Automation is everywhere. No, really, it is. It might seem like some new-fangled technology drive, but the fact is we’re interacting with automated systems all the time, from your email newsletter subscriptions to the movies that Netflix recommends to you. Even your basic thermostat at home is an automated system.
And further ‘personal’ automation is slowly – oh-so-very slowly, not to mention expensively – filtering into our homes. Think the ‘Internet of Things’. Think door locks and home CCTV operated by smartphone. Think of a future where people laugh at the ‘good old days’ when people used to manually draw the curtains (yes, automated shades are real because of course they are).
Workplace automation, on the other hand, is well and truly entrenched around the globe. But while the renaissance quietly rolls out across offices and factories, the growth and popularity of such technologies is deeply dividing industry figures.
So, how will automation impact…
Your workforce
One argument that frequently crops up regarding automated systems is the impact of employment. If robots are replacing jobs that were typically carried out by low-paid manual labourers, doesn’t that mean workers are going to face unemployment?
The true answer sits in that ambiguous grey area. Yes – certain jobs will, in time, be relegated to robot roles. No – that doesn’t automatically mean a decreased workforce. What automation actually allows is for workers to work on tasks that require human intelligence. Think of the barcode scanner – one of the most ubiquitous automated systems in the world. Its introduction, far from decimating shop workers, actually led to increased employment.
As our old friends McKinsey & Co. explain:
‘Even when machines do take over some human activities in an occupation, this does not necessarily spell the end of the jobs in that line of work. On the contrary, their number at times increases in occupations that have been partly automated, because overall demand for their remaining activities has continued to grow. For example, the large-scale deployment of bar-code scanners and associated point-of-sale systems in the United States in the 1980s reduced labor costs per store by an estimated 4.5 percent and the cost of the groceries consumers bought by 1.4 percent. It also enabled a number of innovations, including increased promotions. But cashiers were still needed; in fact, their employment grew at an average rate of more than 2 percent between 1980 and 2013.’
And the money saved and gained by businesses is typically reinvested in its workforce, granting them new skills and creating new avenues of employment. Which leads us to…
Your revenue
A business always has its eye on the bottom line. This is one of the great attractions for automated systems – because that increased productivity leads to increased output, which equals increased revenue.
In the academic paper ‘Robots at Work’, Georg Graetz of Uppsala University and the LSE’s Guy Michaels discovered that, between 1993 and 2007, automated systems encouraged the average GDP of countries to leap by 0.37%. That was ten years ago, when automation was still an unknown quantity. Today, that figure is likely to be higher. Indeed, according to technology firm ServiceNow:
‘Highly automated organisations are six times more likely to experience annual revenue growth of 15 per cent versus companies with low automation.’
So, for example, businesses that who are, on average, 61% automated saw more than 20% growth in revenue. Compare this to companies who saw zero or negative revenue growth – on average, just 35% of their business is automated. Automation, then, is a route to the competitive edge. Or, as ServiceNow’s chief strategy officer Dave Wright put it:
‘The financial payoff for automation is one companies can’t ignore.’
Your costs and overheads
Directly opposing that increase in revenue is the cost of automated systems. This is often cited as a major factor when it comes to upgrading systems and automating parts of your business. And there’s no getting around it: If you’re automating, you’ll need to speculate to accumulate.
However, the time between speculation and accumulation will differ depending on your industry and chosen software or hardware. For certain applications, it’s possible to see a near-immediate return on investment.
For example, here at my company, accessplanit (this won’t get salesy, I promise), we deliver training management software for training companies. One of the most popular modules is our online course booking feature. As such, from the moment the system is implemented, organisations can start to accept online purchases. So, for a company that previous didn’t offer such a service or offered poorly designed online booking, it’s clear how they can begin to immediately profit from automation.
Different suppliers will offer different pricing models – from off-the-peg solutions charged at a flat-rate to customised systems with a modular pricing scheme. Or, to put it another way, you pay for the modules that your business actually uses.
Whichever system you choose, there will be a cost. But by the time you’re genuinely considering investing in automation you’ll have done all the appropriate research, including free trials and demonstrations. That means you’ll be armed with an incredibly well-informed idea of what your expected cost-versus-profit will be.
Your business productivity
The most convincing argument for automating elements of a business is the most obvious one: Productivity. Indeed, experts liken the current productivity increase to that of the Industrial Revolution.
The research in ‘Robots at Work’ show that, across 17 countries, the average labour productivity increased by 0.36% between 1993 and 2007. Elsewhere, McKinsey & Company, the global management consultancy, estimate that between 2015 and 2065, automation will jump-start productivity from 0.8% to 1.4%.
Further, Graetz and Michaels showed that the use of robots within the workplace actually led to greater human productivity, adding more value to the economy, compared to productivity levels prior to the introduction of industrial robots.
Which makes sense, really, since automation takes on the repetitive and routine tasks, allowing employees and employers to focus on furthering business objectives.