How to calculate return on investment (ROI) for automation projects
1. Determine your Business Requirements
2. Start your Research
3. Start a Trial
4. Get a Quote
5. Calculate Soft Costs
6. Calculate Costs and Savings over 5 Years
According to InformationWeek's survey on IT spending priorities, many IT departments are overpromising the ROI for their top projects. Talk about bad press.
If you're hoping to start an automation project in 3rd quarter, a quick return helps justify the money, time, and effort involved in the purchase and implementation of a workload automation (WLA) tool. Automation can dramatically reduce operational costs. How do you make sure your investment gets a good return?
Follw these 6 steps and use the ROI Calculator below to get the data you need to please for your CFO:
1. Determine your Business Requirements.
Before you start looking, determine the problem you're trying to solve, such as:
- Unexpected downtime caused by human error
- Operations staff has no control over production processing
- Monday morning surprises due to weekend errors
- Lack of notification for delays and errors in your critical job streams
Now, determine which features will solve your problem:
- Scheduling based on dependencies that run on other servers
- Managing all servers from a central server
- Automatic notification for delays and errors
- Auditing for all workload changes
Determining your key business needs is important. You'll want to choose a product that meets those needs. If you're not going to use all of the high-end features, why pay extra for them?
2. Start your Research.
Do your homework! This is a growing market. Don't get stuck with a vendor that isn't regularly updating the product and helping your IT move into the future. There are many objective sources available to help you evaluate vendors. This table in Wikipedia offers a fairly comprehensive list of enterprise job schedulers and their features.
Based on your business requirements and the features in this table, select three or four products to evaluate.
3. Start a Trial.
Create your proof of concept (POC) test plan and start a trial. You may want to schedule a demonstration of the product with the vendor once you've had a look on your own. Product demonstrations should answer any technical questions you have and offer help in completing your POC.
During the trial period, test the support response from the vendor. In this phase, simplicity is king. Some implementations become so complicated that they are never completed. If the tool requires costly training to install and implement—especially just during a trial—imagine how hard it will be to use on a daily basis to automate your tasks.
4. Get a Quote.
Get a price quote for your environment from the vendor. Make sure it includes the cost of software, required hardware, required consulting fees and training, and approximate resources and length of time needed for implementation.
Use this purchase decision checklist to make sure you've thought of everything you need.
5. Calculate Soft Costs.
What is the real cost of manual procedures? You might want to research daily tasks: shadow someone for a day or have someone shadow you. YOu may be surprised at the number of manual tasks that could be automated. Don't forget to include:
- Downtime due to errors
- Misses Service Level Agreements
- Schedule delays waiting for resources
- Overhead caused by rerunning jobs
- Quality of life for staff working weekends/evenings/month-end
How much does downtime cost the business? How often do you rerun a process? Don't forget to consider these costs when determining your ROI. It's also important to remember that, at most companies, each department runs its own hardware and software applications. Consolidating the scheduling and monitoring of those systems makes life easier for your IT team and reduces error.
6. Calculate Costs and Savings over 5 Years.
Use the ROI Calculator Worksheet to calculate an accurate ROI. Your ideal WLA tool meets all of your requirements and produces a quick ROI.
With this data in hand, you’re ready to make the case for automation to your boss. Good luck!
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