As the technology grows in maturity, the cost of not adopting automation grows, he writes Rajith Haththotuwegama, Data Analytics and Automation Manager at Tecala.
Automation technology has long been recognized as having significant value. Five years ago, McKinsey & Company reported that a review of 16 case studies revealed an ROI range of “between 30 and up to 200 percent in the first years” for automation technology.
The financial savings were just a hint: organizations that implemented automation also typically saw improvements in customer and employee experience that multiplied the overall value they gained from implementing automation.
To observers, these automation projects looked incredibly valuable, but at the time they could also be quite expensive to operate. The initial cost of the software was high and customers then had to fully configure the software to perform tasks in an automated manner. The skills needed to do this in-house were not widely available and therefore also expensive. These obstacles have undoubtedly limited the potential reach and benefits of automation.
A lot has changed in those five years. Automation software can now be used as a service and access to skilled people has improved significantly. The costs of automation projects are decreasing dramatically and are now within the reach of medium-sized organizations, not just large ones.
As more organizations embrace automation and realize the benefits and cost savings, FOMO – the fear of missing out – is growing.
Calculation of idleness
With the cost of implementing automation no longer a key issue facing adopters, attention has shifted to another set of “costs” – the cost of not implementing automation. These costs can be significant and should not be underestimated. They could deprive organizations of happy and talented employees, opportunities for future growth and their competitive advantage.
In my opinion, the costs of not implementing automation fall into two broad categories: people and growth. Both are inextricably linked.
First, organizations that do not automate will find it challenging to keep their employees happy and engaged. People want to do meaningful work. They want to spend their time focusing on the most important, valuable and higher aspects of their role.
Repetitive, time-consuming or otherwise boring aspects of their role are ripe for automation, and people increasingly know and want this automated help. This could come in the form of a virtual associate who can be recruited to handle tasks such as the necessary – but mundane – preparation of month-end reports.
People who are stuck automating tasks may also feel that they have limited options for career advancement. They may not have time to learn new skills or brush up on existing ones. However, if some of their workload were automated, it would free up valuable time that they could reinvest in expanding their skills or inventing and executing new, high-value projects for their employer.
Businesses are increasingly disenfranchised at the cost of having people do automated work. The employee disengages, or worse—they see other employers who are more forward-thinking in embracing automation and tools and technologies that improve the employee experience, and vote with their feet.
This opens up the first organization to significant recruitment and retraining costs. It can take a year or more for a new employee to get up to speed. These costs and efforts are best avoided in today’s hiring market and can be avoided by allowing employees to do their best work more (or ideally all the time) of the time.
Further reading: How digital tools can improve the recruitment process.
When the execution of a process is too dependent on the presence of one person or certain persons present, it leads to key person dependency. Such addictions can limit a person’s ability to take time off, whether for vacation or illness. It makes sense to automate the dependencies of key people so that the organization has a systematized backup option when needed.
In summary, some of the human-related costs of not automating include: process disruption, too many dependencies on key people, the real possibility of disgruntled employees and their departure, and incurring significant recruitment costs. But what are the costs of growth in the absence of automation?
As organizations grow, they usually add more people, and the relationship between these things is fairly linear. But automation can help scale an organization. Specifically, when automation is used to handle repetitive transaction processing or grunt work, it frees up staff to do things that machines aren’t yet good at, such as customer service and customer relationship management.
In addition, organizations may find that much more can be done with the same size team. A team of people, supported by a team of virtual collaborators, is becoming increasingly common, allowing an organization to scale and take on more customers without having to hire huge numbers of new employees.
However, the cost of not automating is that growth is too expensive. Organizations can break this cycle and foster a new growth mindset by using automation to support their goals and ambitions.
To avoid incurring the costs of not implementing automation, organizations that have not yet considered automation, or that have experimented but parked their initiatives, should strive to quickly restart it as a matter of course.
Supported by intelligent automation as a service and backed by deep knowledge, mid-market organizations and their larger relatives now have a strong chance to succeed with automation initiatives.