How can you prove the ROI of IT operations automation to stakeholders?

1 Define your automation goals and metrics

Before you begin automating your IT operations, it is essential to have a clear vision of what you are aiming to accomplish and how you will measure your progress. Align your automation goals with your business objectives and customer needs, and determine the key performance indicators (KPIs) that will evaluate your success. For instance, some common automation goals and metrics include reducing operational costs by automating repetitive tasks and workflows, increasing service availability and quality by automating incident response and recovery, enhancing security and compliance by automating patching and auditing, as well as accelerating innovation and delivery by automating testing and deployment.

2 Calculate your automation costs and benefits

When defining automation goals and metrics, it is essential to estimate the costs and benefits of your automation projects. This includes direct and indirect costs and benefits, as well as short-term and long-term impacts. Factors to consider in your calculation include the upfront and ongoing costs of acquiring, implementing, and maintaining automation tools and platforms, the time and resources needed to train IT staff and users on the solutions, potential savings from reducing manual labor, errors, downtime, and risks, as well as expected improvement in customer satisfaction, retention, and loyalty.

3 Use a standard ROI formula or model

To quantify and compare the value of your automation initiatives, you need to use a standard ROI formula or model that can capture the costs and benefits over time. There are different ways to calculate ROI, but one of the most common and simple methods is:

ROI = (Benefits - Costs) / Costs x 100%

This formula can give you a percentage that indicates how much profit or loss you can expect from your automation investment. However, you should also consider other factors that can affect your ROI, such as the payback period, the net present value, and the opportunity cost.

4 Collect and analyze data from multiple sources

Validating and supporting ROI calculations requires collecting and analyzing data from multiple sources that can provide evidence of automation outcomes. Quantitative and qualitative data, as well as internal and external data, should be used for a comprehensive and balanced view of automation performance. Automation tools, ITSM systems, customer feedback surveys, and BI/analytics tools can all be used to generate reports, track SLAs, measure customer satisfaction, correlate automation data with business/financial data, and visualize results. This will help you make informed decisions about your automation projects.

5 Communicate your automation ROI to your stakeholders

The final step is to communicate your automation ROI to your stakeholders in an effective manner. It's important to tailor your message and format to your audience, while emphasizing the advantages and value of automation. Additionally, any challenges or risks that you faced or anticipate should be addressed, as well as how you plan to overcome or mitigate them. To help illustrate your success stories and best practices, you can use stories and case studies. Charts and graphs can be used to visualize automation data and trends, while testimonials and quotes can showcase customer feedback and endorsements. Furthermore, benchmarks and comparisons can showcase your competitive advantage and differentiation.