Even before the Covid-19 pandemic, the push for organizations to automate manual processes was gaining steam. The pandemic, partially by highlighting how vulnerable manual processes were to disruption, accelerated and expanded the move to automate. Recent forecasts on automation spending accumulated by Statista show that the trend will remain hot for some time. Worldwide spending on Robotic Process Automation (RPA) is forecast to grow from $5.4 billion in 2021 to $10.4 billion in 2023. For Intelligent Process Automation (IPA) the numbers are $10.9 billion in 2021 to $13 billion in 2023. Unfortunately, not all that money will be well spent.
Research from an Ernst & Young study conducted in 2019 found that somewhere between 30 to 50 percent of initial RPA projects failed. Other research that looked at RPA failures found that most project failures are not caused by the technology deployed – but are attributable to the “human” side of the endeavors.
The Challenges of Automation
The four main challenges to successful automation are cost, skills gaps, inadequate planning/faulty strategy, and organizational barriers. Understanding how to address each of these challenges can be the difference between success and disappointment:
Cost – A third of organizations cite cost as the number one reason they haven’t automated. Looking at the non-labor cost of automation, many organizations already own line-of-business applications with automation capabilities baked in and/or the no-code/low-code tools that can be applied to automate processes but are unaware of their applicability to automation. Keep in mind that part of the cost of automating will depend on the types of tasks being automated.
Skills gaps – The skills that quickly come to mind when thinking about the requirements for successful automation include business knowledge, process analysis, software development, and IT project management; however, these are not the only skills needed. Organizations also need people who can work in teams, who can troubleshoot problems as they arise, who can communicate effectively, and who are detail oriented. The Association for Intelligent Information Management (AIIM) estimates that 30% of organizations lack the skills needed for automation. A McKinsey & Company report surveyed 1,500 executives across all industries and regions, 66% responded that “addressing potential skills gaps related to automation/digitization” was a top-ten priority. Almost 30% put it in their top five priorities. (See graphic below)
Inadequate planning and/or faulty automation strategies – One-fifth of organizations say they lack a clear automation strategy. A well-conceived automation strategy should fulfill several requirements:
- describe the business problem(s) being addressed and identify the processes most ripe for automation,
- optimize the process before automating it so a faulty manual process isn’t replicated as a faulty automated one,
- understand if the automated process can scale,
- identify the skills required and how missing skills can be acquired,
- gather user input to ensure details are not overlooked, and
- assess current and future interoperability issues with other internal systems.
Organizational barriers – Automation entails change and change breeds uncertainty and resistance. AIIM has found that 19% of organizations worry about change management and job losses stemming from automation. Organizations that don’t spend enough time and resources addressing the change management aspects of automation and communicating the impact of automation on jobs will likely experience higher turnover, poor morale, and a greater likelihood of automation project failure.
Laying the Groundwork for Successful Automation
A fuller understanding of the drivers and barriers to automation gives decision makers food for thought when weighing whether to proceed – or not. The more insight leaders, stakeholders, and employees have into what is entailed in applying automation to their operations, the greater the likelihood of success. Two supporting actions that can help lay the groundwork for automation success are selecting the most fruitful targets for automation and educating oneself and others about automation.
Oftentimes the most fruitful targets for automation are those processes that cross departments, systems, and organizational boundaries. Unfortunately, these targets can also be among the hardest to automate because of chaotic information siloes. Consider automating an organization in which the Accounting Department still relies on an aging “green screen” legacy system for the most current financial data. It’s safe to assume that this data is not easily accessible to other systems. To make it accessible someone must manually enter this data into multiple systems (think of the AS 400 days). The cost to the organization is not only the manhours someone must spend entering the data but the very real prospect of a data entry error costing the organization thousands (even millions) of dollars.
Educating oneself and others about automation should be a high priority. Many missteps can be avoided if those people involved in the effort know how to match the right technologies to the organization’s problems, understand the core process technologies, and recognize the practical benefits of automation before embarking on an automation endeavor.
Matching Technologies to the Organization’s Problems
Fifty percent of organizations struggle to match the appropriate technologies to the problems the organization is attempting to solve. Of the two basic skills needed for this challenge – understanding business processes and how to optimize them – and knowledge of the tools best suited to automate the selected processes, the latter is the most difficult for most organizations to address. Having staff with the in-depth experience needed to select, configure, and deploy the proper automation tools is rare. Turning to outside consultants can be effective but it’s best to bring in professionals who are knowledgeable and experienced with an array of tools and are agnostic about which is used.
Understanding the Core Process Technologies
Forty-seven percent of organizations don’t have a clear understanding of the full capabilities of automation technology. This can lead to inefficiencies and wasteful spending. One example is an organization that acquires one tool to address one process and another tool for another process not recognizing that there is an alternative tool that could have addressed both needs – perhaps at less cost than either individual tool. The automation tool ecosystem is too crowded and changes too quickly for most firms to keep up. Getting guidance from experts in the tool ecosystem can oftentimes be the fastest, safest, and least expensive way of understanding the technologies and their applicability.
Recognizing the Practical Benefits of Automation
There are 3 primary benefits of automation: cost savings, process transparency, and improved staff alignment/allocation.
Cost savings – Too often, when discussing savings resulting from automation, only the dollar savings from cutting the cost of labor is considered. Efficiencies resulting from automation can also include a more extensive/effective use of tools the organization already owns, using process assessments across functional areas to standardize on a smaller number of solutions (or even one), and a higher than anticipated ROI from streamlining outdated/inefficient existing processes.
Process transparency – Going through the exercise of implementing automation uncovers and highlights flaws embedded in existing business processes. It offers the organization opportunities to improve inefficiencies that might not have been apparent.
Staff alignment/allocation – Automating manual processes, especially those that don’t require much thought or creativity, frees employees for other more challenging/rewarding activities which can improve morale, reduce staff turnover, and increase profitability.
A Few Last Thoughts and Recommendations
Automation whether it’s business process automation, intelligent process automation, or robotic process automation, is a journey not an endpoint. As processes are refined and technologies evolve, opportunities arise to further improve operations and increase profitability. The organizations that continue to assess and deploy beneficial automation will reap greater rewards. A few points to keep in mind:
- Tool agnosticism is important. Be wary of picking a tool before you more fully know your needs and the tool ecosystem. Trying to mold a tool to fit requirements for which they are unsuited can be costly and unrewarding.
- Start the effort with a proof of concept. If you are unfamiliar with performing an automation proof of concept, get outside help. Such help is inexpensive and can save both time and dollars spent chasing infeasible ideas.
- After selecting a tool that best fits your needs, you can start the process of building out that solution using the best practices associated with that specific tool. Consulting industry experts can help as they know the potential minefields and can save you time and money.
If you need help or just more insight into what’s involved in assessing/deploying automation technologies, contact us.