Tactical success is grounded on a strong understanding of the applicability of automation in your business, budgeting for the Total Cost of Ownership, computing the business case returns, leveraging applicable automation methodologies and solving specific business problems.
Executive teams and their business and technology leaders recognize the Total Cost of Ownership as a key success factor for their automation program and focus on budgeting for and managing these costs during the automation initiative to maximize returns.
The main components of the Total Cost of Ownership are:
Let’s look at these cost components more closely and identify key insights to consider.
Licensing costs include the expenses incurred to purchase or access the core components of the enterprise BPA software solution, such as BPA tools, platform and configuration management. In addition, the costs of adding a high availability disaster recovery component to help ensure business continuity.
Business and technology leaders need to consider their user group of professional or citizen developers; ease of use of automation design, deployment and management functionalities; scaling capability and more. They must also consider traditional by license and innovative free trial, pay-as-you-consume and pay-by-ROI cost models.
Licensing costs equate to roughly 21% to 24% of the Total Cost of Ownership.
Infrastructure setup costs are the costs of setting up the system, including desktops, servers, and virtual machines. The type of deployment will have a large effect on this cost. There are a variety of architecture and hosting options from fully on premises to cloud native SaaS. Each with unique security specifications.
Technology leaders should consider the operating system that the BPA vendor supports. If it only supports Windows and the existing machines run on MAC or Linux, estimating the cost of making a move to Windows is necessary. If a company opts for cloud deployment, it could save on capital expenses such as hardware. Cloud-native implementation can deliver significant Total Cost of Ownership reductions in the range of 21%-27%.
Infrastructure set-up costs equate to roughly 3% to 4% of the Total Cost of Ownership
Maintenance and support costs include the time and resources of the IT team that are allocated to installing, maintaining, and upgrading enterprise BPA software. The IT team should not be spending a lot of time on installations and upgrades.
A browser-based solution will ease the job of the IT team. But like any other IT product, your BPA solution may need occasional support. Availability and cost of support from your vendor or third-party service provider would be something to review before finalizing your solution. Let’s not forget the domain expertise of the third-party service provider.
Maintenance and support costs equate to roughly 7%-8% of the Total Cost of Ownership.
In conclusion, successful automation initiatives require careful strategic planning and superb tactical execution. Tactical success is grounded on a strong understanding of the applicability of automation in your business, the Total Cost of Ownership, the business case (ROI), automation methodologies and business problems to be solved.
Tackling these cost drivers will move your organization’s automation initiative forward, speed up implementation, reduce automation costs, address technology challenges and improve returns from the average, 24%-29%, to the extraordinary, greater than 110% across three years.
Amiseq’s Intelligent Automation practice can help you make sense of the Total Cost of Ownership. Learn more at www.amiseq.com or register for one of our Making Sense of the Total Cost of Automation webinars on our LinkedIn page. If you find this article insightful, please share, comment or like.
Author: Derek M. D’Onofrio | Director, Client Relations – Amiseq Intelligent Automation
Tactical success is grounded on a strong understanding of the applicability of automation in your business, budgeting for the Total Cost of Ownership, computing the business case returns, leveraging applicable automation methodologies and solving specific business problems.
Executive teams and their business and technology leaders recognize the Total Cost of Ownership as a key success factor for their automation program and focus on budgeting for and managing these costs during the automation initiative to maximize returns.
The main components of the Total Cost of Ownership are:
Let’s look at these cost components more closely and identify key insights to consider.
Assessment and consulting costs are the costs of engaging a suitable BPA third-party service provider or consultant to provide insight to automation strategy, technology selection, operating model design, program governance, people enablement and automation development. Costs also include automation process discovery exercises leading to automation business cases with favorable ROI calculations.
When hiring a third-party service provider or consultant, consider the amount paid for consultants compared with the cost of an in-house automation Center of Excellence (CoE). Here, the factors include the time and effort spent by the in-house automation team and analysts to identify process opportunities, build business cases, calculate ROIs and implement automation solutions. Innovative automated process discovery tools are becoming increasingly available and are enabling in-house automation teams.
Assessment and consulting costs equate to roughly 5% to 6% of the Total Cost of Ownership.
Development and deployment costs are those costs associated with developing, configuring, and moving software automations from conception to production. The cost varies based on how development is done. For example, having an in-house development team may cost less than hiring a third-party service provider. Additionally, the in-house development team may be staffed with professional or citizen developers. A citizen developer is an employee who creates application capabilities for their use or the use of others using tools that are endorsed by IT or the business unit. A citizen developer is a persona, not a title or targeted role. All citizen developers are business technologists. However, all business technologists are not necessarily citizen developers. If a development platform comes with user-friendly features, such as an easy drag-and-drop user interface, the in-house team could include business users trained to become citizen developers.
Business and technology leaders need to consider an automation operating model and for an in-house team, position descriptions, staff availability and cost. They also need to understand how easily the software solution can be integrated with existing applications. Does the integration need to be configured, or is the solution ready out of the box? Can automations and the code snippets be reused? These points can make a huge difference in development time and related costs.
Development and deployment costs equate to roughly 42% to 50% of the Total Cost of Ownership.
In conclusion, successful automation initiatives require careful strategic planning and superb tactical execution. Tactical success is grounded on a strong understanding of the applicability of automation in your business, the Total Cost of Ownership, the business case (ROI), automation methodologies and business problems to be solved.
Tackling these cost drivers will move your organization’s automation initiative forward, speed up implementation, reduce automation costs, address technology challenges and improve returns from the average, 24%-29%, to the extraordinary, greater than 110% across three years.
Amiseq’s Intelligent Automation practice can help you make sense of the Total Cost of Ownership. Learn more at www.amiseq.com or register for one of our Making Sense of the Total Cost of Automation webinars on our LinkedIn page. If you find this article insightful, please share, comment or like.
Author: Derek M. D’Onofrio | Director, Client Relations – Amiseq Intelligent Automation
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