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How to Calculate ROI for Automation

Use these tips and calculations to justify your automation projects today!

Automating as much as possible should be the ultimate goal for any IT environment in any company. That saves time and cost, boosting efficiency and bringing peace and calm to IT staff, management and end-users. In an ideal world, if you see an opportunity to streamline a routine process, you take it straight away. But, unfortunately, it's not always as easy as it looks.

A typical barrier that many companies face is getting from a useful initiative by the IT department up to an approval from the decision-making management. It's often the case that IT staff struggle to explain the need in automation, thus it's not implemented and, if it happens multiple times, the whole company gets stuck in inefficiency swamps.

We at Softerra want to help you with explanation and justification of automation projects. Of course, we would love if it was Adaxes you were trying to push through to streamline your Active Directory, Exchange and Office 365 management, but we understand that it's not necessarily the case. The following tips and calculations apply to all types of automation, big or small.

Common Language for IT and Management: ROI

Calculating ROI

Getting an actual number for ROI can be tricky. You can't always estimate the exact amount of investment return. This can be either due to lack of details of how things work within the company or because ROI isn't always a direct value. In any case, you will need to make assumptions and educated guesses.

Direct ROI

Let's start with the easy part. The aspects that you can easily provide convincing numbers for.

User Provisioning

New employees can spend a significant amount of time simply waiting for their account to be set up. If it's done manually it can take several hours to fully complete. All that time newly hired workers can't work, thus they are wasting time.

Introducing automation to user provisioning can reduce the amount of time lost practically to zero. Getting ROI on that one is simple. Calculate the average waiting time for new users, the amount of time spent by the IT staff on each of them, multiply those numbers by the respective wages and then multiply it again by the number of new users that come per year.

Example for a company with 100 new users coming yearly:

((2 hours of waiting * $20 per hour) + (1/3 hour of IT time * $30 per hour)) * 100 new users per year = $5,000 per year

Self-Password Reset

Forgotten passwords and locked accounts are the most popular reasons of help desk calls. Again, a lot of time is spent by users just waiting for the account to be unlocked. It also creates additional load on the IT staff that need to deal with the problem.

To calculate ROI on password self-service you need to estimate the percentage of users who forget passwords each month (e.g. 20%), multiply it by the combined time of users waiting and the IT staff spend on the problem and get a value in hard dollars.

Example for a 500-users company:

 ((1/3 hour of user waiting * $20 per hour) + (1/6 hour of IT staff's time * $30 per hour)) * 20% forgotten passwords * 500 users * 12 month = $14,000 per year.

Intangible ROI

So far calculating ROI is straightforward if you can get an amount of time saved and convert it to money. But there are also things that you need to mention that have got intangible ROI associated with them. They might not be as obvious but that doesn't mean that you can ignore them. Here are just some examples.

Active Directory Cleanup

Performing regular cleanup activities can lead to a generally healthier environment. This is something that must be done on a regular basis. Automating this process can save many hours of IT staff's time. It's also a big security measure as inactive user accounts are often targeted by attackers.

Office 365 Licenses Automation

Automating licenses assignment and revoking means that you won't get unused ones hanging around. Without automation, you either use a lot of IT staff's time by doing it manually or you are not doing that at all (both options are obviously pretty bad). Once you streamline the process, you will be able to save cost by minimizing your license packages and not waste money on those users who don't need them.

Data Integrity

Automation can bring down the human error factor (typos, missed steps, putting things in wrong places) and ensure all data in your systems is compatible with your policies. To provide a ROI number on that you would need to estimate the damage that potential mistakes could cause. This can be really hard to predict (unless you already have a lot of mistakes causing a lot of harm), but it's a definite point of consideration.

More Time for Other Problems

Automating routine tasks means that IT staff can finally find time for more advanced projects that will solve other problems. Again, not something with a clear price tag on it.

Less Stress for IT

Having repetitive daily tasks automated means that the IT department can be a bit more relaxed and generally feel better. Being sure that with automation in place they will always be able to fulfill your daily duties and won't need to stay overtime brings peace of mind to the working place. And peace of mind can significantly boost productivity levels. That factor mustn't be underestimated.

Conclusion

Everybody knows that automation is great, but when it comes to implementing it in your company, there can be barriers that you need to overcome. To push an automation project from being just a great idea to an actual implementation, it is important for everybody to converge on a clear understanding of the benefits that can be gained.

We hope that this article will help you to find strong and convincing arguments, whatever side within your company you're on. Don't underestimate aspects that are not that obvious, like the amount of stress or eliminating security threats. They are as important as the ones that you can easily put a number on.

We at Softerra love automation and know how to master it. If you're still looking for a solution that will fit your needs, have a look at Adaxes, which can automate things like user lifecycle and group membership management, data standards enforcement, password self-service, Office 365 licenses management, Exchange management and much more. We'll be happy to provide you with a demo and help you through the entire evaluation process.

Don't wait. Automate!

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