Automation is the latest buzzword to hit the business community - and although it seems initially complicated - once implemented, it runs quietly in the background, drastically increasing efficiency by saving you hours each week.
Businesses worldwide are realising that automation can save costs, eliminate boring tasks, and allow employees to focus on higher-value activities. But navigating the complexities of automation can be difficult for businesses big and small.
It's difficult to know sometimes what can be automated, how much it will cost and what the specific benefits to your business will be.
In this report, we'll cut through the jargon and dive into specific examples of how investing in automation can save your business time and money.
In a 2017 report from McKinsey & Company, they estimate that nearly half of all work activities can be automated with currently available technology.
To identify what tasks can be automated, break down the processes in your business into parts. These parts can then be broken into individual tasks. Each of these tasks is an opportunity for automation.
To decide which task to automate first, business owners must balance out the cost and difficulty of automating the task versus the potential increase in productivity.
According to the IBM Institute for Business Value, tasks can be ranked on 3 levels:
Using tools like Zapier, many tasks that are ranked as 'Basic' or 'Advanced' can be entirely or partially automated, saving significant time and money.
Examples of automatable 'Basic' and 'Advanced' processes include:
Throughout history, businesses that have failed to adopt new technologies have suffered as a result. Recent examples include Kodak, who missed the switch to digital media and Nokia, who missed the smartphone revolution.
Companies miss out on new technologies for a wide range of reasons, including fear, technological pessimism, and the cost of adoption.
Put simply, if you don't automate, your competitors will outpace you. At first, the improvements might be modest, but as the printing press example shows, these improvements compound dramatically over time.
To calculate how much you can save by automating, you should focus on 4 factors:
Automation reduces your payroll by either replacing, repurposing, or augmenting your staff.
With some types of automation, staff may no longer be needed, as the task is entirely completed by the automation. These staff can then be reassigned to higher-value work, driving growth in areas of your business that cannot be automated, such as sales, relationship management, or customer service.
To calculate how much labor cost could be saved:
For example, one of your team might be responsible for entering invoices into your accounting system at £8 per hour, which takes them 10 hours every month, costing £960 per year.
Next, total up the fixed costs of running your offices and divide this by the number of staff.
Divide this by the number of hours worked each month to calculate an hourly cost. For the 10 hours of monthly invoice entry, our example office costs £140 per year to run.z
Our total labor cost is, therefore, £1100 per year to enter invoices. If you can find automation for below this cost, it's already worth adopting, but there are other factors to consider.
Automations work tirelessly 24 hours a day, 7 days a week, with 100% accuracy.
Humans are not so perfect. We need regular breaks, sick days, holiday pay, and are occasionally unproductive at work. Research suggests that 13% of employee productivity is lost on browsing social media alone.
To calculate the true benefits of automation:
For example, one of your team might follow-up with your customers to encourage them to re-order each quarter. This takes 4 hours to complete, but 20% of this time is wasted due to breaks and other time loss factors.
Take a look at your existing processes and map your workflows, starting at the end and working backward.
At each stage of this workflow, reflect on your past performance, and identify where slowdowns have occurred previously or could occur if your business grew.
For example, one of our clients (Squiggle Consult) had a bottleneck at the start of their customer journey. For every new lead, 10-15 minutes of data entry was required. This meant only a fixed amount of leads could be onboarded each day, limiting the growth of their business.
By automating this data entry, there is no limit to how many leads can be onboarded, clearing the bottleneck.
By applying automation where these bottlenecks occur, you increase productivity and reduce the likelihood of bottlenecks in the future.
The Oxford American Dictionary defines opportunity cost as "the loss of potential gain from other alternatives when one alternative is chosen."
In the context of automation, this means what are you missing out on if you fail to automate: