What’s the true cost of failed automation?

  • Shankar Sundaram
  • Wednesday, June 29, 2022, 2 min read

Most organisations believe the cost of failed automation is equal to cost of the project that didn’t go live or didn’t meet the expected outcomes.

According to a report by E&Y and Deloitte about half the automation projects fail. That’s a lot of money being wasted, considering the automation market is expected to be USD24billion by 2030. 

Unfortunately, It is not just money lost. There is a large invisible cost associated with failed automation. 

The cost of technical debt

Companies incur capital expenditure on purchase of bot licenses for their automation programs. Once an automation program fails, the bots can’t be returned and the technology team still needs to maintain the bot, spending time and money on it. Unutilised or under-utilised bots make an automation program unviable.

The cost of change

When an automation fails, the unstable process or application is likely to create higher future costs of rework. Lower the stability of a process, higher the cost of maintenance. Archaic and legacy applications are expensive to maintain owing to a steadily vanishing breed of people familiar with those systems. Accurately predicting the stability of a process is a critical factor while undertaking automation and helps estimate the true cost of automation.

The cost of Proof of Concepts (PoCs)

Many businesses spend money and time on PoCs, testing an already proven technology. There are enough implementations to prove technologies like Optical Character Recognition, Natural Language Processing and Robotic Process Automation work. 

“Businesses need to check for process readiness for automation, rather than test technology readiness for the process” 

The cost of intangible results 

A limitation of the traditional automation RoI framework is that it only measures quantifiable benefits like cost savings, productivity benefits and speed of delivery. However, automation can have far-reaching results that impact employee engagement, customer experience and competitive differentiation. When a project doesn’t deliver expected results or fails, the impact on morale and confidence is often high, but remains un-estimated. 

To navigate the automation journey, it is important to know exactly what to automate. Creating an automation framework that delivers rapid assessments and build an automation pipeline puts organisations on a scalable, sustainable and successful path to automation.

Tags: TCO, total cost of ownership, Return on investment, ROI, automation framework