The Cost of RPA Ownership & Why RPA as a Service is a Better Solution for the Mid-Market
Updated: Dec 7, 2022
Every business nowadays has manual, boring, and repetitive processes that cause staff to be unhappy or unproductive. The case for RPA in fact has become a no-brainer; the challenge for mid-market companies has historically been cost.
RPA, or Robotic Process Automation, can help streamline processes, increase operational efficiencies, and eliminate errors, but the challenge is that the cost of software licenses to get started in this field is very high.
Most of the big software players – like UI Path and Automation Anywhere – have targeted enterprise companies because they have millions to tens of millions of dollars to invest in RPA infrastructure, licenses, and developers to start automating processes.
In the past, these companies have stayed away from the mid-market or small business segment because these companies can’t justify the cash outlay to embrace automation, nor have the manpower to build and manage these automation processes.
When companies buy licenses from RPA software companies, they typically have to pay for implementation, process design, licenses, and on-going maintenance to make sure the bots are working properly. Licenses can cost tens of thousands of dollars and the payback period (at best) is one year.
These are just a few reasons why the mid-market hasn't started fully embracing RPA or automation to drive business outcomes.
HFS Research says that license costs only represent 25-30% of RPA’s total cost of ownership (TCO). The remaining 70-75% represents the part that no one is really talking about: the ongoing cost of support personnel.
To simplify the concept of TCO, we’ll divide it into two categories—cost of technology and cost of support. Within each category are one-time, upfront costs and ongoing, annually-recurring costs.
Breakdown of Technology Costs
One-time:
RPA vendor licensing
RPA vendor training
Infrastructure setup
Third-party integrations
Proof of Concept
Ongoing:
Annual RPA license(s) renewal
Annual maintenance renewal
Annual third-party integration license renewal
Infrastructure maintenance and/or expansion
Vendor management (where applicable)
Management of program SLAs
Let's analyze software license costs. As HFS Research points out, RPA software pricing and licensing models can be extremely hard to get your head around.
The technology set is typically broken down into separately-licensed modules dedicated to a specific use—bot builders, bot orchestrators, bot dashboards, and advanced analytics hubs.
License models can be annual, perpetual, consumption-based, or Software-as-a-Service (SaaS). Licensing costs can also vary between unattended and attended automation, number of users, number of bots, number of machines, and run-time.
Some vendors even carry bot or license minimums, as if building your own RPA program wasn’t difficult enough. Pricing across all vendors remains unnecessarily complex, thereby making it difficult for your COE to keep tight control of total technology costs as your program expands.
Breakdown of Support Costs
One-time: Building out the COE
Hire or reallocate analysts and developers to plan, design, build, and maintain the program
Secure IT support for infrastructure and deployment
Ongoing:
Annual overhead for support personnel
Ongoing training
Continuous process optimization
Continuous expansion of the program
Continuous bot monitoring
Continuous bot maintenance (Note: The average life cycle of a bot is 18-24 months)
The RPA Center of Excellence (COE) is essentially a dedicated steering committee responsible for guiding, managing, and building your RPA initiative.
This COE is typically composed of 5% stakeholders, 25% business process experts/analysts, and 65% IT personnel.
So, let's say you start small with a COE of 15 people. Depending on the provider selected and the processes being automated, your COE will require between three-to-nine developers.
With an average salary range between $100K-$160K for RPA developers in the U.S., you're looking at a minimum annual cost between $300K-$480K just for IT personnel, on top of annual licensing costs.
It's a significant expense that must be factored into the overall ROI of the program.
But, what about pre-built bot libraries? Will that help reduce the need for experienced developers? Not exactly.
Every major RPA vendor provides user-generated, pre-built bot libraries to "accelerate" RPA deployments.
So, one would think it's a safe assumption that subject matter experts (SMEs) at any experience level could throw together an automated process in an afternoon, right? Great in theory, but problematic in execution. Here's why.
Most applications available on the market today are completely customizable, and few companies use applications "straight out of the box;" thus, edits to pre-built bots are practically guaranteed.
Using proprietary or highly-specialized applications? You’re likely building from scratch every time. Automating Citrix-based applications? Prepare for extra maintenance as automation that utilizes computer vision is significantly less stable.
Bot libraries can be a great start, but in no way do they remove the necessity for qualified personnel.
There are myriad factors that can lengthen time-to-implementation, require more expensive or expert personnel, or increase change management (and downtime).
These unforeseen factors, while difficult to calculate, can have a significant impact on the overall cost and success of your program.
Understanding this from the outset is imperative to building smarter, more scalable programs.
How Stealth Scaling is Solving Problems for Mid-Market Companies
Stealth Scaling is an intelligent automation-as-a-service company that helps healthcare, insurance, banking, restaurants, and credit unions completely automate manual repetitive processes by leveraging AI, RPA, and humans in the loop.
Stealth is investing in the mid-market space by funding the automation implementation, maintenance, human in the loop costs, and license costs and becomes your center of excellence for automation.
Stealth only charges per successful transaction whether a bot or human completes it.
This allows customers to start reaping the benefits from automation and have a tangible ROI on day 1 of the bots and humans in the loop going live.
Going from a payback period with software to a ROI on day 1 of launch is revolutionizing automation within the mid-market space.
Stealth Scaling has operations in Miami, Fl and Metro Manila, Philippines to completely automate work end to end.
Stealth will build out software robots that can mimic what humans do in manual repetitive processes such as invoice processing, order to cash, data reconciliation, data entry, know your customer, claims processing, and more.
The bots run 24/7 and can scale up and down based on seasonality and are backed by trained humans in the loop who have clinical experience.
The humans only handle exceptions or validations that the bot needs assistance with.
The Philippines has a hub of talented practitioners in a variety of verticals that can jump in and support these processes when needed.
This is truly a disruptive model because clients don’t pay any implementation, maintenance, or license fees to software companies to start automating processes.
If you would like to get a free automation evaluation please fill out our contact form and our automation specialists will get in touch with you right away!