There are many conflicting views on the impact that automating business processes will have on organizations.
To clarify, Business Process Automation is a process wherein data, information, and processes related to the business
are managed with technology as a means of driving down costs. Some claim that spending money on such automation yields
poor returns on investment, or will outright create losses on the bottom line. Others believe automation can only be a boon.
Regardless of your stance, it cannot be denied that business automation is a fact of modern businesses that continues
to grow at lightning speeds. Virtually all big businesses have heavily automated the majority of their business processes.
There are good reasons are underlying this collective decision to adopt automation; you’d be wise to know and understand them.
Fortunately, they are easy to grasp.
The most easily appreciable reason for businesses to adopt automation is cost. Here are some truly unbelievable losses in the United States due to poor organization, as uncovered by the Brother International Corporation in their 2010 survey of office workers:
- Each office worker loses up to 38 working hours per year simply looking for misplaced office items
- 66% of office workers have spent up to 30 minutes of time per typical work week looking for misplaced items
- 46% of office workers have lost one of the following items in the past year - file folders, mobile phones, calculators, briefcases, suitcase, electronic storage devices, PDAs, or laptop computers!
- The estimated value of productivity lost due to time spent looking for misplaced items in the office is equivalent to $99 BILLION CDN per year.
Americans aren’t alone in experiencing such issues. Even in smaller economies, lack of automation causes massive losses. For example, UK businesses collectively lose an annual amount equivalent to $434 million CDN simply through searching for lost or hard-to-find paper files. Extrapolating outward, the global loss in productivity would be truly astronomical. All of this waste – just because hard copies are hard to manage.
It’s little wonder that progressively more people are extremely receptive to paperless offices and automated processes. And while it’s tempting to dismiss automation as a fad among the young and frivolous, it would also be a serious mistake. Automation isn’t just the wave of the future; it’s already here.
Younger, more educated executives and managers who already had deep daily lifestyle ties to technology represent only one driving force toward greater office automation and IT use in companies. It has been noted that large companies that made the move to wide scale automation some time ago, has long since recognized the potential benefits of office automation. They’re starting to preferentially partner with companies that have automated processes. There are very concrete reasons why.
Here are four very notable examples (among many) of how automating various business processes saved money and increased productivity (statistics compiled by Professor Mohsen Attaran):
R.J. Reynolds – Automation of their Accounts Payable function resulted in:
- 53% reduction in invoice processing costs
- 25% decrease in clerical staffing requirements
- 16% increase in transactions volume
Frito Lay – Automation of their purchasing processes resulted in:
- Savings of between 30,000 to 50,000 work hours per year
- 10% reduction in distribution centres
Cisco Systems – Adoption of web-based customer relationship management resulted in:
- Elimination of 75,000 customer phone calls per month
- Savings of over $270 million in annual operating expenses
Emerson – Adoption of web-based procurement processes resulted in:
- Consolidation of buying activity across 60 divisions
- Savings of an estimated $500 million over four years