Citation:

Amit Mangal, 2022. "Cost-Benefit Analysis of Implementing Automation in IT Incident Management to Minimize Financial Losses" ESP Journal of Engineering & Technology Advancements  2(2): 27-34.

Abstract:

The rapid advancement of digital technologies has made automation in IT incident management a crucial tool for reducing financial losses and improving operational efficiency. Despite its importance, the financial implications of automation investments remain inadequately explored. This study presents a comprehensive cost-benefit analysis of implementing automation in IT incident management, focusing on its impact on operational costs and financial losses. Utilizing a descriptive research design, the study targets IT departments across major corporations, with a sample size determined using the Krejcie and Morgan formula (1970) for representativeness. Data collection involved structured interviews, and the analysis employed both descriptive and inferential statistics. Findings demonstrate that automation leads to significant reductions in operational costs (mean reduction of 28.5%, standard deviation of 12.7%) and financial losses (mean reduction of 35.2%, standard deviation of 15.4%). Correlation analysis reveals strong positive relationships between operational costs reduction and financial losses reduction (r = 0.748, p < 0.01), and between these reductions and the perceived value of automation (r = 0.685 to 0.724, p < 0.01). Regression results further confirm that automation significantly impacts financial outcomes, with a model explaining 72% of the variability in financial performance (β for operational costs reduction = -0.45, p < 0.01; β for financial losses reduction = -0.57, p < 0.01). The study concludes that investing in automation technologies offers substantial financial benefits, recommending that organizations adopt advanced automation solutions to enhance IT incident management and mitigate financial losses.

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Keywords:

Automation, IT Incident Management, Financial Losses, Cost-Benefit Analysis, Digital Transformation.