The Fourth Industrial Revolution has kicked in and the verticalised industrial world, where each industry stuck to its core expertise and competed with peers in the same vertical, has suddenly changed. Organisations have started expanding beyond their boundaries by leveraging their expertise, to take up a totally different industry segment - for example, extending from retail to healthcare, transport to the food industry and so on.
Many of these expansions have been successful as they brought in new efficiencies and business models, revitalising the traditional landscape. This has triggered well-entrenched organisations to relook at their operations and find ways to be efficient to take on rapidly rising competition from unknown quarters. In fact, in the past few years, as industries across different verticals embarked on the efficiency journey, automation became a key component of every transformation exercise. In most cases, the business case for transformation is laid on the foundation of possible efficiencies achievable through workforce reduction. As this is easily quantifiable and measurable, many a time, automations are driven with this key goal in mind and to some extent and in the short term, it does reduce the cost of production or a service.
However, in order to take on the next-gen competition, traditional organisations must not only look at cost reduction, but more importantly, move the game where their traditional strengths and experiences can be best leveraged. They need to move the game from commoditisation and consequent pressure on cost to a market place where differentiation and customisation rule the roost. They need to be nimble and supple, so that they can rapidly and simultaneously bring out an ever-changing bouquet of products and services in line with their B2B and B2C customers’ needs and wants.
The current approach to automation, focused on work force reduction and efficiencies in production and operations, will lead to a situation where the deployed solution takes the route of automating the current perceived set of human activities. As automation becomes more sophisticated and intelligent it is being deployed to take over more human tasks than ever before. However, the goal of cost reduction will drive towards ignoring of hidden capabilities to accommodate variations possible with human presence, resulting in rigid automations. Another issue with automation goals linked to workforce reduction means that over a period of time, even if a built-in flexibility is not used, it will be forgotten or be considered too risky to leverage, as expertise around this variation is no more available. In the final analysis, the automation which brought in certain cost savings initially will become an albatross around the neck, by limiting their ability to continuously innovate in multiple ways.
On the other hand, an automation solution that is outward-looking and aimed at increasing business opportunities and better utilisation of resources can enable traditional businesses to leverage their experience and prevent commoditisation of their products and services. Automation solutions which allow production of highly customised solutions will not only enable business growth but also ensure customer affinity. However, organisations need to be able to define and measure key outcomes which impact the business, whenever they invest on automation. Here are some of the possible focus areas for automation and measurable outcomes which can be tracked.
Variations in Product & Services Offerings
Automation should allow industries to create customer-specific variation at costs similar in range to that of mass productions. The more such variations are offered, the more likely are the customers to stay with an organisation. Besides, variation will enable a large number of niche solution creators to efficiently leverage the offerings and this, in turn, can significantly grow client base as well as enable organisations to enter the business chain that has not been considered. Effectiveness of this type of automation can be measured by the number of variations offered at viable price points, new type of businesses which are consuming these customisable offerings, and retention rate of consumers enjoying the customised offerings.
Across industry verticals, markets are saturating and acquiring new customers is becoming more and more difficult. Organisations must ensure happiness of their customers. While automated customer interaction through chatbots etc. brings in efficiency, it does not necessarily enhance customer experience. Instead, automation aimed at customer interaction should focus on enabling human representatives of the organisation to be better equipped with the right information and capability to trigger actions to mitigate customer problems. It should reduce the time spent by customers to explain the issue and get it resolved. So when intelligent automated customer interactions is deployed the focus should be on making it easier for customer to interact. Success of this automation focus may be measured by increase in customer satisfaction and reduction in the customer churn of those customers who had interacted to resolve issues. Another measure would be to measure the reduction in time spent by customers in conveying issues/suggestions.
Utilisation of Critical Resources
Most, if not all, industries consume some critical resources which are available in limited quantity, either due to a cost factor or due to sheer limitations placed by nature. Service guarantees given to consumers often require deployment of resources ahead of time. Based on the actual requirements, such deployments may be actually consumed much later in time or may not be consumed at all. Human operators, due to physical constraints, cannot wait until the last moment to make an allocation decision. Predictive analytics may mitigate this issue; however, automation can make a big difference. Enhanced resource utilisation and increased capability with available resources are key success indicators in this case.
Carrying out repetitive tasks can not only result in mistakes but also adversely affect employee satisfaction. Focus on moving mundane activities to automated solution will also free up human resources to leverage their experience, knowledge and creativity to enhance products and services that an organisation can offer. The experience can be better utilised to support variations, and enable continuous innovation to match changing market demands. Key outcomes in this case would be around the percentage of time spent on non-repetitive tasks, increased employee job satisfaction, and the number of proactive innovative product/service ideas generated.
Time to Make Critical Decisions
Every organisation needs to make many tactical and strategic decisions. Not having access to the information on time or partial information can either delay the decision-making process or result in erroneous decisions. Automation can be used to take care of many tactical decisions and automation solutions can be used to provide on demand relevant information for making quick, informed decisions. Intelligent automation should enable decision makers to quickly fetch unbiased and complete analysed information quickly and without influence of human factors. Decrease in decision making time and consequent impact on business can be the indicators of automation success.
Integrated Cross-organisation Solutions
In order to redefine the commoditised markets, organisations can further augment their offerings by working closely with supplementary and complementary industry segments with automations across organisational boundaries. Upcoming 5G communication technologies could make this possible in the near future. Customised value-added solutions spanning organisational boundaries can significantly disrupt the current markets tending towards commoditisation. A good measurement criterion would be the number of such solutions in the short run and the incremental business earned through this in the long run due to the networking effect.
The world has gone through multiple cycles of automation. While they have certainly delivered benefits to mankind in the long run, in the short run there have been causalities. Industries can learn from the past experience of automation cycles to focus on right aspects. Individual organisations can prioritise their long-term objectives and utilise their transformation budgets on automation which will make the organisation grow and take on competition from unknown quarters, and where possible shift the game to their advantage.
Views are personal.
The author is practice head, innovation & industry relations, Wipro Limited