The State of Automation: Benefits & Strategies

What is the state of automation? What benefits does automation bring? How can you automate successfully?


Recent research by McKinsey, which has gathered responses from more than 600 participants representing the full range of industries and company sizes, shows a consistent increase in the percentage of businesses embracing automation. Although the increase is appreciable, more than 80% of respondents admit that their organizations have yet to scale their automation efforts across an entire business, meaning that only a few companies have fully tapped into automation. On the one hand, this represents a fantastic opportunity to accelerate automation and break away from the competition. On the other hand, the fact that only a few have achieved their automation goals signals the formidable challenges that companies face with their automation efforts.

In this article, we’ll take a deeper look at the status quo and future of automation in B2B companies and suggest a few strategies that can increase the chances of successful automation efforts.

The State of Automation

Automation is becoming more prevalent in all sectors of the economy: almost 70% of businesses, more so in financial services industries, report having automation initiatives in one or more business units.

According to the McKinsey study, 49% of companies have spurred the adoption of new automation technology across the board as a result of the COVID-19 pandemic. The increased need to rethink their business models and shifting buyer expectations toward digital channels served as the primary drivers for corporations to expedite their efforts.

Despite its overall contribution to the development of digital initiatives, the pandemic didn’t stimulate all companies in their automation efforts equally – in fact, 16% of respondents said that the pandemic delayed their organization’s goals as a result of shifts in business priorities and unstable demand.

Apart from the pandemic, there was another push to automate – new regulations. For instance, digital monitoring and data analysis help businesses meet track-and-trace requirements for products and achieve sustainable development objectives in areas like product design and energy-efficient manufacturing.

Automation statistics in b2b commerce

Benefits of Automation

The benefits of automation are numerous – from improvements to quality control to customer satisfaction and reduced operational costs. Although benefits may vary by industry, professional services industries are more likely to mention improvements in quality control, while in financial services, cost reduction is perceived as the primary advantage.

The most notable benefits of automation include:

  • Improved worker safety
  • Reduced lead times
  • Lower operating costs
  • Faster ROI
  • Increase in production output
  • Consistent and improved production quality
  • Better budgeting and forecasting
  • Optimal utilization of available resources
  • Increase in overall efficiency and productivity

Remote real-time cooperation in a wide range of industrial operations, both simple and complex, is now possible thanks to cutting-edge software technologies. For example, IoT devices on the shop floor remove the need for regular status updates and enable automation of process control. The collection and analysis of large volumes of data improve the efficiency of production equipment and reduce bottlenecks.

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Challenges of Automation

There are several challenges to automation, but the one that gets persistently mentioned in the McKinsey survey is not how to deploy automation but where to deploy it. The technical issues, surprisingly, are mentioned by only a small percentage of respondents. The budget doesn’t seem to be a widespread problem, either.

Other common automation challenges include:

  • Integration and compatibility of legacy systems
  • Maintaining information security and privacy
  • Lack of necessary skills
  • Lack of stakeholder buy-in
  • The right software tools
Automation challenges
How Automation Will Change Employment

Automation will have a lasting influence as new digital technologies enable the creation of new processes, products, and business models. As more transactional processes are automated, companies will need more specialized cognitive skills, critical thinking, statistical skills, and skills associated with social and emotional abilities, such as those required for leadership, entrepreneurship, and communication.

Overall, the expanding role of data, analytics, and AI is changing assumptions about what counts as routine work, which skills are critical, and what needs adjustment. Most tasks will eventually be automated, and the best work will combine technology with creative problem-solving.

Strategies for Successful Automation

Those who are successful make automation their strategic priority. The McKinsey survey confirms this by revealing that the leaders in automation cite emphasizing automation initiatives as the key factor in their success.

Integrated approach

Automation leaders are far more likely than other groups to use an integrated strategy, taking actions such as process simplification, automation of manual tasks, and use of advanced analytics. They are also twice as likely to employ the clean-sheet approach, which implies re-creating processing from the beginning to incorporate automation technologies.

CX & EX

Another important factor is prioritizing customer and employee experience. In other words, if a company makes increasing employee and customer satisfaction one of the key objectives in automation initiatives, it will be more likely to succeed.

If you want to know the difference between customer and employee experience and the importance of both, you may be interested in our article on this topic in Forbes.

Use of non-technical employees

Companies that continuously involve non-technical employees when training automation technologies to improve their accuracy are also better off than companies that rely solely on IT staff. Seeking help from non-technical staff and assisting them in learning while testing gives those employees tools that better suit their needs and objectives, increasing overall staff productivity.

Platform update

Platform updates seem to be another strategic priority. Even though many companies have cloud migration plans, automation leaders account for twice as many companies that mention coordinating cloud migration with their automation initiatives.

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Technology-facilitated federated governance model

A federated governance model is the most prevalent approach to automation initiatives. In this model, a central support team provides the necessary tools and skills to enable parts of the business to automate processes independently.

Additionally, automation leaders frequently adopt technologies that enable other business units to participate in automation initiatives. These can include process-mining, discovery, and documentation tools. Such technologies enable business functions and units to quickly discover the biggest automation opportunities within current processes.

Other technologies that can facilitate the more effective implementation of automation include low-code and no-code development platforms, which allow business units to proceed with their automation initiatives in a more independent fashion without continuously relying on expert IT resources. This approach, commonly referred to as a citizen developer model, allows companies to move faster on their automation journeys. Unsurprisingly, automation leaders are the ones who have fully embraced citizen developers, as opposed to organizations that are less successful in their automation initiatives.

Training and retraining labor

Training and retraining employees is also a significant success factor. Automation leaders frequently name employee training and capability building as the crucial element that had the biggest impact on automation in their firms. Most often used training methods include virtual or in-person workshops and coaching by sponsors, managers, and other automation experts.

Conclusion

Simply pursuing automation to reduce operational expenses is not enough. Companies that make automation their strategic priority, use an integrated approach to automation, and take good care of their user experience (including both CX and EX) have better chances of success in their automation initiatives.

If you’re looking for an ecommerce platform as part of your automation initiative, consider Virto Commerce, an ecommerce platform that’s also B2B and API-first, cloud-based, headless, and open source.

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Marina Conquest
Marina Conquest
linkedin icon Technical author and eCommerce advocate