The unprecedented global outbreak of the Coronavirus was immediately followed by an acute economic downturn. This new economic climate puts pressure on company leaders to accomplish more with fewer resources. Due to its capacity to streamline workforces, automation can play an essential role in business expansion. Automation guarantees significant cost, quality, and efficiency gains when executed correctly. In today’s inflationary climate, it is an extremely appealing way of reducing business costs.
As Businesses Face a Financial Crunch, What Is the Automation Outlook?
During challenging financial times, a few things remain constant. When resources are limited, errors are very expensive. Labor gets constrained, thinning out the workforce. It can be hard to develop a business when resources and personnel are in short supply. Automation can help businesses not only survive but thrive in tough times.
Even if inflation persists, according to Gartner, 78% of CFOs will boost or sustain enterprise digital spending in 2023.
The data indicates that investments in robotic process automation (RPA), reporting automation, and process mining will go up. These technologies are essential for streamlining routine processes, freeing up individuals to focus on higher-value tasks, and bolstering productivity.
In this context, SnapLogic and the Centre for Economics and Business Research (Cebr) have published a study on the economic influence of automation. The pandemic has accelerated the adoption of automation, with U.S. and UK businesses investing 8-13% of their total revenues in automation-led technologies. According to this research, spending on automation is directly connected to higher company revenues (up 5 to 7%), employment growth (up 4 to 7 %), and long-term efficiency (up 15%).
Importance of Automation During Periods of Financial Crunch
In a nutshell, automation stays stable and effective and is less expensive than employee compensation per unit of work completed, especially for bulk, process-based jobs. As sales or projects expand, automation can take over several repetitive or entry-level tasks that normally require a larger workforce. Instead of employing more workers, expand your investing in automation processes.
Given that new hires need fewer investments, additional budgetary capacity can be used to zero in on high-level recruits, like innovators, managers, and experts. Previously, business leaders were more concerned with overseeing labor that sustains the business but doesn’t always foster innovation. Instead, you are now free to focus on delivering value to the team.
Another benefit of automation is that employee retention will get better – as you will be using senior or specialist staff members who bring their unique skill sets and find more purpose and meaning in their daily tasks. Since they are more content and happier with what they do, you’ll retain your employees for longer. No one will feel inconsequential because of menial or oversimplified jobs that aren’t playing to their strengths.
Lastly, minimizing risk over a recession or financial crisis is of the utmost importance. Systems can be accelerated, human error can be decreased, and processes can function without deviation because robots do not tire or suffer from ill health and execute rule-based duties with more precision. Therefore, risk is reduced across different parameters.
Layoffs as a Cost-Cutting Measure?
The Wall Street Journal conducted interviews with economists and discovered that, over three years, organizations that actioned extensive recession-led reductions underperformed when compared to market benchmarks. This underperformance is largely attributable to the fact that those who remain frequently must take on more work. This usually leaves them feeling exhausted, underappreciated, and uninspired.
Automation enables workers to accomplish more with fewer assets and to devote less of their workday to repetitive duties. Since they value their positions more and are learning new skills, they are more likely to stay with the company and advance.
Investing in Automation amid a cash crisis can result in significant cost reductions, enhanced digital skills, and an entirely new perspective on your business. Economic recessions have historically served as an incubator for innovation. Morgan Stanley reports that approximately 50% of Fortune 500 companies were founded during recessions or economic downturns.
Reasons to Invest in Automation Right Now
There are four key reasons why business leaders remain bullish on innovation even in tough times. It helps you:
1. Stay nimble in a fast-changing market
If businesses have learned anything over the past three years, it is that absolutely no amount of planning will sufficiently prepare them for the unforeseeable. The challenges encountered by enterprises since 2020 have highlighted the importance of adaptability and flexibility. Automation is not merely a trend on the horizon; it is right here and right now. By embracing this technology straight away, your organization will stay ahead of the curve and be a formidable competitor.
2. Achieve long-term efficiency and resilience
Introducing new technology demands an initial investment, which can be intimidating for some organizations. However, investing in automation preserves your monetary resources in the long term.
By substituting or reallocating staff members, you can manage your business more efficiently without incurring the exorbitant costs associated with increasing headcount. Particularly, accounting and finance can have an immediate impact on capital flow.
3. Succeed amid a labor shortage
Numerous factors, such as a limited labor market, “the great resignation,” and shifting worker needs and behaviors, have made it difficult for organizations to fill positions, specifically those requiring the completion of unsatisfying repetitive tasks.
In a bid to tackle this domestic labor deficit and find less expensive options for permanent workers, many businesses have attempted to outsource work.
Unfortunately, despite being cost-effective, outsourcing work can be fraught with challenges, like inconsistency and communication failures. Automation completely removes the need to recruit more people or outsource labor. With “digital workers,” your company can finish tasks 24 hours a day, 7 days a week, 365 days a year.
4. Eliminate the risk of errors
Unfortunately, a major risk associated with manual labor is the occasional possibility of making errors. When handling data, these minor errors can rapidly become expensive and time-consuming to rectify. Data can fall through the gaps through no negligence of the employees, and even if it’s over 99% accurate, these small errors can lead to remedial tasks that disrupt your company’s progress.
A key reason for Investing in Automation is that a bot can never make a mistake. This ensures that your business stays efficient and compliant during periods of economic turmoil and can swiftly capitalize on new opportunities without wasting resources on error correction.
The Rise of New Technologies for Staying Lean
The emergence of modern automation technologies makes it easier for companies to reach these targets. Not all have massive barriers to entry, and some fit seamlessly into most organizations’ digital transformation strategies.
No-code automation platforms relieve the burden of retraining workers to use cutting-edge automation technologies. Following this, robotic process automation (RPA) might be employed to automate time-consuming, tedious, error-prone, and repetitive tasks. Combining this cutting-edge technology with artificial intelligence (AI) facilitates automation scalability and better decision-making.
By automating these processes, people have the time – and the resources – to think creatively, improve customer experience, and increase revenue.
Implementing even a basic automation solution, like intelligent document processing, is a major step toward digitalization. It has the power to conserve hundreds of thousands of hours, like time spent rectifying errors, and generate enormous value.
Annually, U.S. businesses spend a staggering $5,3 billion on salaries for manually operated document processing. Outsourcing operations can redirect organizational assets toward other key business goals, like consumer and employee experiences.
Planning for Responsible Automation
In today’s inflationary climate, investing in automation makes sound business sense to reduce operating expenses. However, CEOs must be aware that these benefits may come with a social price, leading to unemployment and inequality. As you prioritize sustainability while maneuvering through a cash crisis, you must view automation through the prism of accountability and social consciousness.
Gartner recommends that organizations separate their journey into three phases – first, automation to battle economic downturns (which is where you are likely to be right now); second, automation to improve experiences (which is the next immediate step), and finally, automation to grow revenues, generate jobs, and support inclusion. That is the true power of automation during and after crisis periods.