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![Copyright 2016 - 18, 3nayan (3nayan.com) 3nayan
ROI | PREVENTING ATTRITION
18
Liberate people through smart process automation, thereby impacting attrition
Recruitment Cost
Recruiter output p.m. (FTE) 8
Recruiter startup time (months) 1
Lag Time for Recruiter (months)
post resignation [Same as notice
period]
2
Recruiter Annual output 72
Annual Cost of Recruiter $10,000
Revenue Loss
New Recruit Notice Period (months) 3
New Recruit (FTE) Training Period (months) 1
Min Revenue Loss Period, including training (month) 4
FTE billing rate / hour $30
Revenue Loss Per FTE per month $4,800
Revenue Loss Per Attrition $19,200
Annual Revenue Loss for total attrition $1,382,400
Saving / Cost Avoidance
% Attrition Prevented 25%
Cost Avoidance $345,600
Calculations shown are high level and directionally illustrative only
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Uploaded bySuhas Dutta
Smart Process Automation - Primer on Implementation and Return on Investment
The document discusses the process automation and digital transformation strategies employed by 3nayan, detailing implementation stages and expected return on investment (ROI). It emphasizes the role of smart process automation (SPA) in improving operational efficiency and productivity while outlining various applications and benefits of automation. The text also highlights the need for organizations to adapt through digital transformation, ultimately leading to enhanced customer experiences and organizational productivity.
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Smart Process Automation - Primer on Implementation and Return on Investment
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- 2. 1 PROCESS AUTOMATIONAND DIGITAL TRANSFORMATION (DX) 2 SMART PROCESS AUTOMATION 3 IMPLEMENTATION APPROACH 4 RETURN ON INVESTMENT 5 ABOUT 3nayan 1 2 3 4 5
- 3. Copyright 2016 -18, 3nayan (3nayan.com) 3nayan PROCESS AUTOMATION | IMPLEMENTATION STAGES 3 The implementation stages are defined, and the eco-system is impressive COGNITIVE STAGE ORCHESTRATION STAGE FOUNDATION STAGE 1 4 3 2 FrontLoadedInvestment/Complexity GROUP 2 Business Process Modelling Process Automation GROUP 1 Web Scraping Text / Numerical Analysis Data, Information Extraction Optical Character Recognition GROUP 3 Workforce Orchestration Basic Cognitive Automation Machine Learning GROUP 4 Planning Insights & Strategy Strategic Planning Decision Making Cognitive Load Shifting 1 2 3 4 5
- 4. Copyright 2016 -18, 3nayan (3nayan.com) 3nayan PROCESS AUTOMATION | IMPLEMENTATION STAGES 4 The implementation stages are defined, and the eco-system is impressive COGNITIVE STAGE ORCHESTRATION STAGE FOUNDATION STAGE 1 4 3 2 FrontLoadedInvestment/Complexity AETracker 1 2 3 4 5
- 5. Copyright 2016 -18, 3nayan (3nayan.com) 3nayan PROCESS AUTOMATION | IMPLEMENTATION AND ROI 5 But, the needs of an enterprise might be broader, and not be fulfilled by just RPA. RPA delivers the Return on Investment the fastest… Infographic courtesy: Everest Group 1 2 3 4 5
- 6. Copyright 2016 -18, 3nayan (3nayan.com) 3nayan DIGITAL TRANSFORMATION (DX)| THE NEED Has an impact on Customers, Vendors, People, Processes and Technology of an organization Customers, Vendors o Improved communications o Increased revenues and profits People o Raised workforce productivity o Engaged workforce Process and Technology o Competitive advantage through technology o Improved organization’s efficiency and reduced costs Positively Impacted Employee Morale Increased Market Share Greater Volume of Digital Traffic Increased Revenue Data courtesy: Huffington Post 1 2 3 4 5 Increased Customer Engagement
- 7. Copyright 2016 -18, 3nayan (3nayan.com) 3nayan DX | ELEMENTS 7 Digital Transformation needs to encompass the transformations of Customer Experience, Operational Processes, Business Models and Organizational Behavior. 1 2 3 4 5 NEW DIGITAL BUSINESS TOP-LINE GROWTH CUSTOMER TOUCH POINTS DIGITAL GLOBALIZATION PERFORMANCE MANAGEMENT WORKER ENABLEMENT PROCESS DIGITIZATION DIGITALLY MODIFIED BUSINESS CUSTOMER UNDERSTANDING Leading digital change requires organizations to have a vision of how to transform themselves and which digital activities represent good opportunities for the business
- 8. Copyright 2016 -18, 3nayan (3nayan.com) 3nayan ROBOTIC PROCESS AUTOMATION (SRPA) 8 SPA is more than RPA, and has more to do with Process than Automation 01 02 03 04 05 PART OF DX A TOOL TOWARDS IMPLEMENTATION OF DX, AND JUST ONE ARROW IN THE DX QUIVER NON-STOP MOVES AT THE SPEED OF BUSINESS, OPERATES 24X 7 ADAPTABILITY COMPLEMENTS THE CURRENT ENVIRONMENT, AND ADAPTS TO THE ORGANIZATION LET HUMANS BE HUMANS RE-ALLOCATES TIME FOR A BUSY WORKFORCE IMPROVE QUALITY ELIMINATES HUMAN ERRORS 1 2 3 4 5
- 9. Copyright 2016 -18, 3nayan (3nayan.com) 3nayan SPA | WHAT CAN IT DO FOR YOU 9 Rapid implementation, scalability, low invasiveness, ability to integrate and navigation through digital landscapes Read And Write Databases Log Into Applications Copy Paste Open Emails, Attachments Or Provide Standard Answers Fill In Forms, Move Files To Folders Scrape Data From Documents Extract Structured Data From Documents Make Rule Based Calculations Follow Basic Decision Rules Connect To System APIs Monitor Manual Processes And Learn How To Perform Them 1 2 3 4 5
- 10. Copyright 2016 -18, 3nayan (3nayan.com) 3nayan SPA | AREAS OF APPLICATION 10 SPA enhances performance by Rapid implementation time Scales quickly and is modifiable Non-invasive, but integrates with other systems at enterprise level Built for complexity and navigates different digital landscapes From Macros on Steroids, RPA now replicates human tasks at a rapid rate in an error free fashion Procure to Pay HR Administration Report Generation Quote to Cash Inventory Management Claims Processing Sales and Invoice Processing C O N N E C T I N G P R O C E S S I S L A N D S D I G I T A L A N D O N L I N E I N T I A T I V E S B A C K O F F I C E A D M I N I S T R A T I O N D A T A M I G R A T I O N A N D M A N A G E M E N T C U S T O M E R S E R V I C E A N D S U P P O R T D E S K I T A N D I N F R A S T R U C T U R E S U P P O R T , S M A R T P R O C E S S A U T O M A T I O N
- 11. Copyright 2016 -18, 3nayan (3nayan.com) 3nayan SPA | BEFORE AND AFTER (PO PROCESSING) RPA is a natural progress from Manual towards Cognitive computing Periodically logs into system to check for orders With another human confirmation, she validates PO Applies specific pricing & discounts to order based on client contract Applies additional discount if outlined in protocol PO shipped, invoiced with error Manual Process Software pulls data from system, checks for new PO PO downloaded and pushed automatically into legacy system Manual validation based on customer contract terms Discounts automatically applied Software uploads PO to customer system Robotics Process Automation Software pulls data from system, checks for new PO PO downloaded and pushed automatically into legacy system Customer contract processed with NLP to extract terms and match with order Discounts automatically applied Software uploads PO to customer system Cognitive Process Automation 11 Manual Automated Cognitive Computing 1 2 3 4 5 Illustrative Example
- 12. Copyright 2016 -18, 3nayan (3nayan.com) 3nayan PRESENTATION LAYER INTEGRATION PATH BUSINESS LOGIC LAYER INTEGRATION PATH SPA | IMPLEMENTATION APPROACH 12 Enterprise-wide process automation must use a balance of business layer based and presentation layer based approaches Presentation layer based integration can relatively be faster, cheaper, easier to implement, change, better to integrate. But, Business layer based integration usually performs better, data from all layers can be accessed. PROCESS ADAPTERS ADAPTERSBUSINESS LOGIC UI PROCESS application 1 application 2 application n 1 2 3 4 5 users
- 13. Copyright 2016 -18, 3nayan (3nayan.com) 3nayan SPA | IMPLEMENTATION APPROACH 3nayan recommends Considering Process Automation as part of overall Digital Transformation. Preceding PA with revisiting the business processes to simplify, standardize and industrialize them. Most manual processes exist in the operational process areas though. Starting with pilots in operational process areas where the risk and investment per process are both low, but can provide large benefits overall. The long-tail of use cases provides lower-risk opportunities for SPA implementation in most organizations 13 1 2 3 4 5 Long tail of operational processes provides an easy path into RPA RPA App-level Macros Macro Readers Core Business Processes Vital for Business Operational Processes Risk,cost Volume
- 14. Copyright 2016 -18, 3nayan (3nayan.com) 3nayan SPA| IMPLEMENTATION JOURNEY 14 The journey of process automation isn’t much different from … ASSESS For automation opportunities BUILD The business case DETERMINE The optimal operating model IDENTIFY Your automation partners PLAN The automation roadmap 1 2 3 4 5
- 15. Copyright 2016 -18, 3nayan (3nayan.com) 3nayan ROI | TOP 5 COMPONENTS 15 “an RPA software robot costs about one-third the price of an offshore full-time employee (FTE) and one one-fifth the price of an onshore worker.” – IRPAAI “45 percent of the activities individuals are paid to perform can be automated by adapting currently demonstrated technologies.” – McKinsey & Co. ROI on process automation must take into account elements other than flat cost reduction as well 03 LABOUR COST REDUCTION LESS NUMBER OF PEOPLE REQUIRED TO DO THE SAME JOB, AND PRODUCE SAME OUTPUT 01 BASIC FINANCIAL ANALYSIS STANDARD ROI FORMULA; CATCH ALL 02 BUSINESS PROCESS PROFICIENCY MORE EFFICIENT PRODUCT LINE, LESS NUMBER OF HANDOFFS 04 CYCLE TIME LESS NUMBER OF BOTTLENECKS, HIGHER FLOW RATE; MORE OUTPUT IN SAME TIME. POSSIBLE 24x7 OPERATIONS 05 CUSTOMER DELIGHT LIKELY TO LEAD TO RENEWAL OF CONTRACTS, LARGER SHARE OF WALLET, MORE REVENUE 1 2 3 4 5
- 16. Copyright 2016 -18, 3nayan (3nayan.com) 3nayan ROI | DIRECT COST TAKEOUT 16 𝑅𝑂𝐼 = 𝐺𝑎𝑖𝑛 𝑓𝑟𝑜𝑚 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 −𝐶𝑜𝑠𝑡 𝑜𝑓 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝐶𝑜𝑠𝑡 𝑜𝑓 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝐿𝑎𝑏𝑜𝑢𝑟 𝐸𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑐𝑦 = 𝐻𝑢𝑚𝑎𝑛 𝐻𝑜𝑢𝑟𝑠 𝑋 𝐻𝑢𝑚𝑎𝑛 𝑅𝑎𝑡𝑒 −(𝐵𝑜𝑡 𝐻𝑜𝑢𝑟𝑠 𝑋 𝐵𝑜𝑡 𝑅𝑎𝑡𝑒) (𝐻𝑢𝑚𝑎𝑛 𝐻𝑜𝑢𝑟𝑠 𝑋 𝐻𝑢𝑚𝑎𝑛 𝑅𝑎𝑡𝑒) Turning the FTE based costing (or pricing model) into outcome based model can turn a cost center to a revenue center FTEs Avg Loaded Cost / FTE / hour Monthly Loaded Cost Total Annual Loaded Cost Before SPA Implementation 150 $55 $114,125 $1,369,500 FTEs Avg Loaded Cost / FTE / hour Monthly Loaded Cost Total Loaded Cost During Implementation 150 $55 $114,125 $456,500 FTEs Avg Loaded Cost / FTE / hour Monthly Loaded Cost Savings / Month Post Implementation 80 $60 $66,400 $47,725 Months to Break Even 4.63 Technology Investment Project Cost $220,800 Calculations shown are high level and directionally illustrative only 1 2 3 4 5
- 17. Copyright 2016 -18, 3nayan (3nayan.com) 3nayan ROI | NEW SERVICE OFFERING 17 Enabling service providers to move to different business models will support the initial investment made Costs (Annual) FTEs Avg. Payroll Cost Total Cost PA team engaged 5 $9,375 $46,875 Process Team Engaged 2 $18,750 $37,500 Tech Team engaged 3 $7,813 $23,438 Payroll Cost $107,813 Loaded Cost (Additional 20%) $129,375 Training Cost Duration Cost Training 3 $100,000 Revenue Loss During Training $230,400 Total Training Cost $330,400 Total Cost $459,775 Billable Projects (4-month duration) Duration (Months) Hours / month Bill Rate / hr. Total Billing 3.5 160 $50 $140,000 2 160 $70 $44,800 2.5 160 $30 $36,000 Revenue Per Project $220,800 Calculations shown are high level and directionally illustrative only 1 2 3 4 5
- 18. Copyright 2016 -18, 3nayan (3nayan.com) 3nayan ROI | PREVENTING ATTRITION 18 Liberate people through smart process automation, thereby impacting attrition Recruitment Cost Recruiter output p.m. (FTE) 8 Recruiter startup time (months) 1 Lag Time for Recruiter (months) post resignation [Same as notice period] 2 Recruiter Annual output 72 Annual Cost of Recruiter $10,000 Revenue Loss New Recruit Notice Period (months) 3 New Recruit (FTE) Training Period (months) 1 Min Revenue Loss Period, including training (month) 4 FTE billing rate / hour $30 Revenue Loss Per FTE per month $4,800 Revenue Loss Per Attrition $19,200 Annual Revenue Loss for total attrition $1,382,400 Saving / Cost Avoidance % Attrition Prevented 25% Cost Avoidance $345,600 Calculations shown are high level and directionally illustrative only 1 2 3 4 5
- 19. STRATEGY TRANSFORMATION EXECUTION CAPABILITYProvide deep insight, expertise and execution help enabling clients reach their goals. • Strategies (with lucid business cases) and execution which integrate new operating models with enhanced organizational design, technology blueprint, and sourcing strategies; • Strategies and implementations which are outcome and not just output based, thereby not just reducing costs, but bringing in real business value. IDENTITYA group of highly qualified SMEs and entrepreneurs who share a common mission of making clients successful • Bring top tier global consulting and execution expertise along with ease of engagement and agility. Helping organizations be business and people proficient
- 20. 1 2 3 4 5 Suhas Dutta Strategy Transformation Execution STRANZEX CONSULTING LLP W 3nayan.com E suhas@3nayan.in M +91 99807 11477 3nayan.com reach@3nayan.in /3nayanconsulting @3nayanSpeaks
Editor's Notes
- #20 Start distinguishing here between larger consulting companies and us. That we are nimble footed, and we come without the larger consulting company baggage. They might not engage with smaller companies at all, that they might have a packaged approach. As you talk about us, you would want to keep in mind the colours chosen for our Logo: The pink shows Compassion, Nurturing. The Imperial Blue shows structure, integrity, stability. The two colours together create the yin/yang.