Automation Is Becoming a Business Imperative: Don't Wait Until It's Too Late
President, Exela Technologies
Machines haven’t yet supplanted human workers en masse, but at the World Economic Forum’s 2019 meeting in Davos, Switzerland, corporate executives revealed they’re facing massive pressure from shareholders and boards to meet short-term profit demands. Automation has been the response across the board.
In a 2017 global survey on robotic process automation, Deloitte found that more than half of its respondents were already using machines to perform jobs previously carried out by humans.
Job security concerns aside, people tend to agree that machines make work easier. In fact, in a survey by KRC Research, nearly 80 percent of executives polled agreed that they could save 360 hours a year through automation. These findings aren’t just important for leaders of large businesses, either. As a startup founder, you should be paying attention, too.
Where can automation lend a hand?
Labor is typically one of the largest line items on a business’s balance sheet -- if not the largest. You don’t have to look far to find examples of how technology can help you cut down labor costs: fewer opportunities for human error, fewer unproductive work hours, less time lost to vacation or personal days, reduced training and HR costs, lower chances of on-the-job injuries, etc. But the benefits extend beyond improving financial health.
Speed is another area in which automation shines. Automation technology can enable you to bring products to market faster and fulfill contract requirements sooner (and enable you to take on more contracts). It also puts in longer hours than competitors can when they rely solely on a human workforce.
So, really, the question is no longer whether you should automate but what and where you should automate. First, identify repetitive, manual processes. Example? Consider mail management: Manual sorting is slow, mail gets lost, junk mail is inescapable, routing errors are frequent, and visibility into processing metrics is low.
Similarly, front-office workers may experience frequent downtime and have little direct impact on ROI. In both cases, basic automated technologies may be suitable replacements for human laborers.
Additionally, evaluate the efficiency of your data ingestion and the handling of workflows to uncover business areas that could benefit from cognitive automation. If your workflow is dominated by paper documents and requires a large data-entry staff, for example, cognitive automation will provide a major benefit.
Are you ready to make the leap?
Effective technology implementations typically involve significant up-front time and capital investments. Internal audits are necessary to determine the size and scope of your needs, and an automated system must be piloted and tested before use. Prior to making a major change, you should assess current production processes to ensure that contracted service-level agreements will be met while an automation strategy is being implemented.
If you’re trying to decide whether a commitment to automation is right for your company, here are four big questions you need to ask yourself:
1. Is the process scalable?
Automating a few disparate tasks isn’t going to show much ROI. On the other hand, automating the work of many small teams performing various intertwined tasks will provide greater value and may significantly increase workers’ productivity. In fact, the study from KRC Research found that 53 percent of employees surveyed said that automation could save them 240 hours per year.
Automating marketing efforts is a great example of a scalable process that can take tedious tasks off employees’ hands. Of course marketing is crucial for budding businesses as they build their brand familiarity among consumers, so it may seem counter
intuitive to try to build real connections by automating the process.
But this task doesn’t have to be all that impersonal. For example, you can automate systems to personalize emails and send them out at certain times along the buyer’s journey.
Whatever process you hope to automate, start by determining whether your approach could be expanded to cover a sizable portion of your total operation. The more comprehensive your automation strategy, the greater your returns.
2. Is the margin of error low enough?
When precision is imperative and tolerances are small, machines make great workers. For example, if you have an employee whose job is to cut pieces of metal to specific lengths, that person is unlikely to be able to recreate the tolerance levels of a machine -- at least not at the same speed -- no matter how long he or she has been cutting metal.
When repetitive processes have exacting standards, machines almost always do a better job.
Take Adidas’ Speedfactory -- whose second outlet opened in Atlanta last year. This factory harnesses an automated engineering process to create customized shoes. According to Adidas, this automation technology has enabled the company to produce shoes at a pace three times faster than that of manual means. And that speed allows Adidas to keep up with demand and ensure quality control, as making these customized shoes requires great precision.
3. Are you manually processing big data?
Automation technology is not limited to physical processes. We’re now seeing useful applications of cognitive automation software capable of ingesting massive amounts of structured and unstructured data, analyzing it and generating valuable business intelligence to enable better decision-making. If you have workers crunching numbers and running analytical models, there may be room for intelligent systems to assist with that work or even take it over.
Amazon has used robots for years to help its warehouse workers move products around the premises. Now, the company is also relying on software to make critical inventory decisions once left to white-collar workers commanding six-figure salaries. Amazon's “hands off the wheel” initiative not only helps to reduce costs, but over time will likely lead to better strategic decision-making, as machines continue to learn and improve.
4. Are you ready for the monetary investment?
Before spending big money on expensive software or machinery, look at the financials. Implementing automation often involves a large up-front investment -- and maintaining and improving your technology is an ongoing effort. You’ll likely have to borrow money, so get very familiar with your total labor costs, production estimates, compliance costs, etc.
Map out your time frame for ramping up the technology, how much you should expect to save over a longer period of time and your break-even point.
The good news is that according to Deloitte’s 2017 RPA survey, companies reported seeing payback on their investments in less than a year; robots, the survey showed, provided about a fifth of full-time equivalent capacity. Furthermore, 59 percent of organizations surveyed said that their investment ultimately led to reduced costs.
Your people are often your greatest asset and a key differentiator. But that doesn’t mean you should ignore the potential of automation. Automation can enhance productivity and improve workflows across the board at companies of all sizes. Adding machines and intelligent software to your workforce rarely makes your existing employees useless; more often, it actually makes them even more productive.