Chapter 5: How to Measure and Report on the Success of Automation

Track Your Automation Success

Automated business systems begin as abstract questions — How can we speed this up? How can we trim that down? How can we make things less complicated?

These questions turn into solutions through new technology and updated standard operating procedures — and those solutions become results through metric tracking.

Data serves as the guiding ethos behind most business enhancements, and automated business processes are no different. They succeed when you have the right people equipped with the right tools to do the right work — but they thrive when they’re measured, tweaked and measured again, developing along the way.

You cannot know the full impact of your business equipment, technology and trained personnel unless you have real numbers and percentages to review across every function of the organization. Data-driven metrics and automation tracking programs allow you to know precisely what’s improved, where and by how much, helping you prove the point to the entire operation.

 

What Are Important Automation Metrics to Track?

It’s just as important to outline an automation assessment plan as it is to implement that automation in the first place — otherwise, you’re just working harder, not smarter. Your process assessment plan should account for the tangible goals you want to get out of your new technology or system, framed as clearly and linearly as possible.

While there are many important data points to track regarding a new business process, three domains stand out in particular — activity metrics, efficiency metrics and value metrics.

  1. Activity Metrics: These are the data points that review the adoption and usage of new automation tools. They represent the earliest phase of business process automation you can glean insights on, lending hard evidence to typically qualitative problems like employee understanding and buy-in of new technology. 
  2. Efficiency Metrics: Showcase the improvements to your daily tasks and operations themselves. Efficiency metrics measure actual process alignment within the everyday workings of your organization. They should show an alleviation of the pain points and an enhancement of the specific process goals you outlined from the get-go. If they don’t, you may need to make more system, software or role tweaks.
  3. Value Metrics: Round out the list of meaningful metrics to track and encompass any finance or budget-related changes that occurred as a direct result of the automation. These include variables like expenses saved from better inventory management, costs cut due to the elimination of an unnecessary workflow chokepoint or business capital expanded due to analyzed resource allocation. 

Through these three key performance indicators (KPIs), you can gain value-based, evergreen assessments on the actual nature of your process improvements. Keep reading for further details and applications of activity, efficiency and value-based automation testing tools.

1. Activity Metrics

Specific examples of activity-based data metrics to track include the following:

  • Automation Ramp-Up Time: The entire timeline it takes to research, select, integrate, train, pilot and then fully utilize a new automated program, software or piece of equipment. Ramp-up times are a critical baseline to compare other activity metrics to. 
  • Usage Rates: What percentage of employees are using the new software, applications or equipment? How long are they using it, and for how many tasks? What are the completion times of these tasks, especially compared to before? Usage rates like these help you quantify employee activity and their engagement with the overall tweaked system.
  • Case Studies: Turn your ramp-up, engagement and usage data into a before-and-after case study, which in turn becomes prime material to share with C-level executives and other stakeholders on the success of your new automated business process endeavor.
2. Efficiency Metrics

Efficiency metrics are industry and business-specific. The operations you’re looking to simplify, the processes you’re aiming to enhance and the systems you’re able to control and tweak are directly related to the kind of work you do. Yet some of today’s most persuasive efficiency metrics include: 

  • Inventory Turnover: Consider tracking all inventory, warehouse or stock-related improvements, such as quicker shelf turnover rates, better inventory itemization and organization, “just-in-time” inventory sourcing functionality, keener stock forecasting and shortened days of inventory outstanding.
  • Total Asset Turnover: Total asset turnover is one of the most important KPIs to analyze across a new business system. Total asset turnover calculates the ratio of sales profits relative to value assets. This means you’re able to definitively assess if implementing a new automated process leads to higher total asset turnover, which means your business is generating more money based off its resources — a winning recipe no matter what industry you’re in.  
  • Accounting Operations: There are many metrics to analyze within an accounting or finance department. This is one of the leading areas to implement business system automation, which can augment everything from accounts payable to vendor-contract management. If you’ve implemented or are looking to implement accounting automation tools, consider tracking:
    • The inputting rates of manual entry versus automated data entry. 
    • The error rates of manual entry versus automated data entry.
    • Finance-related document filing and database search query times.
    • Decrease in incidents like double, late or erroneous payments.
    • An uptick in rates of vendor early payment discounts.
3. Value Metrics

Last but certainly not least, calculating value metrics after a business process improvement helps prove that improvement’s benefits to your bottom line. Once this is realized, the process improvement practically speaks for itself.

  • Order Lead Times: Find the average order lead time before the automated system was introduced as well as after its full roll-out, from order receipt to shipment to service or delivery confirmation. Chances are with a new business process solution, those lead times have successfully decreased. 
  • Revenue Generated: Track specific areas of revenue growth before and after automated process updates. These include revenue variables such as an increase in the overall sales during a cycle, an increased amount of closed deals, increased amounts of product orders or increases in the value of the orders themselves. Complement revenue-generating numbers with revenue-saving numbers, such as decreases in cost per leads, cost per customer and cost per order to get the full range of process-inspired generated revenue.      
  • Cost of Investment Versus Revenue Generated: Once you’ve tracked your net revenue, you can compare upticks to the initial amount invested in the automation infrastructure. You then have the foundation to system ROIs.

Remember, this list of automation metrics to measure is hardly static. If you’ve done the necessary research, roped in diverse team members, gained fresh pain-point perspectives and systematically equipped all stakeholders with a step-by-step process-improvement plan, then relevant data tracking will develop, naturally rounding out the work. You and your employees stand ready to reap the full rewards of improved daily activities — which really means improved professional lives.

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