Use these KPIs to track the performance of your bots

Thanks to technology, bots are now everywhere in our daily lives. As we open arms and welcome the new digital workforce to assist us in tasks we have been avoiding all week long, it is also time that we start determining if the digital workers are worth the money.

Before diving into the world of automation, it is essential to understand that automation solutions come in many forms. Robotic arms, chatbots, and robotic process automation bots (RPA) are just some of the demonstrated technologies to start with.

In this article, you will learn about the three dimensions of measurement to evaluate automation solutions, which are related to workforce management, process enhancement, and technology (bots) effectiveness.

Most businesses have an overall IT strategy that defines their key performance indicators to measure. Even though KPIs used vary among different sizes of organizations and industry types, there are a few indicators specific to automation that are common across all businesses.

Managing humans and the digital workers

Automation is undoubtedly a game-changer. As bots continue to gain popularity, we are bound to enter a workforce transformation wave. As bots release us from the dull and manual work, we are finally able to change the nature of our work to be analytical and make wiser decisions.

Workforce related measurements:

• Financial benefits
• Productivity gain
• Continuous improvement

IT investments can be challenging to measure. While there are many methodologies to estimate the cost of IT implementation, benefit realizations can be hard to quantify. Increased employee satisfaction and reduced human effort are some intangible benefits that need to be evaluated. Two metrics can convert intangible benefits achieved through automation into bottom-line figures: Number of FTE released and ROI.

Human efforts are reduced when bots automate a manual part of the workflow. The number of full-time employee (FTE) released is a good measurement to evaluate the employee effort saved. The number can then convert into hourly rate of salary saved.

Example:The use of bots would save an employee ($30 hourly rate) three hours of effort per day.$30/hour saved * 3 hours/day = $90 saved per day$90 saved per day * 20 working days/month = $1800 saved per month!

It is also important to note that the ability of a bot is not affected by time. Thus it does not produce error rate even after pulling an all-nighter for month-end closing!

In return, all kinds of improvement achieved through automation can be calculated into the return of investment (ROI) indicator. And another good thing about bots is that businesses can immediately see the impact as operating costs drop and stabilizes after the commission of the bots.

Continuous improvement is vital in any business that embraces technology transformation. As businesses ‘hire’ more digital workers, manual and routine work is no longer a privilege to humans. As a result, we need a different kind of mindset and skillset to shift our focus to cognitive and analytical work. Rather than seeing the bot replacement as a threat, we should see the shift as part of continuous improvement.

Measurements to measure continuous improvement include training time, number of certifications obtained, and time used by employees to resolve issues caused by bots. The indicators could help a business to have an overview if employees qualified to manage the bots.

An automated process means high usage of technology and high quality of outputs

As we move towards achieving digital transformation, processes/workflows need updates to comply with the latest technology. After refining the process flows, management needs to encourage more business units to utilize the technology to maximize automation benefits. From a process perspective, adoption rate, risk management, and throughput rate are among the indicators to track.

Process-related measurements

• Adoption rate
• Risk management
• Quality and delivery improvement of products and services

To understand if bots are used effectively, businesses need to track the number of automated processes and business units using the automation tools. The numbers ought to be rising gradually for benefit maximization.

On the other hand, bots can also help to improve risk management. Most of the time, lack of governance and tracking are the reasons for lapses in audit findings. Therefore, bots with automated logs can address these risk issues.

The greatest thing about bots is that they are available 24/7 with minimal error rate. Since bots are simply algorithms built to repeat tasks, businesses should see a better performance in throughput rate, reduced lead time, and error rate. These performances, as a result, will improve customer satisfaction due to better products and services delivered.

Embracing the use of bots within organizations

Ultimately, automation strategy defines the effectiveness of bots. Common automation goals include a high utilization rate and a low exception rate of the bots.

Bots related measurements:

• Integration with other systems
• Utilization rate
• Exception rate caused by bots

Bots, regardless of its type, is not a stand-alone technology. It is common to use bots or any automation solution to reduce the repetitive work that was previously done by humans. If bots are not optimized to work with other systems, then the adoption rate would be low. As a result, the bot utilization rate will also drop.

Another factor that would impact the bot utilization rate is a high number of exceptions resulted from the bots. Businesses should keep track of the number of error occurrences to improve error handling functions of the bots. Another good indicator to keep track of is the unscheduled downtime of the bots. If the bots are not functioning as expected, it is a sign that technology is immature, or the bots require further enhancement to improve up time.

In a nutshell, the opportunities of automation extend far beyond operational savings and cuts across process optimization and technology transformation. However, benefits do not count until you start measuring them!