Abstract:
The rapid evolution of digital technologies has positioned automation in IT incident management as a pivotal
strategy for mitigating financial losses and optimizing operational efficiency. However, the financial implications
of investing in automation have yet to be fully explored. This study provides a comprehensive cost-benefit analysis
of implementing automation in IT incident management, with a focus on its effects on operational costs and
financial losses. The study was guided by the cost benefit analysis theory. A descriptive research design was
adopted, targeting IT departments within major corporations. The sample size was determined using the Krejcie
and Morgan formula (1970), ensuring statistical representativeness. Data were collected via structured
questionnaires, and both descriptive and inferential statistical methods were employed for analysis. The results
indicate that automation led 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 revealed strong positive relationships between reductions in operational costs and financial losses (r =
0.748, p < 0.01), as well as between these reductions and the perceived value of automation (r = 0.685 to 0.724, p
< 0.01). Furthermore, regression analysis confirmed that automation has a substantial impact on financial
outcomes, with the regression model accounting for 72% of the variance 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 provides significant financial advantages, recommending
that organizations implement advanced automation solutions to enhance IT incident management and reduce
financial losses.
