Hidden Costs Of Lack Of Automation
Let’s face it we are all doing that sometimes to some extent – “this time I will do it manually as it will be faster than automation”, no too long after we are facing the same cases.
Always, remember always, tasks that can be automated and aren’t are bringing hidden costs that you may be not aware of.
Let me describe that on a simple example: software development release process.
Fairly logical and standardized process, at least it should be. Present in 99% of information technology software companies / teams / projects. There are numerous publications, and tools on the market to help answer questions as to how, and why this process should be automatic, if not fully than at least partially. However I would assume that out there (in real world) there are a lot of companies / projects / teams that are still doing that manually.
Let’s analyze a case where in a Team there is one single person responsible for whole release process and he or she is doing this job two days in a working week, because of various reasons.
This person is being paid 7 000$ (amount is not relevant) per month, for simplification, let’s take 20 working days, which as a result makes 350$ a day 700$ per week, multiply it by 52 which is the number of working weeks in year, that makes 36 400$ a year spent only on manual handling releases rather than working on a real business value products, to make it more visible this is 43% of total money paid to this employee over a year …
Making slight automation in the process, spending only one day per week instead of two will make total values to: 18 200$ per year in cash which makes 21,7% of total money paid over year to employee.
Don’t be so hasty, everything has its price, creating automated process will cost as well + you need to maintain it.
Rough estimates: let’s assume that the same employee will work on automating release process, automating the release to make half of the work done automatically will require 2 weeks (10 working days) + 1 day each month to maintain it (fix, adjust, enhance). Numbers: 10 times 700$ + 12 times 700$ equals to 15 400$ in total.
Let’s sum it all up.
| Manual Process 2 days per week | Partial Automation 1 day per week work needed | Full automation | |
|---|---|---|---|
| Year 1 | 36 400$ | 18 200$ (1 day of manual work) 7000$ (costs of automation) 8400$ (maintenance) Total: 33 600$ | 21 000$ (rough costs of automation 30 days of work) 8400$ (maintenance) Total: 29 400$ |
| Year 2 | 36 400$ | 26 600$ (manual work + maintenance) | 8 400$ (only costs of maintenance) |
In percentages:
- option 1 with half automation: 7,7% in 1st year, 27% in 2nd and each consecutive year;
- option 2 with full automation: 19,23% in 1st year, 77% in 2nd and each consecutive year;
Numbers are speaking for themselves, add to this money potentially made on projects done by this employee instead of manual release process and you should know where to look for savings.
Of course values and summary may vary, but the outcome is always the same, automation is paying off, you are spending less time on “boring” tasks and more time on business value.
What do you think about this topic, are you in or against automation?
Thanks,
Krzysztof
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