PERICENT - A DOCUMENT AND PROCESS AUTOMATION COMPANY
Implementing business process management (BPM) for your project or organization is associated with increased return on investment and maximizing the utilization of all resources. But, understanding the differences between types of ROI for your project can help you maximize your investments.
This includes learning how to recognize the difference in benefit types. ROI types may range from actual costs of implementation or long-term cost savings for your operation. In fact, knowing more about how direct and indirect ROI of BPM affects your organization can be key to the success of your short-term and long-term projects.
Direct and indirect ROI both describe the overall return on different parts of a project. Direct ROI revolves around BPM costs that can be quantified easily.
For example, the actual cost of a software platform is considered in calculating direct ROI.
Think of direct ROI as hard, tangible costs that can be leveraged to identify ways to increase your ROI. The simplest way to define indirect ROI is to think of long-term costs. This includes costs associated with adherence to environmental regulations, meeting quality standards, and mitigating risk. Each indirect cost reflects how well your company will do in the future. Employee training would be an example of a value that has an indirect benefit to your company, which you can learn more about by downloading this guide. Of course, indirect ROI may also have benefits for short-term savings as well.
The direct ROI of BPM goes back to knowing how to manage specific, finite costs within your project. This includes the immediate costs of implementing a new BPM platform, such as purchasing new computer terminals, maximizing your investment. Process management naturally leads to lower costs and better overall visibility. But, the direct ROI from effective process management continues to benefit your project in the following ways:
Direct ROI helps you plan for the immediate future of your organization. And, it can help you maximize your investments in Oracle Primavera, risk management programs or other resources.
Indirect ROI reflects costs that warrant the subjective evaluation, which are integral in devising a strategic direction for your company, reports BMPInstitute.org. A strategic direction also includes the use of training and any resources that affect the success of your company, as explained in a previous blog post. For example, completing training to use BPM tools might be key in unlocking higher ROI.
Reduced future costs in acquiring new clients reflect indirect ROI as well. Since you can approximate value, it does have an influence on your ROI calculation. Yet, you can reduce its impact by using existing BPM data sources to create more-accurate evaluations. Calculating indirect ROI results in the following benefits:
Like any ROI calculation, you need to know what you have before you can take full advantage of your investments, such as the investment discussed in this ebook. To calculate direct ROI, you need a list of the actual expenses incurred from implementing BPM in your project. Calculate direct cost savings for each expense. For example, assume BPM implementation results in a 20-percent cost savings of project management platform costs overall. Next, add the cost savings to your original expected profit. Divide the sum by the total costs of process management implementation.
Direct ROI = (Total “Hard” Cost Savings & Benefits / Total Expenses of Implementation) * 100
Indirect ROI calculations are more complex. This is because the initial values needed to perform the calculation are more difficult to obtain, such as reduced costs of growing your client base.
Determine the costs associated with maintaining your project without process management, such as regulatory, quality, new client acquisition or risk costs. This is your control value.
Define the projected cost savings of maintaining your project after BPM implementation in relation to compliance, quality, client acquisition, and risk. This is the projected net benefit on indirect factors.
Indirect ROI = (Projected Net Indirect Benefit / Control Value) * 100
Depending on who describes the calculations, terminology for values may vary from source to source. However, the base formula remains the same. Both results for the general formula must be multiplied by 100 to determine an ROI percentage.
Note: In some cases, the parenthetical calculation in ROI may result in decimal, integer or another number. For example, $29,000 in Project Benefits divided by $20,000 as the Control Value results in 1.45. Multiplying this value by 100 results in a 145-percent indirect ROI.
Automation and standardization have benefit, but vague references to the possible value of Business Process Management (BPM) isn’t enough for your management team. You need hard figures. So how do you get them?
Consider some of these facts:
1. Direct Financial Impact (Gain/Loss) – After BPM | ||||
Saving on Activities due to… | Approximate Saving (+/- 20% ROE) | |||
%/Month 1 | Equiv of Staff/Yrs2 |
$ Approx3 | ||
End -2 End Documentation | 10% | 0.2 | 16000 | |
Efficiency on GAP Remediation | 15% | 0.3 | 24000 | |
Process Automation | 20% | 0.4 | 32000 | |
Smooth Handovers (Reduced rework) | 10% | 0.2 | 16000 | |
Reporting Automation | 10% | 0.2 | 16000 | |
Billing Automation | 15% | 0.3 | 24000 | |
Work Flow Events Automation | 20% | 0.4 | 32000 | |
Regulatory Fines/Expenses | 15% | 0.3 | 24000 | |
Project Management | 20% | 0.4 | 32000 | |
Overall Improvement | 135% | 2.7 | 216000 | |
2. In-Direct Financial Impact (Gain/Loss) – After BPM | ||||
Saving on Activities due to … | Approximate Saving (+/- 20% ROE) | |||
%/Month 1 | Equiv of Staff/Yrs2 |
$ Approx3 | ||
Standardized Approach & Procedures | 10% | 0.2 | 16000 | |
Standard error codes | 5% | 0.1 | 8000 | |
Streamline Alerts & Notifications | 10% | 0.2 | 16000 | |
Ease of Change management | 15% | 0.3 | 24000 | |
IT Interaction and Modification | 15% | 0.3 | 24000 | |
SLA & Audit support | 10% | 0.2 | 16000 | |
Employee Satisfaction | 10% | 0.2 | 16000 | |
Reduction in External BPM SME | 30% | 0.4 | 32000 | |
Overall Improvement | 105% | 1.9 | 152000 | |
Years | BPM Investment($) 4 |
Approx Exp. ($) | Direct Impact Savings |
Net Benefits (Excl. indirect Benefit) $ | |
Licenses | FTE (Consult)5 | (4K + FTE*85K) | |||
1 | 4000 | 2 | 164000 | 216000 | 52000 |
2 | 4000 | 0.75 | 64000 | 216000 | 152000 |
3 | 4000 | 0.5 | 44000 | 216000 | 172000 |
4 | 4000 | 0.1 | 12000 | 216000 | 204000 |
5 | 4000 | 0.1 | 12000 | 216000 | 204000 |
Total Investment | 296000 | Total Saving | 784000 |
Total Investment = 296000 (Over 5 years)
Total Saving (Excluding in-direct savings) = 784000
IRR (Companies rate of return) = 6% (Usually between 6 % – 8%)
Gain or Loss on Investment ($) = 488,000 Term =5
ROI (%) = 164.9% S
Simple Annualized ROI (%) = 33%
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PERICENT - A DOCUMENT AND PROCESS AUTOMATION COMPANY
FEATURES | Enterprise Edition |
---|---|
Access Controls | |
Encryption | |
Version Control | |
OCR for Image Text Search | |
Bulk Upload and Download as Zip | |
Full Text Search | |
Stamping | |
eForms Management & Publish | |
Direct Email Capture & Email Filter | |
Document Sharing via Email(ticket/download) | |
Document Rating | |
Document Tags | |
Document Archiving | |
Backup Management | |
Document Indexing | |
Metadata & Template Management | |
Document Sharing via Email | |
Collaboration | |
Compliance Management | |
Detailed Audit Trail & Reporting | |
Multi Tenancy | |
Workflow Design & Execution | |
Multi-lingual Support | |
LDAP / Active Directory Access | |
Web Services API | |
Document Scanning & Capturing | |
Meta Template & Tagging | |
Document History | |
Google Docs/MS Office Integration | |
Watched Folder Document Indexi | |
Sharing Document with other Tenant & Publically | |
Document Annotations | |
Digital Signature | |
Event Subscription & Notifications | |
Event Calendar/Scheduling Task | |
Mobile App (Android/iOS/Windows) |
Key Features | Standard Edition |
---|---|
Configure different levels of permission to multiple users or roles. | |
Encrypted Transmission and Storage of Documents | |
Transparently manage and control multiple versions of any document | |
Optical Character Recognition for text search on any Image Document | |
Bulk Upload of Multiple Documents and Download Multiple Document as Zip | |
Document Searching by Full text, Meta Data, Tag and Many More. | |
Design, Edit, Control and Apply Multiple Stamps | |
Capture Data and Generate Predefined Documents in PDF using eForms | |
Direct Email Capture by Individual User & Email Filter | |
Document and Folder Sharing to External Parties via | |
Document Rating by Multiple Users | |
Apply Multiple Free or Predefined Tags on Documents | |
Configure Document Archiving Bundle of Old Documents | |
Backup Management | |
The document gets Automatically Indexed in the Repository | |
Configure Different Metadata Template to Assign Category to a Document and Custom Indexes | |
Various Options to Share Documents via Email (Attachment, Encrypted Document, Download Ticket) | |
Built-in Calendar, Task Definition and Assigning to Multiple Users | |
Various Compliances ISO 9001:2018, ISO27001, SEC etc | |
Detailed Audit Trail of User Activities | |
Setup of multiple isolated repositories with specific users | |
Very Simple to Design of Various Document Intensive Proceses like Various kinds of Approvals | |
It supports the search of documents in different languages | |
LDAP / Active Directory Access | |
External Integration API | |
Document Scanning & Capturing | |
Meta Template & Tagging | |
Document History | |
Google Docs/MS Office Integration | |
Watched Folder Document Indexi | |
Sharing Document with other Tenant & Publically | |
Applying Multiple Annotations on Document Preview and downloading PDF document with annotation | |
Configure Organization Level Digital Signature and Digitally Sign any document by users of the system | |
Monitor Documents with Event Subscription & Notifications. | |
Event Calendar/Scheduling Task | |
Mobile App (Android/iOS/Windows) |
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