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September 12, 2016

How Automation Can Increase Your ROI

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#FIJ wins gold in men’s rugby, beating #GBR. Barbara Engleder 

#GER wins shooting gold in women’s 50m rifle 3 positions, beating Zhang Binbin #CHN.” 

These are just exemplifications of the tweets that covered the Rio Olympics, crafted by Washington Post’s new journalist, who worked tirelessly and was ‘recruited’ into the team without any contract for taking weekends off. Meet Heliograf, the unassuming bot running on AI technology with its extensive automated, on-the-spot (and spot-on) coverage of the Rio Olympics that was posted almost in real time on the broadcaster’s Twitter and Facebook channels and website, and its reports and analysis spun out for the real reporters to flesh out on its blog and news stories. It was a way to free up the journalists, so they could get down to doing what they can do best, which is great journalism. Janelle Hill of Gartner asserts that it’s not about taking people out of the process, but getting them back to doing what they are good at.

Automation is intrinsic to our life; without us blinking to notice its backstage presence

Automated storytelling software, or for that matter automation is not new to us. It only continues to enthrall and amaze us while entrenching itself deeper in our everyday lives. Traditionally, the word automation may have flashed images in your mind of the world-class production facility built by automobile giant Toyota, with robot arms swishing at specific angles and AGVs (Automated Guided Vehicles) scuttling around to achieve lean manufacturing and minimization of waste.

Today, there is hardly a chance that automation won’t cross our path in our normal daily routine. For instance after you wake up in the morning, your fitness band will automatically calculate how many calories you have burned during your walk or jog. That’s automation at work. Then there is that ATM you may visit on your way to office to withdraw a few hundred bucks (that’s an automated teller machine, remember?). And when you drive down to office, you may need to push a button on an automated parking system that generates a ticket and lifts the barrier arm (again automation). And this list goes on. At work, you enter all your customer leads data into a CRM. You also notice that the other sales management tool you use has been patched overnight. During lunch, you visit a nearby restaurant and use its tablet to place your meal order. And before you head home, you pick up some groceries from the local supermarket, and pay through the self-checkout system. On returning home, your house lights automatically dim down to suit your liking. Post dinner, you catch up on a tennis match on TV and notice a match-winning decision supported by Hawk-Eye. You surf channels and notice a football referee on field promptly and confidently announcing a critical decision (thanks to the wrist band around his arm that automatically vibrates if the ball crosses the line). Another channel relaying a live cricket match shows a decision supported by the Third Umpire, and later, a batsman being declared ‘not out’ using Hot Spot technology. And finally, before you tuck yourself in bed, you program your geyser to warm up to exactly 85 F at 7 a.m. the next morning.

What are we going to wake up to next?

The Boston Consulting Group reports that robots now perform roughly 10 percent of the manufacturing tasks that can be done by machines. They estimate this figure to surge to 25 percent by 2025.

McKinsey & Company estimates that if an ideal level of automation were reached, then close to 50 percent of all full-time employees in operations could be relieved of their current back-office tasks. The McKinsey Global Institute ranks ‘automation of knowledge work’ at No. 2 on its list of disruptive technologies that are predicted to transform business operations by 2025. Many of the jobs that exist today (more than 100 million!) won’t be around by then. Here’s the kind of optimal staffing that they see in the insurance industry:

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It goes on to estimate that 30 percent or more of all the current work tasks for 60 percent of all US jobs allow themselves to be automated with existing technologies. It goes on to predict that by 2020, customers will manage 85 percent of their relationship with businesses without interacting with a human.

Now, the world is moving towards the next stage of the industrial revolution, where the focus is on building a new generation of cyber-physical systems that improve productivity by delivering fully connected, intelligent manufacturing systems capable of supporting high levels of customization, flexibility, and end-to-end manufacturing process automation.” – marketsandmarkets.com

Research giant Gartner expounds on this: Automation improves accountability, efficiency and predictability, while reducing cost, variability and risk. It predicts that 75 percent of businesses will boast of more than four diverse automation technologies at their workplaces by 2017, as compared to just 20 percent what it was in 2014. And by 2018, 20 percent of all business content will be authored by a machine, taking over several writing job positions.

Stay competitive. Automate!

Most of the newly developed variety of disparate applications you need to get your work done efficiently may not talk to your legacy systems, and the problem with point-to-point integration is that it isn’t scalable. So in the pursuit of your vision of growth and global competency standards, if you are being bogged down with complex and time-consuming regulatory compliance procedures, voluminous file transfers, lengthy onboarding and offboarding practices, or any kind of inefficient routine processes which may be necessary but don’t justify the cost, you would worry about how you’re going to get to the goalpost before your competitors.

When you have a lot of ground to cover, begin with achieving small victories – harvest low hanging fruits that you can easily pluck and reduce your payback period to just about a year, making it easy to justify further investment into automating other processes. Let’s see how others have done it.

7 ways automation can help your business stay competitive

1. Reduce carbon footprint =  save energy = save money

Begin with something relatively doable such as saving on energy cost. Keep a watchful eye on those PCs that haven’t been switched off at night, the extra lights that can be switched off under which there are no customers currently, or even the AC or heating that can be turned down cyclically at optimal levels. A study conducted by the Consumer Technology Association (CTA) states that total energy savings from initiatives taken from individual levels at homes can range between 0.3 to 1.1 quadrillion BTUs, which equates to one percent to five percent of the total energy consumption from the residential segment. Home automation includes smart blinds, light fixtures and thermostatic controls for HVAC systems.

The Princess Alexandra hospital NHS trust has carved out savings of £27,000 for itself a year after embracing automation, and has reduced its carbon footprint by more than 420 tons. Another organization, Arup, distinguished for its sustainable designs that transform the built environment, automated a scheduled shutdown of its PCs every day at 7 p.m. across the U.K., Middle East and Europe, and is saving approximately on one third of its PC energy cost, while reducing 442 tons of CO2 per year. A large telecommunications company, after reaping the benefits of automation in its billing department, extended it to the other departments to support new capabilities. The result: a 406 percent ROI, a payback of just 2.4 months and average annual savings of $930,025.

2. Save time

If automation of repetitive ENVA (essential non-value added) tasks can save 20 percent of your time each day, that adds up to a whole day in the week. If applied to a 30-person team, you can end up reducing the need for a fresh recruit. Preferred Health Professionals (PHP) automated and saved 50 hours per week after it began to be inundated with rising number of tasks. PHP began with automating just a single process. Just this one task helped IT save many hours each day. Meldium, an identity management platform for SaaS, automated a mechanism that would help bring and aggregate relevant news to them. And voila! They saved more than four hours each week. At RKA Petroleum, patching used to take up close to 120 hours a month using three resources. After automation, now just one resource spends only an hour each month on the same.

3. Take the robot out of the human

Reducing or eliminating the NVA (non-value added) activities and automating the ENVA activities releases employee bandwidth and allows them to focus on their area of expertise and contribute to high-value, transformational work, while often raising job satisfaction levels and boosting revenue. That’s also one great way you can extract larger value from human capital. It ends up being a win-win for all.

A travel concierge business automated its questionnaires, e-mail blasts, payment reminders, thank-you mails, and several other processes. As a result, the hours that are freed up help them to channel their energies in personalizing their clients’ vacations and speaking with them on the phone.

4. Scale up, increase output 

One of the things automation is best known for is its ability to ramp-up production, allowing businesses to fulfill more orders.

That’s precisely what a private publisher did. Having managed just 750 titles over nine years, the publisher decided to let automation drive the firm to the future. Within just a couple of years, the catalog grew to include more than 4,000 titles. SNS Bank NV, automated its file transfer process and improved auditability and the number of employees able to manage those transfers has increased substantially. More than 210 workflows are automated now, of which 80 percent make use of its new FTP engine.

5. Create a nimble environment

Automation allows businesses to reduce response time and improve agility.  BJ’s restaurant, which has a chain of 75 outlets, wanted to stay optimally staffed, considering the thin margins it yielded. So it looked to automation and is now able to implement a menu price change across 75 restaurants in flat 15 mins, as against three days to do just 28 restaurants earlier. Ricoh, a world-class provider of document and content management solutions was facing duplication of efforts across geographies, which was apparently not noticed at a local level. After automating the processes, the logic for running them on the workstations and servers could be updated remotely and rather quickly. The company also gain from improved auditability and accurate invoicing.

6. Effective people tracking

Keep a track of your customers and communities, and improve accountability amongst employees.

At MIT Sloan, our goal is to build a community of innovators for sustainability out of our students and alumni, faculty and researchers, and partners in business, government, and NGOs.  That extended community makes for a wide range of contacts and we have started using SalesForce to keep track of everybody.  Cirrus Insight lets me create contacts in our database, log emails, and see basic info about people when I hear from them, without ever leaving Gmail.  It’s a huge help.” — Jason Jay, Director of Sustainability Initiative, MIT Sloan

7. Improve forecasting accuracy

Spreadsheets may work well when you are a five-member team. Once you pick up scale, you would do better with improved forecasting capabilities.

Popcorn, Indiana saw logic in this, and empowered its teams with intelligent tools to arrive at long-term forecasts for securing raw materials, and scheduling transportation to carry larger loads during a promotion. At the end of 60 days, it could confidently reduce its trade promotion spends by more than 50 percent. Moreover, forecasting errors were reduced by 50 percent.

Let’s now see how specific departments within an organization can take advantage of automation.

IT Services

The Computer Weekly states that “IT departments spend 30 percent of their time carrying out basic tasks, and are growing frustrated with the lack of time available to focus on transformational work.” A recent study reveals that more than 33 percent of all enterprise software purchases go unused. This results in more than $30 billion being wasted each year in the U.S. alone, or about $259 per workstation. CIO Insight puts the following figures to the estimated software wastage in various industries:

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Choosing an automated method for removal of software sprawl not only provides the financial benefit from accurate identification and removal of unused software, but its automated technique enables enterprises to keep pace with the digital change. It enhances security, reduces the effort and time to patch, and frees up bandwidth of IT professionals to focus on innovation rather than being consumed in basic tasks. What’s more, all this reduces cost. The Technology Solutions Group at HP believes that with automation technology, you can have one technician efficiently managing 200 servers, instead of just 20.

With an effective Automated Endpoint solution, PCs can be built, rebuilt, patched, upgraded and managed easily without disruption in the fastest way possible, making them available when they are needed, and helping IT teams to be more responsive to the needs of the business and its users. IT teams can also benefit from fully automated service delivery through SCCM that eliminates manual effort and accelerates processes. Automation can also help in reducing downtime and reducing Mean Time To Restore (MTTR). Besides, automated programming techniques that help in scaffolding in MVC frameworks and in testing also help save time. McKinsey states that by taking full advantage of automating processes and using IT solutions, banks can often generate an improvement of more than 50 percent in productivity and customer service.

Human Resources

PwC finds that on an average, direct HR costs account for 28 percent of overall operating expenses. Ed Lawler and John Boudreau from the Center of Effective Organizations, in a research report, revealed that, on average, more than 50 percent of the time spent by a human resources department is spent in processing employee information and answering employee questions. Automation in the HR department can initiate an automated hiring process, and automate processes linked to taxes and payroll, employment benefits, insurance, and compliance.

The Arizona Department of Administration did just that. The human resources staff was earlier spending substantial time carrying out employment verifications. Through automation, the state successfully eliminated close to 6,700 hours of lost productivity and achieved cost savings of more $165,000 annually.

Finance teams

So large is the scope of automation in the finance function of businesses that researchers at Oxford University and consultants Deloitte, in a recent study predicted that on the basis of the nature of work and the evolution of machine intelligence, charted accountants stand a 95 percent chance of being replaced by some form of automation in the next two decades. Available solutions on automation claim to decrease manual effort by 90 percent, improve the time to financial reporting by 70 percent, and increase the number of books closed each month from 10 to hundreds, with just 20 percent of existing resources.

Marketing

Marketing automation is gradually coming of age. McKinsey observes that activities that take up 10 percent to 15 percent of a marketing executive’s time can be automated through solutions that already exist today. A recent article on HBR states that 85 percent of the activities performed by a salesperson have the potential to be automated with today’s technology. Another article on Emailmonday declares that 49 percent of businesses are already using some form of marketing automation, with close to 55 percent of all B2B companies embracing it. MarketingSherpa puts a figure of 54 percent to the number of CMOs that have either begun or completed marketing automation.

Manufacturing

The manufacturing sector is poised for a revolution of sorts with new automated systems setting the stage for the emergence of even smarter factories. Packaging can account for 10 percent to 35 percent of expenses pertaining to the operational throughput of a processing plant. A poultry business that introduced automation benefited from significant savings, higher packaging speed, and enhancements in product quality, while reducing rework from around 12 percent to just two percent.

With businesses adopting faster and efficient methods for saving time, money, and resources, while improving agility, and expanding and enhancing the quality of their products and services through technology advancements, automation seems to be one of the key drivers as well as the solution in this disruption.


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Lucjan Zaborowski is the head of digital for 1E. Lucjan is also an experienced marketer and project manager with a solid understanding of digital acquisition and optimization, product marketing and program management. He has over six years of experience in multi-channel digital acquisition. He is keen to learn and stay up to date with the latest marketing trends.

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