The automation imperative (2022)

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Organizations in every region and industry are automating at least some business processes, yet only a slight majority have succeeded at meeting their targets, according to a new McKinsey Global Survey on the topic. 1 As advances in artificial intelligence, software robotics, machine learning, and innovative technology platforms enable businesses to redefine processes, workplace automation is expected to provide a significant opportunity for improvements in performance and efficiency. 2 Indeed, three-quarters of all respondents say their companies have already begun to automate business processes or plan to do so within the next year. The results also suggest which practices best support a successful automation effort: making automation a strategic priority, deploying technologies systematically, decentralizing governance, ensuring the IT function’s involvement, internalizing automation’s costs and benefits, and prioritizing workforce management.

Automation, a global phenomenon

Across regions and industries, the survey results suggest that automating businesses is a global phenomenon (Exhibit 1). A majority of all respondents (57 percent) say their organizations are at least piloting the automation of processes in one or more business units or functions. Another 38 percent say their organizations have not begun to automate business processes, but nearly half of them say their organizations plan to do so within the next year. 3 Across regions, respondents in developing markets are just as likely as their peers to report automation activity.

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The automation imperative (1)

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Not surprisingly, the high-tech and telecom industries are leading the way on automation. Three-quarters of respondents in those sectors say they are at least piloting automation in one or more business units or functions. Nonetheless, the results suggest that all industries have been or expect to be deploying automation technologies. At least half of respondents in all other industries say their companies have already begun to pilot or adopt automation.

The results also suggest that larger organizations are leading smaller ones in pursuing automation. 4 Among respondents at large companies, 40 percent say theirs are using automation across the organization or have fully automated processes in at least one function or business unit. At smaller organizations, just 25 percent say the same.

The factors of automation success

Although automation has become commonplace, the results indicate that success is by no means assured. We looked closely at the responses from larger organizations, where automation is more prevalent. Across industries, more than half of large-company respondents say their organizations have seen success to date (that is, their automation efforts have been successful or very successful at meeting targets). The results also point to six practices that the most successful companies tend to employ.

Make automation a strategic priority

According to respondents, organizations with successful automation efforts are more likely than others to designate automation as a strategic priority. When asked about their companies’ primary reasons for adopting automation technologies, these respondents are more likely than others to say automation was defined as a priority during the strategic-planning processes or is required to keep pace with competitors (Exhibit 2).

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The automation imperative (2)

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Deploy automation technologies systematically

While automation success is possible through either traditional top-down (waterfall) deployment or more flexible agile methods, a systematic approach is key. Only 5 percent of respondents at successful companies say their deployment methods have been ad hoc, compared with 19 percent of peers not reporting success (Exhibit 3).

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What’s more, successful organizations are implementing different automation technologies from the ones other organizations are adopting. Respondents with successful automation efforts are more than twice as likely as others to say their organizations are deploying machine learning (Exhibit 4). They are also more likely to cite the use of other cognitive-based automation capabilities, such as cognitive agents and natural-language processing. At respondents’ organizations overall, the most commonly adopted automation technology is robotic process automation, which respondents say is deployed in equal shares of successful and other organizations.

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The automation imperative (4)

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Decentralize governance

Another differentiator of automation success, the results suggest, is the way programs are organized. The results favor decentralization. Respondents at successful organizations are more likely than their peers to say their functions or business units are accountable for delivering automation efforts, with or without support from a central team. Conversely, respondents at less successful organizations are more than twice as likely as those at successful ones to say a central team is solely responsible for automation delivery across the organization.

Ensure the IT function’s involvement

The success of automation programs also relies on the early engagement of the IT function, according to respondents from organizations with successful efforts. First, these organizations’ IT teams are more likely to have automated their own processes. 5 Furthermore, IT’s involvement in the automation effort also is a differentiator of success. More than 75 percent of respondents from successful organizations say IT was involved in initial discussions of automation projects, compared with 58 percent of all other respondents (Exhibit 5). By contrast, just 13 percent of respondents who consider their automation efforts successful say IT was not brought onboard until pilots were already under way.

The automation imperative (5)

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Internalize both costs and benefits

Successful and less successful automation efforts also diverge in regard to management’s understanding of the total cost of ownership (TCO). 6 Half of respondents with successful automation efforts say their leaders understand very well the TCO for automation projects. Only 7 percent of peers at other organizations say the same. That said, respondents report similar benefits from their automation efforts, regardless of their success to date at meeting targets. The most common benefit reported is reduced costs, identified by about one-third of all respondents.

Prioritize workforce management

The automation imperative (6)

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Among all large organizations reported to be pursuing automation, a majority of respondents predict that their companies will face automation-related skill gaps in the future. Only 8 percent believe there will be no gaps to address. And while most respondents say addressing potential automation-related skill gaps is a top ten priority for their organizations, respondents at successful organizations are more than three times likelier than others to consider the effort a top five priority (Exhibit 6).

What’s more, organizations with successful automation efforts are more likely than others to report concerns about talent acquisition. They are five times likelier (40 percent, compared with 8 percent) to say acquiring employees with the right skills will be their organizations’ most significant automation-related challenge in the next three years.

What success looks like at small companies

Smaller companies are less likely than larger companies to automate processes, but their success rate is higher. The findings from these organizations show that several differentiators for success hold true regardless of company size.

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As with large companies, IT’s involvement in small companies’ automation efforts is greater at successful companies. More than 80 percent of respondents at successful small companies say their IT functions were involved in the initial discussion phase of planning for automation projects, compared with two-thirds of respondents at other small companies. And 64 percent of respondents from successful small companies report the automation of at least one business process in IT, compared with 41 percent of their small-company peers.

Understanding costs also is a marker of success at smaller firms. At successful small companies, nearly half of respondents say their leaders understand the total cost of ownership of automation efforts very well or completely, while only 28 percent of respondents from other companies say the same. The findings also suggest that automation-related talent management is top of mind for leaders at successful small companies. And like their large-company peers, respondents from the most successful small companies are likelier than others to say that addressing potential automation-related skill gaps is at least a top ten priority for their organizations.

Looking ahead

The findings from this survey can be applied to organizations at all stages of the automation journey. Depending on an organization’s current state, its leaders can take several steps to reap the rewards of automation.

  • Prioritize automation. Organizations that are just launching automation programs would benefit from making automation a strategic priority from the outset. Ways to put this in action include defining clear strategic objectives for automation, having an executive sponsor for the program, beginning automation work with a comprehensive understanding of both the costs and benefits, and making automation an enterprise-wide, rather than functional, mandate.
  • Focus on roles and people. Organizations that are struggling to implement automation successfully would do well to elevate the role of IT—for example, involving the function often and as early as possible in all future efforts. These organizations also should take a discerning look at workforce management. This includes development of an approach to capture value from automation and an assessment of the skills and new roles for the workforce that accompany future-state automated processes.
  • Expand ownership and adoption. Finally, organizations that are successfully deploying automation technologies should also look to expand the governance of and buy-in on automation. They can benefit from encouraging a truly enterprise-wide program and pursuing more advanced cognitive automation technologies. Structuring automation programs to be technology neutral will allow organizations to keep pace with the rapid advances being made, rather than rethinking their approach every time they adopt a new technology.

FAQs

What is the main concept of automation? ›

The dictionary defines automation as “the technique of making an apparatus, a process, or a system operate automatically.” We define automation as "the creation and application of technology to monitor and control the production and delivery of products and services.”

What are the main objectives of an automation system? ›

The main objective of process automation is to improve a company's workflows. With automation, we can reduce costs, time, and waste as well as increase productivity, reduce mistakes, and control all the processes of the business in real time.

What is automation in digital transformation? ›

Automation involves applying technology to make processes run themselves, making those processes more efficient and increasing transparency and reporting capabilities. In short, automation is a means to an end, and the desired end is digital transformation.

What automation can Python do? ›

Python is a versatile language that can be used for various automation tasks. You can use Python for automating file or folder management, generating reports from data stored in a database, monitoring logs on your servers, creating website scrapers, among other things.

What are the 4 types of automation? ›

Different Types of Industrial Automation Systems
  • Fixed Automation. Also referred to as hard automation, fixed automation systems carry out a single set of tasks without deviation. ...
  • Programmable Automation. ...
  • Flexible Automation. ...
  • Integrated Automation.
23 Sept 2020

What are 5 examples of automation? ›

35 Examples of Automated Technology
  • Hands-Free Search Engine Autos (UPDATE) The Google Driverless Car is Finally Coming into Fruition.
  • Automated School Buses. ...
  • Appliance-Controlling Adapters. ...
  • Garage Opener Apps. ...
  • Automated Personal Beacons. ...
  • Robotic Gas Pumps. ...
  • Automated Texting Apps. ...
  • Electronically Automated Doggy Doors.

What is the impact of automation? ›

Advantages commonly attributed to automation include higher production rates and increased productivity, more efficient use of materials, better product quality, improved safety, shorter workweeks for labour, and reduced factory lead times.

What is the best way to describe automation? ›

Automation is the process of making a machine, device, or system operate automatically. In most cases, it refers to replacing human labor with machines or computers controlled by software. Automation has been widely adopted in many industries and has led to increased efficiency and productivity.

What are types of automation? ›

Three types of automation in production can be distinguished: (1) fixed automation, (2) programmable automation, and (3) flexible automation.

Is automation a digitalization? ›

Automation, as the term suggests, is the automatic execution of tasks without periodic interference. Whereas, Digitalization is the conversion of analog information into texts, photographs, and voices, among others.

Is automation digital technology? ›

Digital Automation is and alternative to traditional automation approaches like Application Programme Interfaces' (APIs). The technology accesses systems using the user interface of applications enabling rapid 'virtual' integration to autonomously execute business processes with human exception management.

What is automation script? ›

Automation scripts are small, targeted pieces of code that can extend the product. An automation script consists of a launch point, variables with corresponding binding values, and the source code. You use wizards to create the components of an automation script.

Is Python good for automation? ›

A rich library of useful packages and ready-to-use ingredients for automation greatly facilitates testing in Python. Python is object-oriented and functional. It allows choosing what suits your tasks better – functions or classes. Distributed functions don't have side effects, and simple syntax makes them readable.

What are the benefits of automation? ›

Benefits of Automation
  • Lower operating costs. ...
  • Improved worker safety. ...
  • Reduced factory lead times. ...
  • Faster ROI. ...
  • Ability to be more competitive. ...
  • Increased production output. ...
  • Consistent and improved part production and quality. ...
  • Smaller environmental footprint.

What are the three levels in automation? ›

Thus we have three levels of automation and control included here (the positioning system level, the machine toollevel, and the manufacturing system level).

What are the basic elements of automation? ›

The main subsystems and components of a machine automation system are:
  • power distribution.
  • motor control and drives.
  • safety system.
  • programmable controllers.
  • discrete and analog I/O.
  • communication systems.
  • human-machine interface (HMI)

How important is automation in our life? ›

Advantages commonly attributed to automation include higher production rates and increased productivity, more efficient use of materials, better product quality, improved safety, shorter workweeks for labour, and reduced factory lead times.

What is automation in daily life? ›

Reducing your number of daily decisions is a form of automation. Automation means streamlining processes, limiting distractions, and saving time and effort. It means clearing your mind of clutter and spending your day on what matters.

What is the automation in real life? ›

Among the obvious examples of automation, we might name the washing machine, dishwasher, bus doors, refrigerators, home theater systems, and many more. Therefore, we might conclude that if something might be done without human interaction, it might be considered automation.

Why automation is the future? ›

In the future of automation, more companies will have a Head of Business Systems role to oversee their huge number of tools — and this position will hold a vast capacity for impact and change. More than ever, the SaaS tools we choose will help our businesses become more productive, profitable, and impactful.

How automation is changing the world? ›

As automation advances, technological innovations could displace some segment of the workforce, so it's possible there may be temporarily higher unemployment. Currently, technology is displacing workers whose jobs consist of routine, repeatable tasks, like bookkeeping, manufacturing, and food services.

How will automation affect the future? ›

The “new automation” of the next few decades—with much more advanced robotics and artificial intelligence (AI)—will widen the range of tasks and jobs that machines can perform, and have the potential to cause much more worker displacement and inequality than older generations of automation.

What is the simplest form of automation? ›

While the simplest forms of automation, i.e. rules-based RPA, require clear instructions, data quantities and quality are less important. But as organizations seek to introduce more sophisticated, cognitive technologies, the quantity and quality of data they use becomes a vital priority. Bad data leads to bad outcomes.

What is a benefit of developing an automation strategy? ›

An automation strategy can save your company time and money. By automating processes, you can eliminate the need for manual labor, which can free up resources to be used elsewhere. In addition, automating processes can help to improve efficiency and accuracy, while also reducing the potential for human error.

Which describes the paradox of automation? ›

The Paradox of Automation says that the more efficient the automated system, the more crucial the human contribution of the operators. Humans are less involved, but their involvement becomes more critical. If an automated system has an error, it will multiply that error until it's fixed or shut down.

What is an example of automation? ›

Examples of automation include

Cars which use technology, cameras and artificial intelligence to drive. Though self-driving cars are not without risk of crashing, they can be set up with a higher standard of safety than your average human driver, who will get tired and make mistakes.

What is automation system? ›

An automation system is an integration of sensors, controls, and actuators designed to perform a function with minimal or no human intervention. The field concerned in this subject is called Mechatronics which is an interdisciplinary branch of engineering that combines mechanical, electrical, and electronic systems.

What is the difference between automation and digital transformation? ›

Digital transformation improves processes, while automation adds speed and reduces costs,” Godwin says. “Ultimately, digital transformation delivers more business value when it is combined with process efficiency, enabled by automation.”

What is the difference between digitalization and digitization? ›

If digitization is a conversion of data and processes, digitalization is a transformation. More than just making existing data digital, digitalization embraces the ability of digital technology to collect data, establish trends and make better business decisions.

What is the difference between IoT and digitization? ›

The terms “IoT” and “digital transformation” often are used interchangeably both in media and in casual discussions. They shouldn't be. Digital transformation is a business strategy aimed at digitizing manual or analog business tools and practices. IoT is a powerful means to that end.

How is AI used in automation? ›

The most critical component of intelligent automation is artificial intelligence, or AI. By using machine learning and complex algorithms to analyze structured and unstructured data, businesses can develop a knowledge base and formulate predictions based on that data. This is the decision engine of IA.

What are the applications of automation? ›

Automation includes the use of various equipment and control systems such as machinery, processes in factories, boilers, and heat-treating ovens, switching on telephone networks, steering, and stabilization of ships, aircraft, and other applications and vehicles with reduced human intervention.

What is automation in robotics? ›

Robotic process automation (RPA) is a technology that allows software robots to use an application's user interface (UI) to mimic human actions without system modification or human intervention.

What is the first step of automation? ›

The first step of the automation journey is to identify the processes that you want to automate. For instance, you might look at the processes behind areas with low productivity. Or, you could target the most repetitive and time-consuming processes plaguing your back office.

Why is process automation important? ›

Business process automation eliminates the bottlenecks that lead to lost time and revenue. The improvements in efficiency and control spread to every facet of the organization — from increased productivity and compliance to better customer experience and performance.

How do you present an automation idea? ›

5 Practical Steps for A Successful Workflow Automation
  1. Identify Repetitive Tasks: ...
  2. Define Business Goals: ...
  3. Select the Right Workflow Automation Solution: ...
  4. Train the Users: ...
  5. Measure Key Performance Indicators and Improve Your Workflow:
27 May 2022

Which is personal automation? ›

Personal automation provides a way to run actions based on events such as time of day, arrival at a location, or the opening of an app.

What is intelligent automation example? ›

Intelligent automation refers to the combination of robotic process automation (RPA) and artificial intelligence (AI) technologies, for example, machine learning, and natural language processing (NLP).

How do businesses use automation? ›

How to Automate Your Small Business in 5 Simple Steps
  1. #1: Choose which tasks you're going to automate.
  2. #2: Choose your automation tools.
  3. #3: Set your automation targets.
  4. #4: Track results and refine your processes.
  5. #5: Create an automative culture in your workplace.
13 Apr 2022

How do I learn automation scripting? ›

Scripting & Automation for Beginners - YouTube

Is automation testing easy? ›

Test automation is a software development activity, and it's difficult to learn to program. Even with codeless tools, testers quickly find the limits of the tool and must learn more difficult concepts.

Why do we test automation? ›

Automated Testing Saves Time and Money

Manually repeating these tests is costly and time consuming. Once created, automated tests can be run over and over again at no additional cost and they are much faster than manual tests. Automated software testing can reduce the time to run repetitive tests from days to hours.

Which is better Selenium or Python? ›

Python runs very faster and makes use of indentation to initiate and end blocks. It is very simple as well as compact as compared to other programming languages. Python language is developed with a big community around it for which it offers a very good support system.

Is Python automation difficult? ›

Easy to learn and use

Python is easy to learn, which makes it the number one reason to use it for automation. Whether you're a beginner or have done programming in other languages, you can grasp Python super fast since it has a really simple syntax.

Is Java or Python better for automation? ›

We think that Python is the best language for Test Automation according to the criteria above. Java is also a good choice, and the arguments in favor of Java should also be considered, here you can not settle the dispute between fans of Python and Java.

What is the best way to describe automation? ›

Automation is the process of making a machine, device, or system operate automatically. In most cases, it refers to replacing human labor with machines or computers controlled by software. Automation has been widely adopted in many industries and has led to increased efficiency and productivity.

What is automation and why is it used? ›

Automation is the use of electronics and computer-controlled devices to assume control of processes. The aim of automation is to boost efficiency and reliability (not to be confuses with automated market maker). In most cases, however, automation replaces labor.

What is an example of automation? ›

Examples of automation include

Cars which use technology, cameras and artificial intelligence to drive. Though self-driving cars are not without risk of crashing, they can be set up with a higher standard of safety than your average human driver, who will get tired and make mistakes.

What is process in automation? ›

Process automation streamlines a system by removing human inputs, which decreases errors, increases speed of delivery, boosts quality, minimizes costs, and simplifies the business process. It incorporates software tools, people, and processes to create a completely automated workflow.

What is the simplest form of automation? ›

While the simplest forms of automation, i.e. rules-based RPA, require clear instructions, data quantities and quality are less important. But as organizations seek to introduce more sophisticated, cognitive technologies, the quantity and quality of data they use becomes a vital priority. Bad data leads to bad outcomes.

Which describes the benefits of automation? ›

Increased production rates & productivity, more effective resource utilization, improved product quality, increased safety, shorter worker workweeks, and shorter production lead times are all advantages of automation.

What is a benefit of developing an automation strategy? ›

An automation strategy can save your company time and money. By automating processes, you can eliminate the need for manual labor, which can free up resources to be used elsewhere. In addition, automating processes can help to improve efficiency and accuracy, while also reducing the potential for human error.

What is the impact of automation? ›

Advantages commonly attributed to automation include higher production rates and increased productivity, more efficient use of materials, better product quality, improved safety, shorter workweeks for labour, and reduced factory lead times.

What is types of automation? ›

Three types of automation in production can be distinguished: (1) fixed automation, (2) programmable automation, and (3) flexible automation.

How automation is changing the world? ›

As automation advances, technological innovations could displace some segment of the workforce, so it's possible there may be temporarily higher unemployment. Currently, technology is displacing workers whose jobs consist of routine, repeatable tasks, like bookkeeping, manufacturing, and food services.

How important is automation in our life? ›

Advantages commonly attributed to automation include higher production rates and increased productivity, more efficient use of materials, better product quality, improved safety, shorter workweeks for labour, and reduced factory lead times.

What is automation in daily life? ›

Reducing your number of daily decisions is a form of automation. Automation means streamlining processes, limiting distractions, and saving time and effort. It means clearing your mind of clutter and spending your day on what matters.

How is automation used today? ›

Automation is present in modern businesses of all sizes – including subtle features in common software applications, and more obvious implementations like self-driving vehicles or autonomous robots.

What are the elements of automation? ›

The main subsystems and components of a machine automation system are:
  • power distribution.
  • motor control and drives.
  • safety system.
  • programmable controllers.
  • discrete and analog I/O.
  • communication systems.
  • human-machine interface (HMI)

Why is process automation important? ›

Business process automation eliminates the bottlenecks that lead to lost time and revenue. The improvements in efficiency and control spread to every facet of the organization — from increased productivity and compliance to better customer experience and performance.

Videos

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(Network Automator)
4. Automation Showdown: Imperative vs Declarative by Kyle Ruddy & Luc Dekens | PDCConf 2021
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