Automation: Threat Or Benefit?

Automation offers us a glimpse into the future of business. Companies of all shapes and sizes are constantly looking for ways to automate their value chains. At first glance, automation may seem like a clear net positive. Technology reduces dependence on human capital, which translates into cost savings. But digging a little deeper into automation, the cost-benefit analysis gets more complicated. Bottom-line profitability serves as just one measure of success. More than ever – and especially with the shift to virtual work – businesses are thinking about other measures of success. Culture, employee happiness, and sustainability – to name a few. Is automation a force for good, or will it take a turn for the worse over time?

Automation Definition

What is automation? Many people use the term interchangeably with “technology.” Automation experts, however, will tell you that it encompasses technology as part of its definition. More specifically, technology by itself does not equal automation. Only when technology helps something operate autonomously does it really become automation. Another way to think about the automation definition is in terms of effect on human input. In one of the most obvious benefits of automation, automation tends to minimize human input – an inverse relationship of sorts. Automation goes up, human involvement goes down.

An easy example to think about is the assembly line of any consumer goods. Assembly line tasks typically range from packaging, to stamping, to quality checking. More robots doing these tasks means fewer humans. The tension here is clear when it comes to job security and general employee well-being. But before diving too deep into that tension, it’s worth highlighting that robots represent advanced automation. There are other types as well – both elementary and highly nuanced.

Examples of Automation

Process Automation

Process automation benefits any transactional exchange that calls for consistency. Common examples in the business world include things like customer service, payroll, or hiring. Consistent quality in such functions takes on even more importance in the age of information sharing. A customer can easily take to the internet to discover if he or she received a different level of service.

Workflow Automation

Workflow automation refers less to a customer-facing transaction and more to the internal systems for how a transaction gets carried out. Think about a bank processing mortgages. Before the customer receives the mortgage, many disparate tasks must be carried out within the bank. Automating mortgage workflows might entail online portals and task management systems in place of physical documents changing hands. Workflow automation saves money, time, and preventable mistakes.

Automated Guided Vehicles

Automated guided vehicles (AGVs) relate to the aforementioned example of factory robots. Best applied to “packaging-intensive” industries like e-commerce and pharmaceuticals, automated guided vehicles literally maneuver around the factory floor in place of manual laborers. The technological complexity of AGVs certainly ranks higher than that of systems required for business process automation or workflow automation.

Artificial Intelligence Automation

Artificial intelligence (AI) is the “Rolls-Royce” of automation, as it takes human minimization to the next level. AI refers to any kind of technology that is self-learning. Like how we learn from our mistakes, products or services with AI automation improve as time goes on. But even self-improving technology needs some human involvement. McKinsey’s Global Institute reckons that AI will render some jobs obsolete but will also create new jobs in cases where technology needs human oversight.

Benefits of Automation

To automate or not to automate? That is still the question. We’ve already touched on many of the benefits. Number one, automation of any kind raises output and productivity. Secondly, it ensures quality control and reduces variability. Thirdly, and not often talked about, is the benefit of worker safety. Automated processes move workers further away from the frontlines, which can be dangerous in industries like chemicals or manufacturing. As automation continues to evolve, there are bound to be even more benefits in years to come.

Jobs Lost to Automation

Despite optimism from many, we will undoubtedly lose some jobs to automation. The real impact is hard to measure at this point in time. Different rules of the game mean a different economy, which can be a scary prospect for many workers. The most vulnerable jobs are the ones embedded around the types of automation discussed above. But jobs lost to automation do not need to be lost forever. By re-skilling and proactively self-auditing, workers can prove themselves a valuable piece of the puzzle coupled with automation.

At first, some wondered if automation or AI would replace consulting jobs, at least at the entry level. From where we stand, we don’t believe automation threatens consulting jobs. It’s hard to automated logic, and the ability to attribute value to differing data. Because of that, we believe management consultants will be in demand for the foreseeable future.

Conclusion

To put it simply, automation is both a threat and a benefit to the business economy. Thanks to industrial automation, companies are cranking out products at unprecedented rates. And employers are happy to pass along savings to consumers by way of low prices and fast delivery times. But we are in the early stages of a marathon, not a sprint. Time will tell whether the human costs of automation will start to weigh more heavily against the benefits. For now, the best strategy is a measured approach. Automation should be used tactfully to optimize business models, without totally sacrificing the value of committed human employees.

For more strategy minded business thinking, check out our podcast, “Strategy Simplified“!

 

Additional Reading:

• Design Thinking: Process, Examples, & Models
• Business Process Reengineering: Definition, Steps, & Examples
• Consulting Resume: Complete Guide
• Top Corporate Training Topics