The Trend Toward Automation and What It Means for Business

Topics: Trends


If you were wondering when automation would begin to impact your business, the answer is “now.” While the trend toward automation and greater efficiency in the manufacturing sector is old news, advances in machine learning and artificial intelligence make it possible to automate the activities of highly-trained, white collar workers. Today.

A January 2017 McKinsey and Company report on the future of automation and its impact on employment and productivity, estimates sixty percent of all occupations could have at least one-third of their activities automated by currently demonstrated technologies. And, according to McKinsey’s research, China, India, Japan and the U.S. account for two-thirds of employees whose activities are automatable by today’s technologies.

Automation can produce performance benefits in business processes–reducing error, improving quality and producing speed that leads to gains in efficiency and productivity–generating real value, especially for early adopters who leverage new and existing technologies to give their companies a competitive edge. Examples of performance-enhancing automation that have become familiar include e-discovery and image recognition capabilities built into some business software products.

McKinsey points to five factors influencing the adoption of automation. Three of these apply most directly to the business decisions of software-as-a-service (SaaS) clients and can help companies looking at available automation technologies. Answering critical questions should be considered to determine if automation makes sense.

  • Technical feasibility: Is the technology adapted into solutions that automate the specific activities you require
  • Cost: What is the cost of software and/or hardware, and can the business afford it?
  • Economic benefit: What is the economic benefit of labor savings and greater efficiency, and do the benefits outweigh the costs?

For automation to be broadly adopted in the national and global economy, every organization will have to answer these questions affirmatively, again and again.

More than anxiety about the potential for economic displacement related to automation, the trend is focused on anticipated benefits: labor savings, increased profitability and productivity, and improved quality across the global economy. Most importantly, automation creates efficiency and, in doing so, opportunity. Highly-skilled employees will have more time for activities that are non-routine and which require higher levels of thinking–like innovation that produces further technological advances, new industries and new roles for workers.

Over the long-term, the automation of job activities, including those of high-skill professions, is predicted to bring an irreversible shift in the U.S. labor force similar to the historic moves away from agricultural and low-skilled manufacturing employment. It has the potential to change business and the workplace for everyone. As is often the case, the greatest benefit will be to those who are ahead of the curve and ready to take advantage of the change. 

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