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Automation - Top 3 Myths

Yes, it is here, and whether we believe it or not, it is constantly happening all around us. Automation, one of the hottest buzzwords in the tech industry that seems hyped, sometimes misunderstood, dreaded by some, yet cherished by many.

It is not a new concept, automation has been part of business operations for ages in different flavors and density, however, with heavy investments and breakthroughs in enabling technologies like Artificial Intelligence, Machine Learning, Robotic Process Automation and Natural Language Processing, innovations in these areas have created an ecosystem of cutting edge tools with seemingly greater applicability in operations that was not so widely accessible until a few years ago.

As most of the B2C life around us is rapidly getting powered up with these technologies through myriad of devices, services and content that is mostly agnostic to us, they are also getting more popular in B2B world with executives investing in automation initiatives for greater efficiency, quality and customer experience in their business.

However, applying operations automation in an organization is not as simple as buying relevant automation products and hiring supplier services to launch projects on steroids for quick cost reduction or other business benefits. There is a great deal of planning and assessment that is required in such efforts before automation is even considered as a candidate for implementation.

Significant number of automation initiatives do not yield desired value due to unrealistic expectations, inadequate planning and diluted executive support.

Here are the three most misunderstood expectations from automation initiatives that are noticeably common in organizations relatively new in exploring this concept.

1. Break The Ice

Honey, we need to talk !

It's all about planning, setting realistic goals with progressive development and effectively communicating with the stakeholders.

Automation is not the solution for all problems. We should not try to automate inefficiencies. Several dimensions must be evaluated at various degrees for effective planning in these strategic initiatives. Most importantly, we must first identify and define the expected goals and focus areas. Are we looking at cost optimization, time to market, greater accuracy and quality, improved customer experience or all of these benefits ? Is the focus area Financial Services, Customer Care, Marketing, Production, IT or a combination of these areas ? It could be as crisp as aiming to reduce additional X% of spend in Y focus area by Z timeline and evolve from there. This is a universal sense that is applicable to a matured organization with a high degree of existing optimized and lean working model, outsourcing, automation, partner ecosystem, or, to a fairly smaller organization yet to go through a maturity curve in these areas.

Many organizations think that by just applying better tools or outsourcing with a partner, it will overcome their inefficiencies and cultural issues. That's a myth and surely is a deal breaker for automation. A good plan includes effective change management and process optimization activities before any automation initiative to ensure a solid foundation and higher probability of success.

Another critical consideration is the stakeholder management along with executive sponsorship of strategic automation initiatives. Some organizations wonder whether the ownership of automation should be with business or IT, should it be a stealth project to address the sensitivities related to possible workforce reduction or an openly communicated initiative.

It is generally considered unnecessary to involve the C-Suite or senior executives for automation efforts. On the contrary, it is critical to identify stakeholders, agree on accountability whether it is run by business or IT, create a sound communication plan and ensure executive sponsorship of automation initiatives as part of the planning process.

Without making it seem bureaucratic, it may be a good idea to incorporate an Automation Program Office depending upon nature and scale of the implementation.

Goals and success criteria should be well defined. Operational environment must be optimized and cleaned up, processes should be well mapped and optimized, and key employees must be trained in change management in order to incorporate a robust foundation. Planning, communication, accountability and executive sponsorship are essential to ensure successful implementation of automation initiatives, like other strategic implementations in an organization.

2. Finders Keepers

We must deliver as we have budgeted the savings !

It is a common practice for P/L leaders to get hyper optimistic and budget significant cost savings assured through the automation projects especially observed through workforce reduction. However, this could sometimes get misleading since organizations may not have factored in partial workforce retention, training and redeployment cost along with possible addition of workforce to manage the new environment led by automation.

In most cases, not all labor cost associated with a specific process may be completely eliminated through automation. Some labor might still be required to either compliment automation or oversee to ensure quality and escalation management in certain cases. It could get even more extensive if the workforce is spread between different outsourcing partners in different global locations. Hence, a diligent talent management discipline is absolutely vital to gauge the net impact on cost savings that also funnels into operations planning.

In addition, the cost of bot licenses, infrastructure, hosting and other related aspects to build and run an automation led operations environment must be factored in along with other cost components to effectively track ROI on such efforts. Levels of frustration and disappointment run high in the management when the cost balloons downstream in the implementation, contingency budget allocations yield little benefit, and net ROI is not what was proactively expected, budgeted and committed to the executive sponsor(s).

All the benefits of cost savings in automation through workforce reduction and infrastructure footprint reduction may not always impact the P/L. It is the cumulative benefit of cost, quality, accuracy, speed and customer experience with lower overheads of talent management that may be evaluated as success criteria through qualitative and quantitative metrics. As an organization evolves in automation maturity, its goal setting, operations and fiscal discipline along with cultural adaptation improves over time.

3. Checkered Flag

Are we there yet ?

No, it is not a race to finish line, it is not the final destination. It is an ongoing journey that gets better and exciting over time.

With a lucrative model of deriving business benefits within the first quarter or two, many companies rush to launch several automation projects on steroids and scramble to the finish line curious to see immediate cost savings or other business benefits. Based on the short term outcomes, companies iterate to start over to apply corrective measures, shut down these initiatives to revisit in future, continue with delayed projects, and some drop these initiatives once they realize their expected business goals.

Over 50% of automation projects do not meet their stated goals due to different issues stated in this blog as well as other possible causes. And the ones that succeed, over 80% of them do not have a long term roadmap for evolution over time.

Automation is increasingly becoming a way of life for doing business, for operations and talent management, and also for marketing and P/L management. It is crucial to have a longer term view with a strategic vision for automation benefits. With iterative and realistic goals, set of incrementally progressive actions, and proactive adoption by executives and operations staff, the strategic vision can be seamlessly realized.

Wrap Up

In order to observe a successful presence of automation initiatives and derive associated business benefits, leadership team must plan and communicate well, have realistic expectations, ensure executive sponsorship, encourage cultural change, ensure execution discipline, strictly track P/L impact and evolve through ongoing journey with incremental outcomes and lessons learnt over time.

If the hype filters cut through the noise and realistic benefits of automation are derived as expected, there is much to explore and evolve in this space that will get more exciting over time with technological innovation.

However, it is critical to note that certain myths or unrealistic expectations regarding automation initiatives may lead to disappointing business outcomes. More diligence in applying a careful thought and supporting actions will ensure a more productive journey in the way of life of automation.

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