“Automation First” Increases Cash Flow


One principle most business leaders have learned to embrace is the principle of proving a positive net present value (NPV) or a strong internal rate of return (IRR) for capital investment decisions and projects. The corporate finance methods of NPV and IRR highlight the time value of money, which posits that a dollar today is worth more than a dollar tomorrow. In other words, smart investments are those in which the present value of cash inflows are greater than the present value of cash outflows. When an “automation first” policy embraces this principle, it can drive a truly successful bottom line.

Astute leaders today understand how automation drives a successful bottom line that benefits the entire organizational ecosystem. In fact, an automation-first policy will create immediate positive NPV or strong IRR. Our experience has shown that automating work processes can result in immediate present value cash inflows and overall return on investment (ROI) of more than 700 percent.

While many leaders think they should automate only where necessary or automate one process at a time, an automation-first policy allows business leaders to replace wasteful manual labor with a digital workforce that improves productivity more quickly. Capital investments in automation take advantage of the time value of money by swiftly providing benefits over and above mere financial incentives, including cost savings, revenue increases, expense reduction, productivity improvements, increased reliability, error reduction, enhanced audit readiness and increased efficiency. 

The following best practices will help codify the automation-first vision:

  • Create a centralized and/or federated approach early in the automation roadmap to provide structure for creating an automation-first culture. The approach should include establishing a designated group to serve a single point to identify opportunities and priorities, in addition to implementation, monitoring and management of the automation-first policy.
  • Develop business plans and policies that support organizational change.
  • Establish a cross-functional collaborative culture throughout the business to facilitate the evaluation of processes (business and IT functions) for automation readiness.
  • Support best practices to facilitate an automation-first ethos in functions like HR, IT, supply chain and finance to ensure increased cash flows and maximum benefits.

ISG helps organizations achieve financial and operational success with their digital workforce investments. With an extensive automation practice and expertise in all automation software capacities, ISG can help organizational leaders leverage best practices for an automation-first policy. Contact us to find out how we can help you think big, start smart, scale fast and prove value.