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  • Writer's pictureStayAhead Editorial Team

Can RPA reduce cost? How?



The whole idea of automation is around the fact that one could increase efficiency, reduce cost, and boost margins. But sometimes organizations fail to do so or don’t attain the expected goals within the expected time. Why is that? If so, how could one ensure to hit their north star metric of reducing cost using robotic process automation.


Is the old saying of “a dollar saved is a dollar earned” still true?


With a tight labor market, the operational expense has increased by 3x due to the increased salary cost and other benefits that agencies are struggling to make meaningful margin to support their growth and sustainability. Cost of labor continues to grow and happens to be the no.1 major expense item on the P&L. Every day, the CFOs are under pressure to cut down costs and aid in increasing margins. But how?


Time to think differently and take steps.


In the current economy, one cannot imagine having the same number of staff as they did a couple of years ago. Consider a “60-40 approach” where most of the process is carried out by humans and the remaining tasks are either fully or semi-automated that you are not spending on salaries for those 40% of the process.


Imagine a process that used to take 3 FTE to complete with an average monthly salary of $4000 ($12000 / month for 3 members) now reduced to $7200 since 40% of those tasks are automated and you have a task automation bot in place doing those routine activities. The savings here are roughly around $57,600 per year. Such savings are hidden within every department.


Starting with one or two areas of operations, expanding this to every department, you will end up with potentially increasing the margins by at least 30-35%. Begin with one process and continue discovering more within every operational area. With the economy of scale, if the volume increases, automation will yield benefits two-fold without adding any significant cost to run or maintain the automation to support the intended growth.

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