When Does Automation Go Too Far?
Labor shortages and the ability to increase accuracy and efficiency make business process automation enticing for manufacturers and distributors. But when does automation go too far? This is the question that has divided industry experts and thought leaders.
At Epicor Insights 2019, Epicor CEO Steve Murphy added his take on the issue. He warned that over-automation could create a “degree of rigidity and complexity in the system that doesn’t work in your favor.” Murphy also suggested that business leaders who automate too many processes underestimate their workforce.
Workflow automation can powerfully enhance your organization, but only when executed appropriately. How can businesses streamline their operations without overcomplicating their infrastructure? We explain how enterprises can leverage ERP to reap the rewards of process automation without taking on the risks.
Process Automation Risks
According to McKinsey & Company, about half of all business processes can be automated, but just because you can doesn’t mean you should. Automation isn’t appropriate for tasks that require a high level of cognitive ability. Your personnel are more effective than a computer at weighing a variety of factors—such as social norms, business environment and customer sentiment—to guide them in making decisions.
If you’re not careful, business process automation can also add a great deal of complexity to your enterprise. Some workflow automation can be implemented easily using ERP functionality. ERP vendors are increasingly investing in AI and IoT technology to facilitate deeper insights and streamlined processes. However, extensive automation could result in convoluted IT projects and expensive investments in robotics, customizations and add-ons. It could also sacrifice your company’s flexibility by making processes too rigid.
Businesses should also consider how automation could impact the workforce. Though automation is expected to create some new job roles, it will also eliminate others. Forrester Research predicts that seven percent of jobs will be obsolete because of AI. If you automate processes to the extent that you no longer require multiple positions, you could save on huge labor costs. But this decision could ultimately cost you your reputation. Consumers as well as current and potential employees might fear that your company undervalues human labor, resulting in issues with sales and employee retention.
Process Automation Rewards
Business process automation can go completely wrong, but for the vast majority of companies, it results in tremendous improvements. Without automation, processes can take days or even weeks to fully execute. Automating workflows with your ERP solution can help you complete the same tasks by the end of the day. With faster operations come happier customers. When customers receive orders and services in a timely fashion, your organization generates higher revenue and customer loyalty, giving you a sizable advantage over your competition.
Additionally, automation increases the value of your data. Instead of requiring employees to manually key in data across multiple systems, your ERP software will instantly update data in real time. This gives users deep visibility into enterprise performance, so they can make effective business decisions. Automated data processing also reduces errors, resulting in higher accuracy and better forecasting.
Though we warned of the risks process automation could pose to your employees, more likely, automation will drastically boost your workers’ morale. Personnel can spend less time on manually entering data and other mundane tasks and more time on interesting, value-driven operations. Automation can also make the workplace safer. Automating potentially dangerous tasks on the shop floor will increase the safety of your employees and reduce legal liabilities.
3 Key Questions
Now that you understand the risks and rewards of process automation, it’s time to figure out which workflows you can streamline in your organization. Use these three questions as a starting point for your process automation strategy:
1. What are your most repetitive processes?
As we’ve touched on, operations that consist of multiple variables and considerations require a human touch, not automation. The only workflows that can be successfully automated are rote, repetitive tasks. Using business process modeling, map out your current processes, taking careful note of those repetitive tasks that could benefit from automation.
2. Where are you wasting time or making errors?
Once you’ve documented repetitive tasks, figure out which ones are flawed. Audit these business processes to quantify how they are depleting resources, resulting in mistakes or hurting your company in any other way. Identify the root of any issues you discover.
You might actually find that automating the workflow alone won’t solve the problem. Perhaps you need to retrain your employees or reroute your workflow. However, there’s a strong chance that automation will play a big role in fixing current inefficiencies and providing major improvements.
3. How will business process automation benefit your workforce?
Sure, the point of process automation is to strengthen your bottom line and gain a competitive advantage. But at the end of the day, your employees will have to be able to work effectively with software and machines to steer your business in the right direction. See where your workers are currently struggling and determine how automation can help them out. Create use cases that demonstrate how users, applications and equipment will come together to solve problems.
Business process automation is reshaping manufacturing and distribution as we know it, but there’s a big cost to pay if you go overboard. At Datix, our certified consultants can help you automate workflows appropriately. An Epicor Gold Partner, we have extensive experience with ERP projects for manufacturers and distributors. Our business process modeling experts will help you refine your operations and seamlessly implement your Epicor solution in line with your needs.
Start achieving greater efficiency and accuracy with ERP. To learn more, get in touch with one of our ERP experts today!