The success of any automation project should be measured similarly to other business process alignment and outsourcing projects. For example, an outsourced project could be measured in terms of costs, quality, and timeliness. Similarly, a KPI alignment project could be measured by comparing the achieved KPI improvement against the targeted improvement. The success of a deductions automation project should measure:

1. Operational efficiency in terms of throughput ? deductions resolved per unit of time
2. KPI improvement using software automation ? Days Deductions Outstanding, # open deductions, dollars of open deductions, etc.

The automation of deductions will generate savings in the following categories:

1. Process Improvement Savings

We have discussed the low-value tasks related to deductions in the previous sections. Automation could eliminate these low-value tasks and provide improvement in the following eight areas:

• Identifying deductions
• Retrieving and associating backup documentation
• Researching and validating deductions
• Issuing credit and clearing deductions
• Generating deduction denial and other correspondence
• Improving interdepartmental communication
• Improving customer communication
• Reviewing other / ad-hoc deductions

Each of the steps above have a certain percentage of manual activity associated with it that could be automated. For example, backup retrieval automation could reduce manual tasks by 40%-60% and deductions research automation could reduce manual tasks by 20% to 30%.

2. DDO Improvement Savings

For deductions team, DDO is an important KPI to track and measure. A higher DDO is an indicator of lax processes in the deduction resolution cycle. Best-in-class automation helps to decrease DDO by reducing:

1. The time taken to determine the validity of deduction once it arrives
2. The time taken to recover an invalid deduction

The median time taken for determining validity is around 30 days, while the time taken for recovering an invalid deduction is approximately 60 days[1]. Streamlined and automated business processes could help reduce DDO by more than 30%.

3. Deduction Recovery Improvement Savings

Invalid deductions for some industries go beyond 10% of the overall deductions, while the recoveries could be a meagre 50%. Due to lack of resources, follow-up is not systematic and invalid deductions are often not recovered. From our experience of working with multiple customers, we have seen that a 10% improvement in deduction recovery for a $1 billion company would roughly result in hundreds of thousands in savings annually. With the right solution, the coverage of deductions and the percentage of deductions recovered could be improved to a considerable extent. 7 Source: Customer Deduction Survey: Attain 2018 deduction Survey: CRF: Take Control of Customer Deductions