Technology enables the automation of activities or services that accomplish specific functions or improve workflow. Business processes exist for many operational aspects of company activities, and leaders planning for their companies’ growth frequently ask me if they should consider automating some of those activities. My answer invariably is that it depends.
Generally, “whether to automate” needs to be broadened from a stand-alone question dealing with a single process to one considering it in the context of an organization’s overarching business strategy. Analysis must first determine the scope of the automation question.
The absolute first thing to avoid doing, though, is having a technical team determine if automation is the correct approach. Technical teams are great at answering the “how” question – how to technically do something – but not at analyzing if it should be done. While such teams are great at understanding how systems can solve problems, translating a technical solution to a business solution is typically not their strong suit. I’d advise bringing technical people into the conversation later, so that they can be told the business reasons for considering automation and the goals being considered – and then let them solve a precisely defined challenge.
Generally, companies struggle with the question of whether to start with a simple process or a larger process. The larger process could be more critical to develop first, which would offer the greatest value from automation in efficiency and savings. See the table below for a comparison between issues related to automating a simple process versus a larger, more complex process.
| Comparison of Automation Efforts: Simple Versus Larger Process | ||
| Issue | Simple Process (Low-hanging fruit) | Larger Process (More critical, more potential gain) |
| Success Speed | Faster – fewer steps | Slower – more steps, more integration |
| Progress | Quick win, but noticeable by fewer individuals | Slower win but more noticeable day-to-day because it touches many individuals and has substantial, palpable impact |
| Chaos Control | Fewer people involved, easier to pay attention as issues emerge, then address them | Process automation time not properly estimated will generate doubts if it exceeds initial timelines and unexpected issues arise. Given the scope of the automation project, it might require extensive retraining and resistance by staff. |
| Process Importance | May not be considered critical in terms of cost savings, efficiency or improvements in customer relations | Larger, more important processes are generally deemed to be critical and likely to be given resources to improve upon them. |
| Return on Investment (ROI) | Lower | Generally, a higher ROI given the span of the process being automated |
Here are some questions that I tend to ask that could help determine which processes offer the most value from automation:
- Are there “paper heavy” processes? Is there a paper form (or e-mail or documents on a server) that gets routed to different participants as part of the process? Do your process workers waste time looking for forms or documents needed to complete a specific step?
- Does the process require manual duplication of data, where something needs to be keyed in from one place to another?
- Do processes “hang” because an individual was not alerted to proceed with the next step? Do other “routine,” time-consuming tasks halt the process in its tracks if the relevant employee is absent, overloaded with work or forgets?
- Are there “repeatable labor” processes, in which individuals do almost the same thing in almost the same way in almost all cases?
If you answered “yes” to any of these questions, you are looking at a process with automation potential. If you’re still not sure whether a process is a good fit for automation, or if you want more time to figure out the impact of such a “yes,” then it’s time to speak to the people who perform the process every day.
Understand though, that these process owners, (people who do it now), might be comfortable with the status-quo; in fact, they might find that the way they do today is ideal. It could be that many of them have already created workarounds to avoid potential process problems. Either way, these details need to be gathered to create an idealized automation scenario that reduces error rates and significantly decreases process cycle times.
To this point, you might have identified the benefit of automation, but what about other factors? Here are some that may lead you to not automate processes:
- Cost of Automation – What is the realistic ROI for automation? Include in this calculation the actual cost of automation, like software and hardware. Additionally, be aware of somewhat hidden costs, beyond salaries focused on this effort, testing the automated process, training cost and productive time lost to eventually become efficient at using the automation.
- What to do with exceptions to the automated process − What percentage of all the cases will follow the automated process and which cases should be handled as exceptions outside of the automated process? Are exceptions easy to identify? Can methods of handling exceptions be included in the automated process over time?
In my work with clients, after we have a clear strategy for growth, I frequently spend a fair bit of time focusing on processes and building models for processes. I ask this question: If business doubled, could you handle it the same way you are now? What generally results is that companies recognize that they have not paid serious attention to their current processes for a long time. The problem is that the processes in place have evolved without anyone having taken a step back to ask if this is the best way to do things. To really understand whether automation makes sense, you may want to start with a re-engineering effort (start with a clean sheet), as opposed to a process-improvement effort. Typically, performing process analysis with clients is quick, with some of the automation opportunities obvious and some processes too inconsistent (no hard and fast decision criteria that is a basis for automation) to automate.
Beyond that, determining the cost-benefit answer requires applying subjective judgment. There are no easy answers here, and even if automation is to be introduced in multiple steps, the order of its introduction is another question to be considered. Fearing their being inadequately prepared to grow, some companies automate too early or automate the wrong processes in the wrong order. More commonly, though, companies automate too late, and the expected economies of scale from growth are not realized because growth both uncovers and introduces inefficiencies.
One more thing: Companies readily automate customer-facing activities to save on the cost of an employee who answers the phone. While this may have obvious financial advantages, it can significantly hurt a company’s relationship with customers.
Automation – the how, what and when – is a key aspect of my consulting engagements related to growth. Let me know if I can help you.
