ROI Calculator

How to Measure ROI for IT Process Automation project

You frequently read about the benefits of IT process automation. Articles mention hard benefits such as saving time on manual tasks, faster MTTR and also soft benefits like complying with regulations, enforcing procedures.

But to convince your management to make such an investment, you need to show ROI with concrete numbers – numbers that will specifically refer to your own operations and that can demonstrate the bottom-line value delivered by the investment.  So here’s something to get you started.

First, a disclaimer: It’s not practical to cover the details of ROI measurement in a blog post, so this will only be an appetizer.

Quantified ROI Drivers for IT Process Automation:

There are different drivers from which hard value arrives with IT automation (for now, we’ll ignore soft benefits).  Briefly, these include:

  • Mean time to resolution (MTTR) is a standard measure for how quickly the IT organization is able to respond and resolve of business service or application.  Minimizing MTTR is critical to avoid service interruptions and meeting SLA’s. 80% of the time related to MTTR is spent on identifying the problem, troubleshooting, and finding the people who should fix that problem.
  • Reduce Downtime. Calculating the cost of downtime and data loss is not a simple exercise. Some effects are more easily quantifiable than others. Still, the exercise is essential because it’s the cornerstone of the business case. To calculate the cost of downtime determine the following for each business process:  revenue losses, productivity losses, impact to customers, penalties etc..
  • Operation Costs Reduction. Manual, repetitive daily maintenance and routine IT tasks, scripting and coding, maintaining complex and expensive management tools.

 Calculating Saved Time ROI from Task Automation:

Begin with calculating the total number of tasks that takes 0-30min, 30-60min and tasks that take over an hour, the average time of each task dealt by level 1/level2 and the cost per hour of each level of staff.

It is not uncommon for a NOC to be generating thousands of alerts a day. Assuming 50 of these are physically dealt with manual operators every day and the end-to-end manual process of creating, updating and acknowledging.  These alerts and events each take an average of 20 minutes to complete, this translates to a daily savings of POTENTIAL COST SAVINGS: 0.33 * $50 * 50 = $825 or $301,125 annually.

Download this eBook How to Measure IT Process Automation Return on Investment (ROI) to learn how to increase the ROI from IT Process Automation projects by implementing a well-defined processes and deployment plan to better and efficient IT operations.