inadvertently lead to a slippery slope. In this case, the result is substantial loss of business value and elevated hidden operation costs. So, let's dive in!
??** The Slippery Slope – Standardized SLAs not meaningful for Automation **
1.?Revised Thought Process for SLAs for RPA
SLAs form the backbone of any automation initiative by providing guidelines and expectations for performance, availability, and response times. However, it is crucial to rethink and recalibrate our approach when it comes to SLAs specifically tailored for RPA projects. In this article, we shed light on the importance of re-evaluating the traditional SLA mindset and adapting it to the unique requirements of automation-driven processes.
??** The Slippery Slope – The true cost of downtime **
2. How Automation Downtime Adversely Affects Business Value
The reliance on UI-based automation is one of the major reasons for downtime in RPA solutions. When such solutions encounter technical issues or system changes, downtime becomes a significant concern. This prolonged downtime affects business operations, resulting in severe consequences. The slippery slope is always adverse and always often overlooked.
To amplify the true impact of downtime, let's revisit our earlier example:
Average number of orders per day: 1000
Average order value: $200
Conversion rate (percentage of confirmed orders): 90%
Average profit margin: 25%
Downtime percentage: 8%
Considering the UI-based nature of the RPA solution, downtime occurs for 8% of the total time as per published industry reports. This means that during the downtime, manual intervention is required to handle order confirmations. Let us do a calculation on only the impact of downtime (and not considering the business value lost).
??** The hidden loss contributing to Business Value lost **
This impact analysis factors in the amplified impact of human effort during downtime:
领英推荐
- Total minutes of downtime per day: 115 minutes (8% of 24 hours)
Employee cost per minute during downtime: $1.50 (based on increased labor costs due to urgent manual handling)
Financial impact due to downtime per day: 115 minutes x $1.50 = $ 172.5 = $173
Financial impact due to downtime per month (considering 22 working days): $ 173 x 22 = $ 3,806
Financial impact due to downtime per year: $ 3,806 x 12 = $ 45,672
This calculation highlights one of the significant financial repercussions of relying on UI-based RPA solutions, where prolonged downtime and the increased cost of manual intervention have a substantial impact on business operations.
??** The Slippery Slope – Incorrect prioritization of Automation Fails **
3. Why an Automation That Failed to Create an Order Should Be Prioritized as a P2 Instead of P3
This is a clear slippery slope as mostly automation execution failures are treated as P3.
Prioritizing automation projects is often based on the severity of their impact on business operations. However, one common misconception is undervaluing automations that do not directly generate revenue, such as those failing to create an order. We challenge this prevailing notion and argue for the importance of assigning appropriate priority levels to all automation initiatives, irrespective of their immediate financial impact.
By understanding the amplified financial losses caused by UI-based RPA downtime and re-evaluating the prioritization framework, enterprises can make informed decisions to optimize automation initiatives and maximize their return on investment (ROI).
??** The Slippery Slope – SLAs related to downtime costs – Connect the dots **
We will now leave you to ponder?? over the relation between SLAs and loss due to downtimes. The importance of rightly defining SLAs will materialize and gain significance via this small exercise. Leave your comments?? behind if you agree to the slippage in this slippery slope.
We hope this newsletter provided you with valuable insights into optimizing SLAs for RPA projects, their critical connection to business value, and the amplified financial impact of downtime in UI-based RPA solutions. By reevaluating our approach, understanding the true impact of automation downtime, and reshaping our prioritization framework, enterprises can unlock the full potential of their automation initiatives.
We thank the subscribers for trusting us and we will come back in the next newsletter with more eye-opening insights which will help you uncover more slippery slopes in your automation implementations. By the end of the series, we will make you recover from these HUGE slippery slopes and make you realize the true intended business value.