How to Estimate a Process Automation

How to Estimate a Process Automation

When it comes to process automation, one of the biggest challenges is understanding how to estimate it properly. Whether you’re an organisation looking to optimise workflows, or a small business trying to save time on repetitive tasks, it’s essential to know the cost, time, and resources needed for the automation project to succeed.

In this guide, I’ll walk you through how to estimate a process automation project effectively, avoiding common pitfalls and maximising efficiency. It’s not rocket science, but it does require a structured approach.

Why Estimate Automation?

Before diving into the nuts and bolts, let’s talk about why estimating process automation matters. Proper estimation helps you:

1. Understand the ROI: Automation projects can vary significantly in cost and complexity. Estimation gives you a clear idea of the potential return on investment (ROI).
2. Align Expectations: Whether you’re working solo or managing a team, setting clear expectations about timeframes and costs avoids frustration later.
3. Avoid Scope Creep: Without clear estimates, you can end up with a project that keeps expanding. Automation is meant to save time, not create endless work.
4. Prioritise Efforts: Some processes are ripe for automation, while others might not offer enough bang for the buck. Estimating helps you decide where to focus your efforts.

Now, let’s get into the nuts and bolts of how to do it.

Step 1: Identify the Process

It sounds simple, but you’d be surprised how many projects fall apart because the process being automated wasn’t well defined. The first thing you need to do is choose the right process for automation.

Ask yourself:

• Is the process repetitive?
• Does it involve rule-based decision-making?
• Does it consume a significant amount of time or resources?
• Does it require precision and consistency?

If the answer is “yes” to most of these, it’s likely a good candidate for automation.

Example:

Let’s say you run an online retail store. One tedious process might be manually entering new orders from emails into your fulfilment system. This is a task that can be automated, as it’s repetitive, rule-based, and requires consistent accuracy.

Step 2: Map Out the Process

Once you’ve identified the process, map it out from start to finish. This helps clarify what exactly you’re automating and where potential bottlenecks might occur.

Steps to map:

• Document each action: From receiving input to output, write down each individual step in the process.
• Identify exceptions: Every process has exceptions that might make automation tricky. List them out so you’re aware of edge cases.
• Estimate complexity: Are there decision points that require additional logic or rules? Is the data structured or unstructured? These details will affect the complexity of your automation.

Example:

For the online retail store, you might break it down like this:

• Receive order email.
• Parse the email for customer details.
• Enter order details into the fulfilment system.
• Send confirmation email to the customer.

Step 3: Choose Your Tools

Your choice of tools or platforms for automation will have a big impact on the time and cost. Here are a few categories of tools:

1. Off-the-shelf Automation Tools: Tools like Zapier, Make (formerly Integromat), or Microsoft Power Automate allow you to build automations without much coding. These are great for smaller tasks or businesses that want to automate without hiring developers.

2. Robotic Process Automation (RPA): Tools like UiPath, Automation Anywhere, or Blue Prism are more suited for complex enterprise-level automation. These tools are designed to mimic human interactions with software, making them ideal for automating processes that involve legacy systems.

3. Custom Development: For highly specific needs, you might need to build custom automation using code. This requires more upfront effort but offers the most flexibility.

The type of tool you select will heavily influence both the time it takes to build the automation and the cost.

Pro Tip:

If you’re unsure which tool to use, start with off-the-shelf options. They’re faster to implement and can give you a working prototype before you consider more robust solutions.

Step 4: Estimate Time to Build

Here’s where we start getting into numbers. How long it takes to build the automation depends on three factors: complexity, resources, and tooling.

Formula:

Time to Build = (Process Complexity * Tool Familiarity) / Resource Availability

• Process Complexity: A simple task like automating email forwarding might take a few hours, while building a full-scale automated CRM system could take months.
• Tool Familiarity: If you or your team are experienced with the tool, the process will go faster. If not, add some extra time for learning.
• Resource Availability: If you’re working solo or have limited developer hours, this will stretch the timeline. Full-time developers or dedicated teams speed up the process.

Example:

Let’s say automating your order entry process is medium complexity, and you’re familiar with Zapier. You estimate it will take about 5-8 hours of work spread across a few days or weeks, depending on resource availability.

Step 5: Estimate Costs

Costs come down to two things: direct costs (tools, developers) and indirect costs (time spent learning or configuring).

Direct Costs:

• Licensing: Most automation tools charge a subscription fee. Zapier’s paid plans start at about $30 per month, while enterprise RPA solutions can cost significantly more.
• Development Resources: If you need to hire developers or consultants, expect costs to range from $50 to $150+ per hour depending on skill level and location.

Indirect Costs:

• Time spent: Don’t forget the time you or your team will spend on learning or troubleshooting. Time is money, after all!

Example:

• A basic Zapier plan at $30/month
• Your time spent learning and building, valued at $50/hour
• If you spent 8 hours, that’s $400 of your time invested

Total cost? Around $430 for the initial setup.

Step 6: Calculate the ROI

Now comes the fun part—figuring out the return on investment.

Formula:

ROI = (Time Saved x Hourly Wage) - (Initial Cost + Ongoing Costs)

• Time Saved: Estimate how much time the automation will save you per week or month.
• Hourly Wage: If you pay someone $30/hour, that’s the value of each hour saved.
• Initial Cost: Add up all the setup costs from step 5.
• Ongoing Costs: Consider monthly tool subscriptions or maintenance costs.

Example:

If automating order entry saves you 5 hours per week and you value that time at $30/hour, that’s $150/week or $600/month saved. Subtract the initial cost ($430) and ongoing costs ($30/month for Zapier), and you’ve got a positive ROI in the second month already.

Step 7: Plan for Maintenance

Automation is rarely “set and forget.” Plan for some ongoing maintenance, especially if you’re using APIs, where things can break when tools or software get updated.

• Schedule regular check-ins to ensure your automations are running smoothly.
• Budget a small amount of time or resources for troubleshooting issues.

Conclusion

Estimating process automation doesn’t have to be overwhelming. Start by identifying the process, mapping it out, and choosing the right tool. Once you’ve done that, break down the time and cost estimates, calculate the ROI, and ensure you’ve got a maintenance plan in place.

By following these steps, you’ll set yourself up for a successful automation project that saves time and money without unnecessary surprises along the way.

Automation is about freeing up your time so you can focus on higher-value tasks. And who doesn’t want more time for the things that matter?